The financial industry is a tough space where every single business keeps fighting tooth and nail to be at the top. However, metrics have shown that companies can’t achieve scalable and sustainable success without the sales and marketing departments.
The sales department is the lifeblood of every organisation. They are a crucial part of businesses because they are directly responsible for generating revenue for the organisation in which they function. Without their input in attracting potential customers, building brand awareness, and converting leads into paying customers, businesses would struggle not only to gain market share but also to run their daily operations. In other words, no sales or marketing translates to no business.
For this reason, businesses must ensure that their sales and marketing departments make smarter data-driven decisions. From my experiences across several industries, I can 101 percent assure you that the best way to do this is by applying the right financial insights. This brings us to the question: What is financial insight?
There are several definitions of financial insight. Some define financial insight as information extracted from analysing financial data that can be used to inform and develop strategic decisions within a business. In contrast, others refer to it as the analysis and interpretation of data to inform business decisions. With these definitions, we can say that financial insights are vital facts that help businesses make informed decisions.
FOSS, a maritime company, once said this: ‘Data is knowledge, and knowledge is power. With the right information on hand, we can make informed decisions in real time.’ In the world of finance, financial insight is information that helps businesses make decisions in real time. Financial insight is important because it provides details on key performance indicators (KPIs) such as profit margins, revenue growth, and return on investment (ROI) that help a business be more in sync with the happenings in the finance space.
There are several types of financial insights a business can adopt in their day-to-day running, and they include revenue insight, which is the analysis of revenue streams such as sales channels, product lines and customer segments; cost insight, which is the examination of cost composition, including marketing costs and operational expenses; and cash flow insights, which analyse cash flow patterns and paths such as accounts payable, inventory management and account receivables.
How, then, can financial insights help sales and marketing make smarter, data-driven decisions?
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In the financial field, sales and marketing are usually based on personal experiences and industry norms. However, this method can lead them towards making costly mistakes and missing opportunities. Financial insights provide a data-collated framework that enables sales and marketing teams to:
Identify high-value customer areas:
With the help of financial insights, the sales and marketing teams would be able to determine profitable customer sectors and craft out their campaigns to suit the tastes of the customers for more effect. One exemplary company that applied this strategy to its sales and marketing is the BMW Group with their BMW Individual campaign that was first launched in 1999. What did they do? They used financial insights to identify that high-status individuals mostly purchased customised goods. So, to target high-value customers, they introduced the BMW Individual, which is a service that appeals to customers who are willing to pay a premium fee to get a customised vehicle that only they can have. Don’t you think that was brilliant?
Optimising pricing strategies:
Using one of the key attributes of financial insight, which is analysing revenue and profit margins, sales and marketing teams can pinpoint the ideal pricing they can attach to their products and services and also determine if there should be an increase or decrease in the pricing of their goods. The case study I would like us to look at in this light is the popular brand Apple. With financial insight, in 2019, Apple discovered that there was a $5.4 billion decrease in sales from the previous year. To address this, the CEO of Apple, Tim Cook, announced a new pricing strategy, which included a reduction of prices for certain types of iPhone models. Using that information, they were able to remedy the situation and boost their sales by $14.4 billion by 2020.
Measuring campaign effectiveness:
Sales and marketing teams can utilise financial insights in tracking ROI and other KPIs that would help them evaluate the successes of their various campaigns and make data-driven decisions concerning future investments. Another example of a brand that financial insight helped is the popular Jumia Nigeria. In 2012, the brand launched a campaign aimed at promoting its mobile app to drive sales and increase sales. To check if the campaign was highly effective, they traced key performance indicators (KPIs) such as the number of downloads, in-app purchases and revenue generated by the ads they pushed out. This, in return, helped them identify the success of the campaign and find areas that needed improvement.
Overall, financial insights are powerful tools, and the case studies provided are proof that they are indeed effective. If you want your sales and marketing team to make smarter, data-driven decisions, then seeking the right financial insight is an applicable strategy you cannot help but adopt.
