How AI Impacts Customer Experience

Published: April, 2018

Published: April, 2018

Received wisdom has it that established businesses and corporate giants are threatened by nimble start-ups. With this way of thinking the difficulties of truly transforming themselves through digitization are such that - even if they survive for a short while - in the long run they are doomed. And yet for those with the commitment and a plan, there is a chance of defying the odds.

A New Era…

We stand on the brink of a technological revolution that will fundamentally alter the way we live, work, and relate to one another. In its scale, scope, and complexity, the transformation will be unlike anything humankind has experienced before. For many years we have been in a digital transformation but today a third phase of transformation has begun. New technologies including AI and blockchain define the 4th Industrial Revolution.

The first phase of digital transformation was all about making information accessible. The second phase was all about Mobile and social media and how to connect people. The third phase is all about Artificial Intelligence. It’s the end of a ‘dumb, manual and disconnected world’ and the beginning of a ‘smarter, automated more connected world’. Leading companies are already moving from a Mobile first to an AI first Strategy and it is making technology cooler then ever before. Make no mistake, it is not about the evolution in technology, it is about technology changing the expectations of customers - fast. If you are not thinking about your customers the day after tomorrow, you are at risk of being left behind.

The Challenge…

For customers, the third phase of digitization will be fantastic. Without doing anything, customers will arrive in a world where faster than real time customer service, hyper personalisation and intuitive user interfaces resemble the ultimate convenience.

It is time to review your business plans and ask yourself, ‘How much time and resources do you invest in improving your Customer Experience today?’ And ‘How much is focused on improving the Customer Experience the day after tomorrow?’ Reality is, investments in Customer Experience in the day after tomorrow must start today!  

The day after tomorrow is a time where only those companies survive, who embrace an AI mindset to become data driven and build the best possible user interfaces. Customers will give for example a new App only one shot – 30 seconds, that’s it. In addition, voice-controlled user interfaces are already changing behaviour and making ordering products online easier than ever before. This could mean the end of buying as we know it. No doubt, we are entering a world where convenience will be the new loyalty.

The Rise of…

Customers are overwhelmed by their options when it comes to buying and they are increasingly too busy to sift through the ocean of brands and products. Customers will depend on personal digital assistants (PDA) such as Siri, Cortana, Bixby or Alexa to make their lives simple and easy. These PDAs will eventually become gatekeepers of customer data. With an in-depth and pre-programmed view of their ‘virtual’ masters, they will be best placed to make the right choices. A true 360° view of the customer starts here!

Marketers must recognise the fact that they will increasingly be marketing to machines one way or the other, whether they like it or not. Hence, in a 100% machine-based transaction, such as “essential buys”, nice images and emotional content are not going to cut it. The best algorithm will win!

On the other hand, “emotional buys” will never be based on 100% machine transactions. Therefore, you need AI to get you shortlisted, and then a marketer’s touch and creativity will be a crucial factor in influencing the purchase decision. This will be the perfect combination of art and science.

The Opportunity….

The world is increasingly dominated by huge technology platforms like Google, Facebook, Amazon, WeChat and Alibaba. It is a world where the winner takes all! It appears, as a business you have two choices. You either stand on the shoulders of these tech giants to leverage off these platforms or you can make a conscious decision to work smarter and fight back against these big digital commodity magnets by investing in ‘Marketing to Machines’, ‘Machine-to-Machine’ transactions and finding the right communication channels. At its core however, you must have embedded analytics and insights into your organisation’s DNA.

Similar to IoT a few years ago, the opportunity for brand owners and leadership teams is to understand and harness AI analytics and marketing ahead of their competitors. The opportunity for marketers is to shift the burden from them to AI and make engagements with customers a truly personal interaction at scale.

So, is AI really improving Customer Experience? Short answer is yes – Those companies that are adopting AI correctly are improving CX whereas other companies may see AI only as an opportunity to reduce costs of what they are doing now. Peter Drucker famously said, “There is nothing quite so useless as doing with great efficiency something that should not be done at all." Giving customers in today’s world an impersonal service at a lower cost is a race to the bottom.

How…

In my view there are seven key areas where AI will influence Customer Experience and its evolution will change Customer Relationship as we know it.

1.       Curation of Content

This already exists today. Best example is Facebook or Netflix. AI algorithms decide what content is surfaced to you. They curate the content based on your personal preferences, likes and reads. You don’t see the curation of content anymore. It is invisible and most of the time you wont even know it happened.

2.      Content creation

AI technology is getting smart – fast. Today, AI already assists humans in creating better and content like writing articles but also more creative tasks like composing music.

3.      AI helps you to content

AI (embedded in Google Home, Alexa, Bixby and Siri) helps you to get the exact piece of information you need at any given moment in time. You can ask a specific question and you will be given a specific answer. Imagine the potential this has for governments to provide specific answers on tax or legal issues.

4.      Recommendations

Today, organisations with a successful digital footprint like Amazon, Booking.com, Netflix and many more, are using AI to recommend to you relevant listings based on your search, saved and purchase transactions. This is nothing new today but a key AI capability.  

5.      Predictions

This is where the AI evolution starts to get interesting. Accurate predictions will become part of our new reality.

Scriptbook is offering AI based screenplay analysis & box office forecasts. In simple terms their AI technology is predicting the success or failure of a movie before it is produced. Imagine the financial implications successful predictions will have.  

6.      Automation

The evolution in this space will be a game changer. E.g. although autonomous transportation or chatbots exist today, both will significantly evolve over the coming years and will transform CX to a whole new level. Both technologies are still in its infant stages. Similar to what mobile phones were in the early 1990s. Recently IBM Watson introduced "Rachel" Avatar from Soul Machines. Imagine if the chatbot “Rachel” is as immature as our mobile phones where 30 years ago, what chatbots will look like and be capable of in just 10 years from now.

 

7.      Contextual analysis

This is ‘utopia’ in the evolution of AI and won’t be something for the very near future. Today we have smart AI technologies operating in a specific domain like Spotify or Netflix where recommendations are being made to improve the CX in that one domain. Imagine if Spotify had access to other data sources e.g. Facebook, Netflix or Google and could make recommendations based on your mood sensed through content posted on Facebook or movies watched. 

Final Thoughts…

AI is here to stay and the day after tomorrow starts today. Make no mistake, AI is not about the technology. You need a culture which is ready to embrace the changes that AI will bring. Knowing where to apply AI in your business is the easy part. The difficult part is to understand how.

It is time to prepare – time to invest – time to act!

Is your business ready for customers the day after tomorrow? How much time are you investing,

  • Creating data leverage?

  • Developing better user interfaces?

  • Fighting the digital commodity magnet?

  • Harnessing the benefits of augmented intelligence? 

Published by

Hans Arz 

Founder and CEO at Micado

April 16th, 2018

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