In this exclusive interview, CRM Buyer discusses with Rao the future of predictive intelligence.
CRM Buyer: How does predictive analytics help with both sales and CRM?
Rao: The most important thing with predictive analytics is to not look at sales, but other areas. CRM is a mature industry, but it's fundamentally not moving the needle for the user, for the subscriber -- the sales rep or manager. It's fundamentally recording your activities, but it doesn't really let you commit with confidence to drive the right outcomes.
That's what predictive analytics can do. It can help you find the right content faster. That's what the state-of-the art is for sales. You're trying to understand what deals to work on to meet your target and make money, and that's what predictive analytics can do.
CRM Buyer: How do you see the relationship between sales and CRM?
Rao: We need data, and we are data junkies. The data comes from CRM and email and social media, and what predictive analytics does is to discern patterns in data -- and that's where it's very powerful. If you're selling more, you're better relating with your customers.
It's not just sales. It's the relationships that you're building. Those are far more powerful, whether it's cutting revenue streams, cross-selling, building longer relationships, or driving more efficient revenue growth. Predictive analytics is helpful for new business, but the same principle applies for finding which customers are not happy. You can rank and look for patterns.
CRM Buyer: Is there still a need for people in this world of predictive analytics and machine learning?
Rao: The magic happens with humans. With all the work going in AI, humans are still the ones that make magic happen. You want to use machines to do more magic, and machines help you to put your emotions in check. Emotions can be powerful, but they might let you go astray, so predictive analytics strengthens the positive aspects of the emotions and dampens the negative bias.
If it's used right, it will reinforce your intuition and judgment and expertise -- tell you that yes, you are on the right track. Or it can temper your response and ask, "Are you sure you want to go down that path?"
CRM Buyer: What is the secret to analyzing data accurately?
Rao: How do you get adoption? You need to have confidence in the tools. How do you build confidence? Confidence comes when you can verify what the machine is telling you is indeed reliable. That is one part of making data science useful. If Netflix keeps recommending horror movies and you hate horror movies, you'll lose confidence.
The other side that is different from consumer applications is that organizations are all about well-established business processes. You need to make it part of the workflow -- not something different or new or alien. A key part of success is not making it exotic or new. You don't want it to be a shiny object that's put on a shelf. You want it to be key to the enterprise workflow.
CRM Buyer: Why are what-if scenarios important?
Rao: The thing that makes sales more interesting and challenging than any other field is the uncertainty. Everything is not in your control. There are competitors and prospects. Given those uncertainties, you can't just say I know my plan, and I'll stick to it.
You need to deal with these uncertainties in time in a sales environment. What are my backup deals that I can work on to make up that gap? You're always doing contingency planning, and that's an important capability.
CRM Buyer: What is the secret to identifying and prioritizing key deals?
Rao: Having an unbiased view into the risks of the deals. We call them "uncertainties." How can you measure those? You can measure the risks and opportunities against another. If you have an unbiased view, then you can make a smart decision.
CRM Buyer: What's in the future for predictive intelligence? Are there limits to what can and will be predictable?
Rao: It is moving things to a higher level of performance in organizations. Everything is getting compressed in our space, and to be competitive and to move at faster speeds, predictive analytics is becoming a must-have in the enterprise.
CRM Buyer: How does all of this ultimately tie back to CRM?
Rao: With customers, you can start giving alerts when you think a customer is at risk. You're trying to build a relationship and maintain it. The squeaky wheel always gets the most attention. If this customer is complaining a lot, maybe that customer is at risk for attrition.
The machine might come and say this customer is actually a very demanding customer, but they're not really at risk. You don't have to give a discount. You can maintain your margins and also retain your customer.
The unbiased view is key. That's all machines can do. The value is that emotions can have bias. Machines can remove that bias and help drive better performance.
CRM Buyer: So it's like Spock.
Rao: Exactly. Captain Kirk is amazing, but without Spock things can be catastrophic.