How divine would the music be if every member of the orchestra played their instrument with headphones on, staring solely at their own sheet music? This is precisely how many companies try to increase their revenue.

RevOps is a term that has been popping up increasingly often in job postings lately. We interviewed Mikko Honkanen – a RevOps veteran – about the topic. We wanted to understand what’s behind the popularity of RevOps and how it relates to revenue growth.

As a teaser, let us reveal that the purpose of RevOps is metaphorically to make the revenue machinery of organizations operate like an orchestra. Now, onto the matter at hand.

Could you introduce yourself?

I’m Mikko Honkanen, one of the founders of Vainu, a company specializing in business data. Currently, I’m in charge of product development here.

I’ve also been hosting a podcast related to RevOps.

What does RevOps (Revenue Operations) actually mean?

At its core, it’s about orchestrating and optimizing all revenue-generating activities to ensure they function as cohesively as possible.

The functions included in RevOps are sales, customer success management, marketing, and financial management. For software companies, we can also add the product side to the mix.

What is the purpose of RevOps?

One of the main goals is to bring functions that were previously largely in their own silos together to ensure that everyone in the organization is moving in the same direction.

Additionally, RevOps aims for more open information flow and tighter collaboration between different departments. Often, it’s also targeted at enhancing a company’s ability to respond to rapid changes in the market.

With a common direction and a unified playbook, we achieve faster growth – and often more profitably too.

Looking at it from a practical standpoint, in RevOps the focus is on pondering:

Who should be responsible for running RevOps?

There probably isn’t one correct answer to this, but when I interviewed dozens of RevOps professionals for my podcast, surprisingly many of them mentioned reporting to the financial leadership – like the CFO, for example.

I personally like this modern approach because usually when a CFO sends out a report, it catches the interest of the top brass, right up to the CEO.

When the RevOps team reports to the financial management, matters related to revenue development end up in the reports that eventually find their way to the desks of the executive team, the board, and the owners.

Alongside financial management, another logical place for RevOps is within the domain of the commercial director. If such a role does not exist in the company, RevOps can also fall under the leadership of sales.

Practices vary greatly.

Who should learn more about the topic?

Personally, I’ve worked in the B2B sector and RevOps is definitely a perfect fit there. Especially in the software industry, we’re quite advanced in utilizing data, and there’s plenty of quality data available.

In this case, implementing RevOps is a breeze.

Here’s one concrete example. Many companies in the software industry strive for a Product-led Growth approach, where one of the goals is to gather as many free users as possible and convert them into paying customers. Such a company would significantly benefit from implementing RevOps.

RevOps is generally suitable for industries that have long utilized data or have a high transaction volume.

Such industries include banking, insurance, logistics, and telecommunications. These fields have a lot of room for optimization and opportunities to leverage machine learning.

If you’re in the business of selling cruise ships, then RevOps might not be the right approach for you. After all, success hinges on whether you sell one ship or two.

What changes after adopting a RevOps approach? How does it for example affect people’s roles?

The most significant impact is that people from different functions start working together and become part of the same team. You’re no longer just focusing on optimizing sales or solely thinking about new customer acquisition; instead, you’re considering the bigger picture.

RevOps forces you to think about costs in a whole new way. You have to consider the most efficient methods for sales or marketing, for instance, or what the most cost-effective way to acquire new customers is. You also need to evaluate which customers are profitable for your business and which are not.

Other changes may occur too. Frequently, the CFO moves closer to the core business and becomes an even more crucial player, tasked with bringing insights to the management on business development.

RevOps often means that the use of a CRM system becomes more systematic, instituting stricter rules for its application. RevOps demands discipline and shared regulations, such as for logging data across team and functional boundaries. As a result, some might feel that a certain freedom in their operations is lost.

The extent of the changes largely depends on the company’s initial state. If there hasn’t been an Operations culture in the company, then we’re talking about a major cultural shift. However, if the company already has Sales Operations or Marketing Operations teams in place, moving to RevOps might even feel like a relief for many. It brings clarity to their workflow.

I’ve also noticed distinct changes in how people in Operations are valued. Back in the day, those who ended up in the Sales Operations team were usually the ones who used the CRM system diligently and operated systematically but weren’t necessarily the top sellers. Now, the role of Operations has evolved, and members of the Ops team have become genuinely key players in companies.

Many companies recruit a lot of people for these roles from outside the company. These positions often attract former management consultants, which makes perfect sense. After all, in the consulting business, one is accustomed to examining a client’s business operations as a whole.

How does RevOps relate to Growth Hacking?

This is a jargon jungle. However, I perceive that growth hacking often relates to attracting new customers during the marketing phase. In growth hacking, the focus is on finding ways to attract as many new customers as possible, and it has traditionally been a strong part of the marketing domain.

RevOps brings together these growth hackers, Sales Operations, and finance wizards to brainstorm revenue growth.

How do you (at Vainu) run RevOps?

First off, our RevOps is led by an extremely experienced individual who has been with the company for quite some time and previously headed the Customer Success team. So it’s not someone who’s just good at crunching numbers in Excel or inputting data into CRM systems who’s running the team.

At our company, the RevOps leader is a major decision-maker who sits on the executive team. The role is incredibly diverse, but one significant area on their desk is how we leverage the CRM system.

The RevOps leader is a key decision-maker whenever we consider what tools and systems we use and how we use them. There’s no way to implement new software without going through him.

Whenever we’re planning campaigns, we always have a representative from our RevOps team on board. The RevOps team is also constantly in touch with customers, the product team, and marketing, and they collaborate closely with the CFO.

What is required to implement RevOps?

The first requirement is to agree on a few common metrics to assess success through. For example, do we want more profitable growth, or are we aiming to capture a larger market share in a particular customer segment?

Since there’s a ton of work with data and processes in RevOps, it’s absolutely essential to have robust data systems and a culture that’s driven by data. Does your company, for instance, have a CRM system? Is it being used effectively? Do the different systems communicate with each other?

Additionally, operations must be systematic. Are the processes clearly defined? Are they documented in the systems? Have the customer life cycles been outlined? I would start by fixing these issues immediately if they haven’t been addressed already.

A functional shared CRM system is an excellent starting point for RevOps. Once those basic requirements are in place, the next step I would take is to build a RevOps playbook.

Why does this topic attract to much attention right now?

Discussions in my own bubble can often be traced back to American companies. Over there, RevOps has been a hot topic for a while. Here in Europe, RevOps titles are still quite rare, but the subject has definitely sparked interest.

In recent years, many companies have been chasing growth at any cost, but now, in tougher times, the focus has shifted to profitable growth. From the perspective of this change, RevOps offers an attractive approach.

I’ve also noticed that the influence of RevOps professionals in companies has grown. These positions are more visible than before. As RevOps people generally receive more attention, it also sparks interest in the subject among many companies.

What are the most typical stumbling blocks when implementing RevOps?

I would anticipate that people naturally tend to think about things based on their own backgrounds and roles. Salespeople think about how to sell. Marketers consider things through their own metrics. In RevOps, one must be able to view things more broadly.

Another common stumbling block is not giving the RevOps individual or team enough decision-making power. Without it, making any changes is impossible.

One potential stumbling block I’d point out is that RevOps introduces perspectives that might not have been commonly heard on the commercial side before. For instance, the views of financial and product management might startle those who have been working in sales and marketing.

As I mentioned before, the role of a CRM system in RevOps is extremely crucial. If a company has failed in CRM initiatives or if the system’s usage rate is low, similar problems will be encountered when transitioning to RevOps.

I must emphasize the importance of change management. It can involve a major shift in people’s thinking, so it’s crucial to allocate enough resources for change management. It’s also important to remember that such changes rarely yield significant results immediately. Change needs time to take effect.

Do you want to build a seamlessly operating revenue machine? Are you interested in breaking down the barriers between sales, marketing, financial management, customer service, and product teams? Get in touch quickly!

Following the business acquisitions last year, we found ourselves in a pressing need to transition to a new Salesforce environment. Salesforce has been an incredibly critical system for us throughout our existence, around which we manage everything except invoicing. As you might have guessed, we were faced with a massive migration task that would involve extensive refactoring, architectural renewal, and development of new functionalities.

Despite our preparations, we still couldn’t have anticipated the massive and complex operation we were about to undertake. As the project manager, even I didn’t foresee how deep into the thick soup I would have to dip my ladle.

The migration wasn’t just a technical overhaul, although as a technical exercise it was massive. It was about having to act in both the supplier and client roles within the project. This change affected every single one of our employees, from sales to HR, meaning the migration had to consider everyone’s wishes and requirements.

Sales and marketing were wielding Salesforce like pros. The entire sales pipeline – from handling new leads to managing sales opportunities and executing projects – was meticulously modeled in the system. It also managed everything from customer relationship management, revenue forecasting, project management, time tracking, to human resources. In addition, the system integrated with the billing system and a few lighter marketing tools. The setup was nothing less than a powerhouse, humming with activity and slick efficiency.

When I said initially that we use Salesforce for everything except invoicing, I wasn’t exaggerating at all.

In the midst of chaos

The starting situation of the project was, frankly, chaotic. We were dealing with an environment that had been “hacked” from left and right over the past fifteen years. Consequently, this environment lacked unified documentation or clear ownership.

Our organization contained both technical and business knowledge, but, unfortunately, this information was scattered all over the place. Many experts who had developed our Salesforce environment over the years had already left the company by the time we started the project. So, there was a lot of work to do!

Building the team

As the project kicked off, everyone understood that the key to success lay in a dynamic and multi-skilled team, whose members would complement each other like pieces of a puzzle. It was clear that we couldn’t pin our hopes on just one person.

The team selection encompassed a comprehensive array of experts: it included business representatives from sales, delivery, and HR, along with technical specialists.

The technical team consisted of a project manager, an architect, developers, and a marketing consultant. Each team member brought their own perspective and essential expertise, which was crucial for the success of the project. From each function, the mentioned responsible persons were selected, and additionally, three to four key individuals were included to bring in more expertise and fresh perspectives.

As the project manager, I was responsible for ensuring that the new environment was ready for critical functions without any interruption in service. The solution architect also served as a hands-on configurator and was key to the technical solutions. One developer handled the migration of metadata and code refactoring, while another managed the data migration. Naturally, the marketing consultant took care of configuring MCAE and overseeing the lead pipeline.

To support the project, a handful of additional consultants were also called upon, bringing with them fresh perspectives and specialist expertise, which enriched the team’s comprehensive understanding and strategic vision.

Two-way approach: top down ja bottom up

At first, the project seemed like an impossible task because there was so much to do. Once we got over the initial shock, we started to outline the process together. We approached the project from two angles: top down and bottom up. In the top down approach, we focused on business-critical processes and functionalities. In the bottom up approach, on the other hand, we broke down the technology into pieces and went through the raw metadata.

The idea for our first Top-down workshop came from a well-known dating app, where a swipe to the right or left lets you select your preferred partners. We compiled almost all of the existing functionalities, underlying automations, objects, applications, and buttons into cards. We ended up with a massive pile of these cards.

Tagging all those functionalities was a massive groundwork indeed. After that, we asked the function reps to sweep the tags into different boxes labeled Yes, No, and Redo. “Yes” meant that the functionality was absolutely necessary and worked well as is. “No” indicated that the functionality wasn’t needed moving forward. “Redo” meant that the functionality was needed, but it required further development to be better.

The first round was a huge relief, as we were able to trim down a lot from our to-do list.

Next up was prioritization. After the first swipe round, the notes in the Yes and Redo boxes were prioritized. These notes were categorized under the headings One day, Nice to have, and Def must have at go-live based on their urgency. The result was exactly what we wanted: a prioritized backlog was created for us.

One object at a time

One key to the success of the project was the Skyvia tool, a data mapping and migration tool. With Skyvia, data mapping becomes a breeze, and unlike when using tools like Dataloader, every migration leaves a trace. Opting for this tool was undoubtedly the right choice for us.

Migration was practiced one object at a time by creating a new sandbox environment where data was migrated one object at a time. This way, a ready-to-automate chain of migratable data could be constructed.

The project’s biggest challenge turned out to be the architectural changes. We left all the “managed package” implementations in the dust, embracing fully customized solutions for every desired feature. Additionally, we tweaked some processes between sales and project delivery. The most labor-intensive new features revolved around simplifying time logging and enhancing the tool for planning personnel resources.

Only one shot

Right from the start of the project, it became clear that using the old and new systems simultaneously was not an option. There was only one chance to succeed. Therefore, the pressure to succeed was immense.

The migration itself ultimately took twelve hours. At that time, the old environment was locked from the users.

Data migration day was Friday, so there was a chance to tweak and check the data over the weekend. Everything went smoothly in the end. Come Monday morning, all ninety or so users logged into the new environment. Adjustments and the development of non-critical features continued over the following weeks, and by the last day of the month, invoices were sent out to customers as usual. The migration was a success!

An educational journey

The migration project provided several key lessons. First off, the top-down approach was highly effective. It was also beneficial to list all features, as it clarified the progression. Critically, involving representatives from various functions was essential. These representatives formed a diamond-tier team, playing a pivotal role in the success of the migration.

The project was certainly no cakewalk; it was quite stressful at times. During the migration, we had to be prepared to make tough decisions and manage the scope, especially since the timeline was already locked in.

Additionally, in the migration, the quality of data must be nearly perfect, so its verification cannot be overstated. Team communication was paramount, as everything was connected to everything else, and even a minor change in one functionality impacted the work of others.

In our communication, it was good to remind the team that we are truly starting with a clean slate now. It was time to boldly jump towards the new and not dwell on how things were usually done before.

The migration project was not just a technical overhaul; it was a journey that taught us a great deal about ourselves, our team, and how we work. It proved that even the greatest challenges can be overcome with a unified team and a robust plan.

For us, it was also an eye-opening experience about how things look from our clients’ perspective, and about everything our clients have to go through and endure during significant transformation projects.

Although we work extremely closely with our clients and support them throughout their transformation projects, we obviously can’t see everything. Nor do we always know the kind of pressure our clients’ key personnel are under. Now, with one more experience under our belt, we feel we understand our clients even better.

If you have a migration project or any other significant change initiative underway or in the planning stages, feel free to reach out!

To the question “What is Salesforce?”, there’s a short and simple answer. Salesforce is a Customer Relationship Management (CRM) system that consolidates all essential customer information in one place, thereby enabling comprehensive management of customer relationships.

That’s exactly what I often say when I’m asked about it. Just to be sure, I might throw in a few practical examples too. Salesforce compiles information about things like key customer contacts, communication across different channels, and of course, completed deals.

The data residing in the system enables real-time tracking of sales targets and, for instance, forecasting the results of the upcoming months.

These examples usually help the inquirer form a sufficiently clear picture of Salesforce. This is based on the assumption that the inquirer is not particularly versed in information systems and does not feel the need to understand what happens under the hood of the system.

Not just one product

In the introduction, the posed question can be answered much more profoundly. In this text, I aim to provide as exhaustive an answer as possible. The kind of answer I would give to an engineer interested in technology. To someone who wants to understand how the Salesforce system truly operates.

A person interested in technology might not necessarily be eager to hear about sales pipelines or a 360-degree customer view. Instead, they’re likely more fascinated by data models, databases, interfaces, communication paradigms, programming languages, and software frameworks. Essentially, an engineer wants to know what Salesforce is – not what is done with it. And that, after all, was the original question.

First off, it’s important to point out that Salesforce isn’t just a single product, but in actuality, an extensive collection of various products and services that the company has amassed and developed over the years.

Depending on the case, these have been integrated into the CRM solution offered as Salesforce’s core business, or in Salesforce’s own terms, the Sales Cloud.

In this context, it’s a must to mention that from a client’s perspective, Salesforce’s comprehensive offerings are really fantastic because you get solutions for all your needs from the same counter, and all the data is also in the same environment.

Basics of cloud services

Now, onto the main point. Salesforce is a cloud service, which naturally often sparks discussions about the definition of the cloud itself.

One of the foundational pillars of the original cloud, known as IaaS, is the scalability and elasticity of resources. Salesforce environments have traditionally been run on a multi-tenant basis, meaning that individual servers are used by multiple clients. This means that the server’s resources are shared across several Salesforce environments. The ability to influence the resources allocated to an individual environment, such as the number of API calls, memory, or CPU cores, has been very difficult or impossible.

There is, however, a reason for this, and I will return to these constraints a bit later.

Customer environments, that is, the system environments of organizations using Salesforce, were for a long time operated in Salesforce’s own data centers. Recently, they’ve been massively shifted to Hyperforce, which essentially means outsourcing the IaaS layer to AWS, and potentially later to other public cloud service providers as well.

For users, the biggest advantage is the opportunity to bring the company’s data physically closer, thereby complying with local data storage regulations. Technically, this also enhances the ability to offer scalability and elasticity to customers in the future, as previously mentioned.

One downside that has been noted is the inability to guarantee Salesforce’s IP space anymore. Previously, third-party systems could filter incoming traffic using a list of allowed IP addresses and/or ranges (IP whitelisting). After switching to Hyperforce, one must settle for filtering traffic by domain name (Domain whitelisting).

In any case, by outsourcing the IaaS layer, Salesforce can better focus on being the world’s largest enterprise software provider, while leaving the responsibility of managing the security of physical data centers, energy supply, and other maintenance issues to others.

A pioneer in SaaS services

Salesforce is a trailblazer among SaaS services, often referred to as the world’s first platform built from the ground up as a SaaS. Its success can be attributed to this fact, as since 1999, Salesforce has had a significant head start and ample time to develop its offering into something effective and reliable.

What’s particularly delightful about leadership with Salesforce lies in its adaptability and the vast range and quality of tools available. The necessity for this is crystal clear, as a SaaS service focused on managing customer relationships and other business operations simply can’t meet the diverse, distinct needs of every organization straight off-the-shelf. Therefore, it’s only natural that Salesforce also serves as a PaaS platform.

In addition to Salesforce being available as a SaaS model that you can start using with just a few clicks, the Salesforce Platform (formerly Force.com) also offers the possibility for highly flexible and impactful customizations. You can modify the system in two ways: with clicks or with code. By ‘clicks’, I refer to no-code and low-code development, while ‘code’ pertains to traditional text-based programming.

Often, a bit of both is required. At twoday Biit, we have, by the way, divided the titles roughly according to this division. A Salesforce Consultant primarily configures the system using a no-code/low-code approach, while a Salesforce Developer handles the necessary coding. However, our team is quite ambitious in practice, so many consultants also produce code, and developers effortlessly click the needed fields or layouts into place. That’s what you get when you try to pigeonhole people.

A maintenance interface on top of the database

Let’s now move on to examining an individual Salesforce environment. From a technical standpoint, and greatly simplified, there exists a web server and, behind it, a relational database. Salesforce has constructed a maintenance interface on top of this database, making it extremely easy to create new database tables, or in Salesforce’s terminology, objects.

Likewise, customizing the user interface view used for inspecting records, such as rearranging fields to desired locations, is extremely straightforward.

Using Salesforce – put simply – largely revolves around the lifecycle of records. A record is created, it might be modified, and eventually, it might be deleted. All of these can occur through user actions, automatically, or based on input from an external system. Moreover, each of these can trigger their own automations. So there you have it, the basic principles of Salesforce explained for an engineer. Pretty straightforward!

For example, the Web-to-Lead functionality automatically sends a new lead into Salesforce when a potential customer fills out a form on the company’s website. The creation of a Lead record can trigger a configured low-code (Flow) or coded (Apex) trigger, which, according to the designed logic, enriches its data using an external business database service or creates a ticket in the customer service queue if needed. Frequently, the lifecycle of a Lead record ends with its conversion into a contact or customer account.

A flexible and user-friendly database enables the rapid expansion of Salesforce for almost any application. For instance, if a business focuses on selling or renting properties and real estate, Salesforce can easily incorporate new tables named Property, Real Estate, and Apartment, along with the necessary fields and references to other tables. Adding such functionalities to traditional, long-constructed software tends to be extremely labor-intensive and time-consuming.

Different cloud services for different purposes

Over the years, Salesforce has significantly expanded its offerings and named solutions suitable for different purposes as their own cloud services, even though sometimes it’s just about switching on functionalities that exist on the same platform.

The original CRM is called Sales Cloud, and it includes basic objects such as Lead, Opportunity, Account, Contact, Contract, Product, Pricebook, and so forth.

Service Cloud is specifically designed to boost customer service, Marketing Cloud caters to the needs of marketing, and Commerce Cloud is for building e-commerce platforms. Experience Cloud (formerly Community Cloud) enables the creation of customer and partner portals.

From a database perspective, the former Salesforce IoT Cloud and the current Data Cloud are also services of great interest, dealing with genuinely massive amounts of data in real-time. For instance, IoT sensors can feed their readings at such a pace that the standard Salesforce relational database simply isn’t cut out for such heavy-duty use.

The IoT Cloud had indeed built its own platform called Thunder, utilizing building blocks familiar from big data circles—Apache’s open-source components. In Thunder, Storm handled the data streams, Kafka acted as the messenger, Spark as the analytics engine, and Cassandra served as an ultra-fast NoSQL database. However, the IoT Cloud was discontinued in 2021. Similarly, in the Data Cloud (formerly known as Salesforce CDP and Salesforce Genie), there is a proprietary data lakehouse-style repository that combines the best aspects of data lake and data warehouse technologies.

A package that stays together easily

How does Salesforce manage to keep things so tightly knit? Many who have used IT systems for a longer time have surely experienced those moments when a spreadsheet, drawing program, or some other application first freezes itself and then eventually the entire computer.

Despite occasional minor delays, Salesforce has nevertheless succeeded in creating an environment that can be customized and programmed without ending up constructing a perpetually stumbling bloatware, which can be considered an excellent achievement.

Salesforce keeps individual customer environments in check through platform limitations. These restrictions ensure that no customer environment can consume excessive resources, such as computation time, memory, or network traffic.

If a programmed execution consumes too much memory or takes too long, the platform simply terminates the execution. In such a scenario, when one looks under the hood, the programmer can see what kind of exception occurred and modify the code accordingly to ensure that the execution happens within the platform’s limitations.

Platform limitations are crucial, especially in a multi-tenant environment, to ensure that different customer environments remain performant independently of each other. However, I consider an equally significant benefit to be that they prevent one from modifying the environment to the point of unusability.

From a programmer’s perspective, limitations manifest as Salesforce’s specific requirements when planning a new implementation. A simple solution often has to be crafted in a more complicated manner due to these limitations. A significant part of a Salesforce programmer’s job focuses on circumventing these platform constraints, and an experienced programmer will account for these limitations right from the planning stage. Considering the benefits achieved, this is, however, a good compromise.

In addition to the aforementioned aspects, Salesforce is of course much more. Many points were left unmentioned in this writing, and several technically intriguing services and technologies were not mentioned at all. Each Salesforce product could be discussed in multiple paragraphs. At the very least, Einstein, Tableau, and Heroku deserved a mention. Similarly, an entire article could be dedicated to Salesforce’s programming languages. Perhaps next time.

I hope I have managed to enhance your understanding of Salesforce from a more technical perspective. With Salesforce, like many other companies, when you seek information about new services, you often encounter a scenario where the product presentation is made up of cheerful images, marketing materials, sales pitches, and buzzwords.

I’ve found myself longing for more fact-based content that delves into the technical aspects of the service and the components used in the background. From the get-go, twoday Biit’s mission has been to fuse business acumen with technical expertise. We speak both languages with our clients, business or IT.

Does your organization have a CRM system that feels more like a hindrance than a help? Has it turned into an expensive tool that nobody uses? Don’t worry, you’re not alone. Many companies face the same issue: their CRM system fails to meet the expectations set for it.

Often, companies find themselves saddled with expensive system configurations that, eventually, are barely used. The reasons for this can range widely. Perhaps the user experience is poor, the usage is too limited, or the practical benefits in everyday work are negligible. However, there is a solution to this problem. It involves paying attention to the system users and setting up the system from the perspective of the customer journey.

In system development, there’s often too much time spent on technical features of the system and the internal processes of the organization. The most important factor, the human, is forgotten.

Don’t let your CRM system gather dust and become an unused resource.

How much better service can we offer to customers when we can view them from one system with a 360-degree perspective?

Here are five tips to help you transform your CRM system from a dreaded chore to an indispensable assistant:

1. Approach the customer journey as a whole

Don’t just think of a CRM system merely as a tool for winning new customers or closing deals. Understand every stage of the customer journey and ensure that the system also supports the development of existing customer relationships.

The touchpoints along the customer journey must be centralized in one place, which is achievable by digitizing the customer journey into a CRM system.

2. Improve the user experience

One of the most common reasons why CRM systems sometimes see little use is a poor user experience. The usability of these systems is often lacking, and all too frequently, end users feel that the systems do not help them do their jobs better.

By focusing on user-friendliness and ease of use, you can harness the system to support your work. Train your staff and provide them with ongoing support. Also, listen to user feedback and make the necessary changes to improve the user experience. Ask your sales team which aspects of the system are most crucial and focus on developing those areas.

3. Integrate the system into everyday work

The CRM system shouldn’t be some standalone tool that’s only touched now and then. It needs to be woven into the daily grind, part of how people work and process things. Provide users with clear instructions and tips on how to leverage the system effectively in various scenarios.

The single most important change is the emphasis on CRM as a tool for sales and forecasting. Naturally, changing the operating model, eliminating unnecessary stuff, and implementing better reporting practices also help move things forward.

This is how the system can be leveraged to generate data that boosts sales and makes customer engagement more systematic. If necessary, rely on the support of an external partner to help implement these changes effectively.

4. Provide valuable information and analytics

The data extracted from a CRM system is as valuable as gold when utilized correctly. The system is useless if it doesn’t contain enough relevant and up-to-date information. Organizations need an easy and quick way to maintain information in the CRM system.

So, make sure that the system provides its users with relevant information that helps them make better decisions and optimize their sales processes.

Just gather the essential information and leave out the extra “nice-to-know” clutter. This way, you won’t need to waste precious time updating information. Create clear reports and use analytics to maximize the system’s strengths.

5. Inspire and engage the whole team in using the system

For effective customer engagement, it’s crucial to foster a culture where using the system is seen as beneficial and even essential to daily routines.

Inspire and engage your team in using the system by offering them practical benefits and demonstrating how it can concretely ease their work and yield better results. Leaders must also set an example. They need to actively use the CRM system in their own work and practically show its benefits.

CRM system is a tool of many possibilities

Don’t let your CRM system gather dust and become an underutilized resource. Turn your focus to the customer journey and all its touchpoints, as well as to the system’s users.

By enhancing the user experience, integrating the system into daily operations, providing valuable data, and inspiring the team to use the system, you can achieve significant measurable results through its implementation.

Ultimately, a CRM system is a tool of possibilities that can tune your entire organization for better performance. It’s no longer just a drudgery; it’s an essential part of your success story.

Want to know more? Get in touch with us, and together we can explore how you can harness technology as a powerhouse for results.

These days, every company wants to serve their customers as seamlessly as possible, but who really owns the development of customer experience within a company? What does enhancing customer experience entail? We interviewed two leading strategists from the marketing agency Dagmar, who together have a whopping forty years of experience in developing the customer experience side of things.

Could you introduce yourselves?

Anni Haavisto: I’m Anni Haavisto, the lead strategist for Dagmar’s Data-Driven Management unit and the Insight team. I bring nearly two decades of experience from the agency world, specializing in customer experience, research, and consulting. I have extensively worked in both consumer and B2B segments. Over the years, I’ve actually become familiar with pretty much all the major industries.

Johanna Toivonen: I’m Johanna Toivonen, and I work alongside Anni at Dagmar. I serve as the lead strategist, where nurturing customer needs and fostering a client-centric culture are at the heart of my expertise. I bring over 20 years of experience in leading consultative projects in customer understanding and customer experience, working with both B2B and B2C clients across various industries.

Today, we are primarily talking about customer experience, but also about growth and marketing. How do these things fit together?

Johanna: There’s a lot in the air right now—big shifts like inflation, war, changes in the operating environment, technology advancements, a transformation in the workforce, and shifts in customer behavior. Competition is set to intensify, both locally and globally. To support growth, it’s crucial to understand these changes as well as customer behaviors and needs.

Marketing plays a crucial role here, as it should be able to initiate, build, and maintain conversations and interactions with customers. This works better if we understand the customer and their needs. Moreover, there is definitely increasing pressure to validate the effectiveness and business impact of both marketing and customer experience.

Anni: A good customer experience is an enabler of growth, and conversely, a poor customer experience can be a barrier to growth. It’s essential to understand what customers want and need so that even in a tight economic situation, the necessity of investments can be justified to them.

There is a lot of talk about customer experience, but what does it actually mean?

Anni: Customer experience is formed at all possible touchpoints where people interact with a company or brand. It starts even before the actual customer relationship begins.

Johanna: Hallmarks of a good customer experience have also been identified as ease, fluidity, and the importance of fulfilling promises. Emotions play a significant role too.

It is often mentioned that customer expectations have grown significantly. What kind of implications does it have?

Johanna: The B2B customer experience has “consumerized,” meaning B2B customers now expect digital services to provide similar, well-functioning, and clear features that we’ve become accustomed to on the consumer side. Comparisons can also be found in completely different industries than our own.

Anni: Customers expect a thoroughly pleasant, easy, and straightforward experience, both face-to-face and online. They’re becoming accustomed to things being done from a human perspective, rather than a business perspective. Examples of this include the growing importance of personalization and the overall expectation that marketing communications understand an individual’s situation and needs.

It seems that few organizations have a clear understanding of who should take responsibility for developing the customer experience. Why is it so difficult to define responsibility – and who do you think it belongs to?

Johanna: Developing customer experience is a long-haul effort, and it can’t simply be dumped on the shoulders of just one department or person, like, say, a Chief Experience Officer. The example must start from the top brass, but the responsibility still extends to the entire organization.

Anni: The siloed nature of organizations is a major challenge here. Company’s brand should define the customer experience for the entire company, but within silos, things are understood differently.

How should you get started with developing customer experience?

Anni: Let’s start by looking at this from an internal perspective of the company. It’s crucial first to understand how customer experience is currently being built and defined within the organization. What kind of tools are being used? What role does the ERP system play? How are things implemented on the ground? Secondly, it’s obviously essential for the company to have a target state or definition for the customer experience. This helps in outlining what kind of customer experience we aim to achieve. Help could come in the form of a customer promise or perhaps a brand book.

Johanna: I’m backing up Anni here, but it’s not enough to just understand the internal perspective of the company; we must grasp the customer’s point of view. Customer insights accumulate at the customer interface within organizations, like during meetings with clients and conversations with them. This is valuable information. Sometimes, it can also happen that certain isms and beliefs about customers, which may no longer be true, persist within a company, and these views ought to be updated, perhaps with the help of customer research.

Anni: That’s exactly it! The customer perspective is naturally key here.

Delivering superior customer experiences sounds great, but is it financially feasible? Is it worth investing in?

Johanna: I doubt anyone would argue that investing in improving customer experience isn’t worthwhile. The bigger question might be what kind of metrics we can use to track the return on investment or how we validate business impacts. For instance, we need to figure out which aspects of customer experience explain or support repeat purchases by customers.

Anni: I’d flip that around. Companies can’t afford not to invest in a good customer experience. It has become such an essential part of growth that it can no longer be overlooked.

Can you name examples of Finnish companies that stand out in customer experience?

Johanna: Different companies are at various stages of their journey in building customer experience. I would say that in companies that are further along, customer experience isn’t just lip service; it’s genuinely a part of the strategy. It shows in the everyday operations of the business.

Anni: Finavia and Helsinki-Vantaa Airport come to mind here. Over the years, they have clearly focused on understanding and enhancing the customer experience for both Finnish and international clients. This commitment has been reflected in various awards and recognitions, such as being named the Best Airport in Northern Europe 2023 by the SKYTRAX World Airport Awards.

 

Not a day goes by without a mention of ChatGPT or artificial intelligence. The AI buzz reached unprecedented heights around the new year, but is it just all hype, or are we witnessing a revolutionary leap forward? We had an interview with Antti Merilehto, who has spent the last eight years immersed in AI. We wanted to find out where exactly we stand with AI right now.

Could you introduce yourself?

I’m Antti Merilehto. In this professional context, I am an entrepreneur and an investor specialized in early-stage technology companies.

I train teams, executive groups, and occasionally individual leaders in companies for a living. Over the last eight years, I have specifically worked with artificial intelligence.

Today we are talking about artificial intelligence. Let’s start with a light question. When and how did you last use AI?

I used AI just eight minutes ago. I asked ChatGPT for some ideas for a webinar. I already had the content ready, but I wanted to tweak it to make it more sales-oriented. I asked for help from my AI colleague, who has a knack for rephrasing my ideas in a slightly different way.

AI is such an awesome workmate that I can leverage its capabilities anytime and anywhere.

In 2018, you published the book “Artificial Intelligence – Travel Guide for Leaders”, which was the best-selling business book of that year. What have been the biggest changes in the field of AI since then?

A lot has happened in the meantime—both visible and invisible changes. In business, artificial intelligence is now frequently used for making predictions. It helps, for example, in forecasting which customers to contact at any given time and where to allocate resources effectively.

The biggest change is that very few medium or large companies operate anymore without some advanced analytics spinning in the background.

Of course, we must also mention ChatGPT, which is a single language model interface. In the grand scheme of things, it doesn’t really matter what kind of technologies exist until people can actually get their hands on them. ChatGPT provided a tool that anyone can use very easily. Consequently, the interest in artificial intelligence has exploded dramatically.

For my business too, ChatGPT has been a white swan.

Artificial Intelligence has become an even bigger topic with ChatGPT. Is AI worth all the hype?

If you frame it like that, then probably not.

In the AI conversation, there are people involved who understand about as much as a pig does about windmills. Often, it’s not understood that the quality of data determines the outcome in almost every situation.

If three companies adopt the same AI application, the outcomes are likely to be very different. The toolset is identical, but the results depend on the quality of the available data.

In my opinion, AI isn’t worth all the hype it gets, but in some aspects, it’s an even bigger deal than the hype suggests. It already enables us to achieve many great things.

According to Forbes Advisor, 97% of business owners believe that ChatGPT will benefit their business. Is it really such a significant game changer?

Three percent of respondents are wrong.

I have an office in Helsinki’s Punavuori district. In the neighboring block, there’s a bakery run solo by a French baker. He bakes a certain amount of pastries each day and delivers them to nearby restaurants. He doesn’t need ChatGPT.

If even a single person in the company uses a keyboard, then ChatGPT is definitely beneficial. It’s an industry-independent tool that’s equally useful for solo entrepreneurs and global market leaders alike. With it, anyone can whip up an innovation voucher application in no time without needing help from a communications expert.

Recently, we were just thinking about doing some pilots, but now many companies are creating AI strategies. What exactly has changed?

Even academics who study algorithms and AI professionally wouldn’t have believed that language models could evolve this fast.

Language models like ChatGPT suddenly made AI a more comprehensible matter. This shift brought AI into the corner offices of businesses. In many companies, top executives had the revelation, “Holy smokes, this can enable a whole bunch of things.” There was also a wake-up call across businesses realizing that the rapid development of AI is going to change numerous ways we work.

I’ve also noticed that conversations with clients have been different from before. Attitudes have changed. Knowledge and understanding have also grown tremendously.

Artificial Intelligence is no longer seen as just a separate component that’s slapped onto a machine. So, in discussions, the focus isn’t on what AI could do but rather on identifying business challenges and figuring out how to solve them. Sometimes, AI is the solution to the challenge.

In a nutshell, AI is now being advanced not from a technology standpoint, but a business-driven one.

Large companies are naturally at the forefront, but what is the relationship between SMEs and AI? Can AI be leveraged even with smaller resources?

I’ve even been training solo entrepreneurs on how to use AI tools. What does a solo entrepreneur do? They communicate with their customers.

As a sole proprietor, one naturally tries to be the master of their own destiny, like Jari Parantainen, and package their own services and expertise. In this endeavor, artificial intelligence is an excellent assistant.

Imagine that you become a vinyl record dealer. With the help of artificial intelligence, you can get the establishment papers done in a flash, and when a potential landlord makes an offer on the rental space, ChatGPT can help you come up with reasons why the rent could be, say, 20 percent lower.

It’s particularly the small business owner who massively benefits from having a small army of (AI) coworkers at their disposal.

Therefore, leveraging artificial intelligence really isn’t about the resources available.

Do you have any examples from the SME sector?

There are tons of examples I could give.

Take, for example, the energy sector. Last winter, not a single company in the industry had enough customer service reps to handle customer inquiries. What if we had collected all the old feedback and data from customer service conversations and used them to train a language model to respond to customer questions?

Antti would still be there as a customer service rep, answering queries, but ChatGPT could handle a large volume of contacts and immediately respond to commonly asked questions.

Let’s introduce a completely different example. If you operate in an industry where the buyer is a politician, then you’re essentially doing lobbying work.

I’ve been helping numerous influencers leverage ChatGPT, as ministries and such are churning out thousands of reports that an influencer should, to some extent, be aware of. It’s a utopian notion to think that one person could get through all of them. With ChatGPT, sifting through and analyzing information becomes vastly more efficient than ever before.

Consider what this change means for all the lobbyists and lawyers!

What have been the most amazing AI applications that you have come across?

I’ve picked out one boring but sensible example, one funny, and one business-related example.

Boringly formal but immensely important, an example relates to slowing down climate change and how artificial intelligence can enhance energy efficiency. This example initially inspired me to write a book on AI.

Developed by Google, DeepMind was able to reduce the power consumption of data centers by 40 percent. As global energy consumption swells every couple of years and climate change continues to accelerate, how can we reduce energy usage in all existing entities, such as data centers? While this might sound like a rather invisible and even dull issue, it significantly impacts our ability to keep this planet habitable.

From the “Funny” category, I want to highlight internationally successful photographer Antti Karppinen. As a visual person and an amateur photographer myself, I have been utterly amazed by how Karppinen utilizes AI in his art. He recently released a series called Ridiculously Strange Finland, which challenges us to question whether the images could be real. Of course, they are not, but they look just like real photographs. If you consider the purpose of art, in my opinion, it is to present familiar things in a new light. In that, Karppinen succeeds remarkably well.

For a business example, let’s take a fresh case where we created a ChatGPT application for experts to use our company’s internal database. We figured that if the same application had been built two years ago, the price tag would have been around 100,000 euros. Now, the bill was just 20,000. So, the cost of the same implementation has dropped to a fifth over two years. Since the application significantly enhances the efficiency of work for all the company’s experts, we’re talking about days rather than months regarding the return on investment.

Many industries are currently facing a talent shortage, so why not employ tools that allow current employees to work much more efficiently? When machines handle machine tasks and humans do human tasks, perhaps we won’t drive people to exhaustion by the end of their shift. I want to believe that good companies can see these opportunities.

What should business management understand about AI and algorithms today?

  1. AI is already here today, and it’s not going anywhere. Things are going to change anyway, so it’s first and foremost about change management. How do you create the conditions for people to succeed in the midst of these changes?
  2. It would be a good idea to do a scenario exercise in which they think about what a competitor company in the same field could do by utilizing artificial intelligence.
  3. The decision-maker should know what would be the sweet spot of using artificial intelligence in his or hers own company. In other words, you should understand who in the company does repetitive work (for example text production and creating reports) and how much of that is done in general.

How should you get started?

Generally speaking, I’d say through something concrete. No Midjourney-created Avatars to represent the company on Instagram. It’s best to start from the everyday life of people.

Here are three concrete steps to start with.

  1. Company management must define how they use artificial intelligence tools at once. One example of this is instructing employees not to enter any customer data subject to the GDPR into ChatGPT. These require clear rules of the game.
  2. The company’s responsibility is also to offer its employees growth paths, i.e. to tell what artificial intelligence tools are and how they work, and in the future to also offer appropriate training for utilizing artificial intelligence. So learning should not be solely the responsibility of employees.
  3. As an individual, you should approach artificial intelligence with an open mind. Whenever you do some repetitive work, you might wonder if an artificial intelligence tool would be helpful.

Should there be more talk about AI at workplaces?

Based on my experiences, the topic – especially ChatGPT – has been widely discussed around coffee tables. It has also been thoroughly dissected in the media.

Next, I want to see us move from talk to trials. That more and more people are trying out AI tools in all sorts of tasks, such as in generating reports or crafting product descriptions.

twoday Biit has appointed the seasoned technology expert Markku Laukka as its new CEO. Laukka joins twoday Biit from Accenture, where he has been in charge of the company’s Salesforce business and its development in Finland over the recent years.

Laukka, who embarked on his new role at the beginning of August, brings a substantial wealth of experience from various industries, particularly from the technology sector and consulting business.

Before moving to twoday Biit, Laukka had spent over 20 years at Accenture, holding various leadership positions. For the last decade, he was in charge of the company’s Salesforce operations in Finland.

“twoday Biit was a company I was already quite familiar with. I knew how the company had been developed with a long-term perspective and how it had successfully gained a strong foothold in the Salesforce market in Finland,” Laukka explains.

Laukka embarks on his new role with the goal of helping the company make its next big leap in growth.

“Biit has long been a strong player in the Finnish market. Now, the goal is to seek even more vigorous growth as part of the twoday group.”

In his role, Laukka follows Ikla Puustinen, who has led the company since its inception but stepped aside from the company’s operations at the end of April.

Markku Laukka

Contact:

Markku Laukka, CEO, twoday Biit Oy, +358 40 772 5811

Have you experienced an IT project that crossed the finish line on time and within budget? Congratulations! You’ve been part of a project where scope management was handled properly.

Those three cornerstones of project management, namely time, money, and scope, are intertwined in such a way that you can’t increase one without affecting the others. Yet, more often than not, the scope of the project seems to stealthily expand as the project progresses – and bam – there you have it, the dreaded Scope Creep!

For the client, Scope Creep means either an extending schedule or a growing budget – usually, it’s a bit of both. When planning development work, we start with average estimates in terms of time and labor. The supplier wants to make an offer that is attractive but also sizable enough to deliver a functioning system. And no matter how much experience one has, these estimates are always just that, estimates – not promises of the future.

For the supplier, even a slight scope creep can create pressure to stay on schedule and within budget, causing the project manager sleepless nights and gray hairs trying to prevent it. It’s all too easy to start cutting corners on the “invisible work,” such as testing and adhering to best practices in version control.

This inevitably leads to a deterioration in quality, making the supplier appear unprofessional.

Although I thoroughly enjoy the Finnish language, there’s no suitable translation for “Scope Creep.” I hope you’ll forgive my use of the term from here on out.

When projects just swell and swell

There are numerous reasons for Scope Creep. Depending on the size and nature of the project, it can be quite challenging to estimate the total cost or the required time to cross the finish line in advance.

Often, projects are constrained by factors such as maximum budgets or deadlines. Regardless of the delivery model, be it waterfall or agile methods, the same principles of scope management apply. For simplicity, I will use the tools and terminology of the agile method in this discussion.

Scope management begins with defining the project objectives.

What are we aiming to achieve with this project? What should the final product be capable of? What functionalities must be available to the end user? What is the sufficient level of functionality for automation or the user experience?

The answers to these questions set the foundation for workload estimates. Nowadays, when assessing the scope of IT projects, we’ve gotten pretty good at accounting for all sorts of surprises that pop up during the project, as well as the time needed for testing, deployment, and documentation. Despite this, it’s tough to draw a firm line on just how extensive a project should be. Especially tricky to estimate are integrations between systems.

Agility does not mean lack of planning

Contrary to many prejudices, the agile delivery model doesn’t just throw plans out the window. On the contrary, continuous evaluation and simple math ensure that the big picture remains under control.

Core tools of agile development include the backlog and user stories. The backlog is a list of tasks that encompasses all the tasks and wishes pertaining to the project. These tasks are written in the form of a user story, formatted as “<Who> needs <what> and <why>”. True to its name, a user story describes a business need from the user’s perspective, not a technical description or a task to create button x in location y.

From the backlog, user stories are selected for development during the sprint in accordance with priority. A sprint is a period during which the delivery team develops the chosen tasks, which are ready to be moved to production at the end of the sprint. The duration of a sprint can be determined based on the project or development model. Typically, sprints last two weeks, but they can vary from one week to one month.

Whether you’re using project management software or a spreadsheet, it’s crucial that the backlog user stories are evaluated for workload and prioritization is done at the end of each sprint. This way, any creeping scope can be addressed promptly.

The user story description must include a clear definition of done. When the particular user story passes the acceptance testing with flying colors, it is closed, and the functionality is moved to production at the end of the sprint. Sounds simple, right? If only it were that easy!

The definition of “finished” always depends on the interpreter, and mere technical functionality doesn’t guarantee customer satisfaction. A clunky user experience might technically work, but if it’s too difficult to use, it can decrease user engagement and thus, the value delivered to the customer.

In challenging cases, it’s wise to factor in the time spent refining usability in addition to just the technical implementation. Keeping the customer’s business objective as a core part of the project makes it easier to make the right decisions when managing scope.

Transparency benefits everyone

Transparency in project planning and delivery alleviates pressure on the supplier side in managing scope.

It’s much easier for the client to grasp the big picture and the dependencies between components when communicated openly and regularly. Excess requests and desires diminish when the entire implementation is transparently laid out by the numbers.

Even the client can see that it’s impossible to complete new functionalities within the given time frame when all tasks have been pre-estimated.

No amount of dissecting user stories is enough if the project owner either can’t or won’t make the tough choices. Because, indeed, that’s what success demands. Prioritizing one thing over another.

When it’s a showdown of tough versus tough, not all user stories are created equal. Needs can also change during a project; that’s why prioritization must be ongoing.

In the delivery side, you might hold the title of Scrum Master or Project Manager. However, prioritizing user stories is not part of that role. That responsibility lies solely with the client, regardless of whatever title they may hold within the project. I’ve found it highly effective to use price tags when a client wants to stretch the scope of a user story.

Customer: “Otherwise, this functionality is great, but could we get our logo added to each screen, nicely spiced up with flashing lights?”

Me: “Sure. Rough estimate for that is two days. Should we drop something from the upcoming sprint, or shall we increase the budget by x euros?”

Suddenly, additional requests decrease dramatically when even the smallest matter is presented with two concrete options, each having its own consequences.

The work of a consultant or developer becomes tangible, and a large project is no longer just an ambiguous black hole sucking in money. We are one team, united by the same goal: to bring the project to completion within the set timeframe and budget. No Scope Creep allowed.

“Just 9.99 euros.” Price optimization has been practiced ever since someone discovered that changing the price can yield better results. With technological advancements, the possibilities for optimization have multiplied. Nowadays, it’s possible to offer the best possible price to the customer in all scenarios. This applies to B2B business as well, where competitor pricing information isn’t generally available. In this article, we spoke with Joonas Ollila.

We will talk with you today about optimization. What is it really about?

Optimization is all about finding the best possible option from a myriad of different choices. Simply put, it’s about seeking the most efficient way to achieve goals within set parameters. Technology enables us to sift through virtually unlimited options, including those that might elude human detection.

Tell us a little bit about yourself?

I help clients find solutions to a variety of problems. My background is in applied mathematics. I wanted to be in a role where I could make the broadest possible impact, which is why I ended up in IT consulting. I also enjoy how this isn’t a zero-sum game; in the best-case scenario, everyone involved wins. For instance, if we consider sales, optimizing the price can lead to the best possible price from both the seller’s and the buyer’s perspectives.

Additionally, by leveraging technology, it can be done in such a way that the salesperson hardly needs to spend any time on it, and the customer doesn’t have to wait around for an offer.

What should business decision-makers know about optimization?

Decision-makers usually have a pretty solid high-level understanding of their organization’s goals and the methods to achieve them. These methods, such as sales, marketing, customer service, and human resources, require their own unique processes. It often comes as a surprise to corporate executives that all these areas can be significantly enhanced by automating parts of the process through an optimization model.

The results that come as a surprise are often the achievable outcomes. It’s not uncommon for optimization in certain areas to increase efficiency by 5-10 percent. The principle of optimization is simple, but the technical implementation, with its data pipelines and algorithms, is best left to the experts.

What can optimization be applied to in organizations?

Optimization can be applied to a wide variety of things, but here I’ll showcase a few different examples.

Let me start with a very everyday example, which really opens up the practical side of optimization. Probably all of us have baked gingerbread cookies at some point and faced the challenge of how to arrange the cookie cutters on the dough in such a way that minimizes waste and maximizes the number of cookies for the oven. It’s the exact same scenario in industry when placing components on a circuit board or cutting parts from a steel sheet.

In organizations, optimization works in theory in much the same way, but things are far more complex and there are many more moving parts.

Let’s take workforce planning as an example. First, we need to understand what kind of jobs we actually have, meaning what needs we are meeting with our workforce. After that, we plan the shifts based on what needs to be accomplished during the day. It sounds mechanical, but that’s really what it is in reality.

Optimizing this aspect benefits everyone involved. For the individual employee, the advantage lies in the ability to efficiently size their workload. There’s no need to twiddle your thumbs or try to do too much. For the supervisor, it provides assistance in planning. From the senior management’s perspective, transparency is increased, and the predictability of labor needs improves. Above all, the greatest impact is seen in productivity growth, as optimization allows more to be done with the same resources.

Another classic and prime example is the production environment. Production lines always have significant money tied up, so it’s crucial that the machinery operates efficiently. These production lines are generally complex assemblies that you shouldn’t try to manage based on gut feelings or Excel spreadsheets.

The third example is the delivery of food orders, which is a classic optimization problem. How can you, say, deliver 20 food shipments as quickly as possible and with the shortest route choices? In the bigger picture, the most crucial factor, of course, is that the fewer vehicles used for deliveries, the better.

From the organization’s perspective, we can also examine which food orders are the most profitable and guide ordering behaviors, for example, with pricing. If I place an order between 3-4 PM today and my neighbor happens to make an order at the same time, we can be encouraged through pricing strategies to continue placing our orders simultaneously in the future.

Price optimization sounds interesting. How is it done in practice?

Price optimization is built on the foundation that we have data on customer reactions to different prices. There are won and lost deals, along with information on what products or services were included in these deals. Therefore, we can deconstruct these won and lost deals to start searching for the optimal price based on these components.

One example could be the supply of IT equipment. Larger firms often order their supplies in bulk. Imagine wanting, say, 700 laptops, 200 mice, and 100 monitors. IT equipment suppliers frequently receive such large orders. Buyers, too, frequently send out requests for proposals to multiple suppliers. What’s more, the situation is always in flux. Some items are more readily available than others.

As a supplier, I’m well aware of the availability situation, and based on historical data, I know that Customer A has purchased at a certain price and Customer B has refrained from purchasing at a different price. By leveraging this information, we can explore price elasticity. For example, we can offer Customer C a 5% discount if we are 90% certain the proposal will be accepted and that we will still achieve a sufficient margin on the deal.

Here’s how we acquire the optimal price for a deal. Calculations can account for several predefined factors, such as inventory status, the likelihood of the sale, and the margin in this example. You definitely shouldn’t start these calculations simply based on intuition. In Finland, there are still many B2B companies making good profits that do not optimize their pricing.

What if the productivity of these companies could be enhanced by, say, five percent? With optimization, pricing decisions become much faster and more accurate. The more complex the request for proposal, the more crucial it is to nail the best possible price. As a seller, I wouldn’t want to settle on a price based on scant preparation and back-of-the-envelope calculations. It would be great to have a tool in the toolkit that could automatically provide the right price for every situation.

Are there any other benefits to price optimization that we haven’t covered yet?

One definite added benefit is that information flows much faster. Especially in large sales organizations, not everyone has the time to discuss with each other. Optimization also allows for quick responses to changes.

For instance, if competitors have reduced prices within a certain customer group, optimization models enable a swift response to such changes. Optimization keeps us consistently on the pulse of market happenings. On the consumer side, the competitive scenario is different since prices are public.

We too have developed pricing robots aimed at optimizing prices in real-time, based on price data extracted from various sources. In the B2B world, prices are often not public, so pricing decisions are made based on customer reactions. By the way, as a little curiosity, the consumer-facing practice of setting prices ending in .99 is one of the oldest applications of price optimization in the world.

Someone once realized that by marginally lowering prices, sales happen in a totally different way. In a sense, the B2B sector has started to resemble the consumer market in that if one supplier responds to a request for quotation within a day and another takes a couple of days, the train might have already left the station. Some companies have gone as far as allowing customers to chat with a bot to get a preliminary price estimate, after which a salesperson provides a binding quote.

This certainly poses challenges for the chatbot, as obviously, as a customer, I think that the price estimate given by the chatbot is the price at which I can close the deal. This puts the seller in a tricky situation if the chatbot’s price estimate is off the mark.

You are specifically specialized in optimization. What are your customers typically like? What kind of implementations do you make for them?

A typical client of ours is a fairly large Finnish company. We’re talking about maybe the top 1000 businesses in Finland size-wise. Some clients just want us to supply something like a price optimization model and they handle the technical implementation themselves.

For some companies, we deliver a comprehensive optimization package that includes, for example, model building, practical implementation with data pipelines, and reporting. When it comes to technologies, it doesn’t really matter which IT environment we are implementing the optimization in.

In the lightest implementations, we’re talking about preliminary assessments and offering recommendations. These are usually about two-week projects. If you want some real software, like an analytics module, such projects typically span a couple of months. For broader solutions, we’re looking at projects lasting 4-5 months, tackled by a multi-person team.

Our clients are typically fairly large companies. The reason for this boils down to the sheer amount of data, its quality, and resources. If the goal is to increase efficiency by 5% and it requires a development project spanning a few months, smaller businesses often simply do not have the capacity for such an endeavor. It’s also clear that the outcomes multiply when we’re talking about a large scale or, for instance, large volumes. We’ve also collaborated with numerous startups. They generally want to refine a specific area to the absolute max, seeking to carve out a competitive edge in the market with that focus.