By Yamini Rangan

The biggest topic on everyone’s minds this year at INBOUND was the same as last year: AI. But the nature of the conversation has changed.

In 2023, headlines indicated that AI would change everything, for better or for worse. It was going to bring an economic revolution, usher in a gold rush, and destroy humanity, all at once.

One year later, the headlines say the opposite story: the AI revolution is losing steam and the AI hype bubble is deflating. So what’s the truth? Is the recent wave of AI disruption false hype, or a true revolution?

At INBOUND, I made the case that these are not the right questions to ask or answer. Because first and foremost, go-to-market professionals are asking themselves a simpler question: how do I drive growth?

After all, everyone seems to feel the same way: lately, it’s been harder to grow. So it’s worth understanding why it’s been so tough, what has changed in the customer journey, and answer the question: where do we grow from here?

3 Reasons Why the Growth Formula Is Broken

The growth formula is simple: More traffic * Higher Conversion * Better Retention = Higher growth. But unfortunately, it is broken.

Across the board: traffic, conversion, and retention are down, and therefore, so is growth. According to our research, only 50% of reps are hitting their quotas, compared to 66% just two years ago.

But why? We’ve seen three big trends that have contributed to this downturn.

1. Search has fundamentally changed. Search engines used to provide bluelinks that get customers to your website. But with AI overviews and soon SearchGPT, customers are getting more answers without leaving search. That means fewer visitors to your website.
2. Social platforms are holding on to customers longer. They’re becoming destinations themselves, where customers are spending more time. That means fewer visitors still.
3. More than ever, people want to talk to people. Not brands. Customers check Reddit, visit G2, watch YouTube videos, and talk to their peers first — so by the time they come to your site, your customers know more about you than you know about them. That means the bar for sales and service teams is incredibly high when talking to customers. And if that bar is not met, conversion and retention will go down.

Two Paths for AI to Drive Growth: Acceleration and Transformation

So how do go-to-market professionals address these challenges? History has the answer: when technology solves old problems in new ways, it leads to profound change.

That’s why the internet and smartphones were so transformative — they addressed fundamental needs like information access and human connection.

AI might just achieve the same kind of change for growth. We see that potential firsthand from surveying hundreds of our customers who have embraced AI. And we came away with two overarching observations: Today, our customers are using AI for acceleration. And soon, they’ll be using it for transformation.

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Source:: HubSpot Blog

Author: Aaron