How investing in your back office affects top line results.

January 24, 2020

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Marketing Maven

Organisations can be guilty of letting back office systems and processes grow organically and unchecked as they focus on their customer offering. Often, much later than is sensible, it becomes clear that if the business is to achieve growth beyond a certain point, sustain growth or retain the best of their team, a thorough review of back office needs will be necessary.

Taking the time (and investment) out of customer-facing activity can feel like you're taking your eye off the ball. Investment in the back office is often referred to in terms of the bottom line but I'd like to make the point that it can often have a tangible effect on the top line, and fast.

Bad data = time wasted

We do not struggle to imagine ways to use data - chatbots, suggested add-ons, marketing personalisation and targeted advertising are the buzzwords we ascribe to data-reliant technologies like AI, ML and segmentation algorithms. What is often underestimated is the effort it takes to get that data shipshape for use in these 'market leader' systems.

bad data

Badly managed data is a huge profit-suck in any business. Ask any marketing or sales person; the biggest waste of their time is trying to find information buried in someone else's inbox or notes. By the time your Sales Director has admitted their team spends hours trying to find out when they last contacted someone, what that customer bought or didn't and why, you've already lost tangible revenue. But on the other hand, it can seem a huge over-investment to purchase expensive products like Salesforce or Thunderhead when you are still managing with email and a shared spreadsheet.

When Reason kicks off a new project with a client, one of the first things we want to learn is how you are currently coping. The task we are often set is to help a business innovate, disrupt or transform. It's crucial that our clients realise that step one is achieving those things is to 'get your house in order'.

As boring as it sounds, if your back office systems cannot provide or handle the data the shiny new digital service we are going to build for you, it will struggle to have an impact.

Good data = loyalty

Sorting bad data takes time and investment, but it's a relatively easy-to-quantify benefit to your business.

  • If you send 10,000 emails and only 6,000 of them actually hit a live inbox, 40% of your marketing effort and budget is wasted.

  • If it takes your sales team 40 minutes to trawl through duplicate records, match up misspelled names and different variants of a company name just to make one call, your cost of sale is markedly higher than it could be.

  • If your warehousing system integrations allows customers to buy stock but cannot respond to changing demand, the delay in dispatch can cost you in retention as well as revenue.

But once you've cleaned up your data - what next? As an investment, the value of good back office systems has to be more than net-neutral to justify diverting funds from customer-facing services.

Loyalty is the answer here, and it's twofold.

  1. Investing in back office systems that make the jobs and lives of your teams easier demonstrates a culture that values the efforts of those on the ground who make your business a success. Reducing churn, improving employee engagement and driving recruitment referrals are all costs that can be reduced by good back office systems.
  2. Good back office systems mean less mistakes seen by your customers. We've all cringed when you get a misdirected sales email followed swiftly by one saying "Sorry we made a mistake". Customer loyalty in the digital age is just as much about trusting what you're doing with people's data as the quality of your product.

Clean data = money well spent

There's several models for valuing the cost of bad data. The most obvious one tallies old conversion rates with new ones. But that requires you to make the investment before you can see how much it was worth and if you made the right choice.

Here's a simple calculation that we like for figuring that out before you invest:

d&b bad data cost

A Reason to get in touch

Now we've established what bad back office systems may be costing you, how do you fix them?

A successful digital transformation project starts by solving the right problem. Talk directly to your team to collect suggestions about which back office systems are in need of updating! You may have an idea of which areas need optimising, but those who use them every day will be able to tell you exactly where to direct attention for the most impact.

If innovation and disruption are on your agenda, providing an environment where existing members of your teams have the cognitive space and actual time to look beyond the day-to-day are the best investment you can make.

(If you need assistance, we can help!)