The deep digital transformation affecting industries such as finance and insurance has changed the business environment, giving companies the opportunity to increase business management productivity. The channels used to offer the companies’ products and services have been increased. As a result, the complexity of the design, definition and execution of commercial strategies has increased. This fact has exerted greater pressure on marketing budgets, already reduced due to the economic situation of recent years. One of the most affected channels by this adjustment was the direct commercial channel.
In Spain the number of financial branches has been reduced by 30% (1) and the adjustment is still in progress (2). This is why improving the efficiency and productivity of the sales network and increasing profitability are key today. According to experts, to increase business management productivity is undoubtedly one of the main challenges facing the sector in the coming years.
Therefore, it is interesting to consider initiatives that allow us to decide how to manage our commercial activity with certain guarantees. In addition to choosing the most profitable actions, avoiding excessive risks.
There are some proposals that can help to increase business management productivity, and therefore, the profitability of the direct channel (the branches and call centers).
The application of advanced analytical techniques and the ability to analyze different strategies will help us making the right decisions. Decisions that guarantee a more effective distribution of the sales force, aligning the global objectives with the individual goals of the sales network.
The use of statistical models is a common practice in the market, and they are an effective and indispensable tool to help us know how successful our strategy is. Data such as our product’s propensity to purchase, or the expected return on its commercialization, help us to support our decisions with analytical and objective criteria.
The more information to take into account, the more complex and difficult it is to decide which action is the most appropriate. Which channel do I use to run my campaign? How do I distribute the commercial actions? On what network? What product can I offer and to which customer? Who is the most appropriate manager to carry out a specific action?
Moreover, the management capability of the commercial network is generally lower than the volume of actions to be carried out, and selecting and prioritising the most profitable ones is usually a complex decision. The use of operational research techniques can help us to model all this complexity, according to the rules and restrictions affecting the company’s business process. And also these techniques allow us to analyze all the information we have, to make the right decision.
But in order to do that, we need to define the right criteria to assess them and decide which is better. And this approach usually varies over time. If we have a lack of liquidity, we will try to prioritize initiatives that help the institution to capture cash, while in the opposite case we will try to encourage initiatives that increase consumption. Our objectives can change, and in that case the criteria by which the strategy is assessed will also change. If we have the ability to compare different situations and change the rules of the game, we will have the ability to ensure that the decisions we make are aligned with our objectives all the time.
Scheduling commercial actions taking into account predictive analytics, prescriptive analytics and simulation, incorporates intelligence into the process. This combination is the way forward if you want to achieve the highest levels of profitability and efficiency for the commercial network, in all its direct channels.
Reports such as XIX World CEO Survey by PWC are proof of this. More than 70% of CEOs around the world consider data and analytics key to the future of their industry and an opportunity to improve their ranking against their competitors. The opportunity to increase business management productivity is there, you just have to go the distance to reach it.
