Businesses face revenue loss due to underutilisation of AI technology

Businesses are experiencing a notable loss in revenue due to underutilisation of AI technology, according to recent findings.

A survey commissioned by Clari, comprising 420 revenue leaders, reveals that systemic breakdowns in the revenue process, known as "Revenue Leak," are responsible for substantial financial losses.

The inaugural 2024 Revenue Leak Report by Clari indicates that 26% of global revenue is lost owing to these breakdowns. Despite these challenges, 72% of revenue leaders remain optimistic about achieving higher revenue in 2024, even though 61% did not meet their revenue targets in 2023. To address these issues, many companies are adopting a dual approach: increasing their workforce and investing in AI-driven revenue technologies.

Among the key findings, 64% of companies plan to expand their revenue teams this year, and 61% are set to boost their revenue technology budgets. Andy Byrne, CEO of Clari, highlighted the significance of these investments, stating, "A new generation of Chief Revenue Officers (CROs) and Revenue Operations (RevOps) leaders are turning to AI and purpose-built revenue technologies to help their growing teams identify and diagnose Revenue Leak and orchestrate consistent and repeatable Revenue Cadences. That's how winning companies will be able to create, convert, and close more revenue."

Current adoption of AI in the revenue process stands at 32%, with an additional 67% planning to integrate AI within the next year. The primary benefits of adopting AI, according to respondents, include faster time to revenue (58%), improved decision-making (56%), and better assessment of market and competitive dynamics (50%). Key investment areas identified were Sales Forecasting (34%), Sales Enablement (33%), and Sales Engagement (30%). Nearly half, or 45%, of companies are beginning to use purpose-built revenue platforms.

The report provides deeper insights into specific areas where Revenue Leak occurs within the revenue process. Creating Pipeline faces challenges such as inadequate upsell/cross-sell pipeline tracking (56%), deficient marketing-to-sales lead handoff (54%), and ineffective pipeline generation (54%). Converting Pipeline issues are attributed to an inability to diagnose deal progression (49%), uncertainty about where pipeline drop-offs happen (49%), and misalignment among buying teams (48%). In Closing Pipeline, the dominant issues are incorrect or hidden forecast and pipeline details (71%), missed upsell/cross-sell opportunities (63%), and slipped deals (60%).

Revenue Leak, if left unaddressed, could have severe repercussions on future business strategies, with potential outcomes including slow or declining growth (54%), reduced budgets (54%), and reduced headcount (49%).

Byrne underscored the urgency of enhancing revenue processes, adding, "Clari's survey findings suggest a pivotal moment for revenue leaders to rethink their strategies to stop revenue leak and capture more revenue. Adopting AI-powered revenue technology can lead to substantial improvements in revenue attainment and operational efficiency. As organisations plan for future growth, investing in advanced, purpose-built platforms can provide them with a critical edge over competitors, particularly in sectors still reliant on outdated systems such as CRM and spreadsheets."

The research was conducted by independent firm Vanson Bourne in April 2024. The findings provide crucial insights that could help businesses optimise their revenue processes by leveraging AI technology and tailoring strategies to address inefficiencies.