AI: Personalization Changes Customer Behavior

Personalization Changes Customer Behavior

Analytics are great and AI has been instrumental in finding insights, segmenting customers and creating data visualizations to help marketing understand their customer.  However, artificial intelligence (AI) and machine learning are foundational. The real break away comes when you can harness AI and machine learning to step beyond mere data exploration to decisioning that drives true personalization.

Decisioning refers to putting what you’ve learned into pragmatic practice and personalizing messages to your customers to create value for them. Decisioning requires translating your analytics and AI investment into measurable results such as enhanced customer loyalty, reduced customer churn, increased customer satisfaction and increased revenue.  The key to achieving these goals is giving your customers a more personalized experience—a reason for remaining, and rewards that foster personalized involvement with your brand.

Decisioning capability is required because customers are fleeing from the distracting noise of imprecise marketing.

“It’s noisy out there: multitasking, endless choices, non-stop ads on any device. The emotional labor of these distractions is converting to fatigue for consumers today,” according to a recent report from Forrester. “Current trends like yoga, KonMari, and hygge can be seen as fads. But perhaps they are signals that individuals are withdrawing from clutter in search of simplicity; those individuals will use intelligent agents to filter away the noise of the day.”

As customers seek protection from poorly targeted ads and other noise, they will opt out of marketing permissions and also take huge dollars with them. Forrester estimates that if just 1% of the US population “cocoon themselves from the noise” their lost spend would total $24 billion.  We showed one of our clients that autoGraph’s AI decisioning enabled personalization that saved them 12% of their customer marketing permissions while delivering the same amount of revenue (redemptions) as their analytical segmentation.

Using AI to Provide Refuge from the Noise

The great news is that AI—when done well—can provide the decisioning power to create a real sense of personalization, enabling marketing to create digital content experiences finely tuned to customer needs.  Your content becomes a refuge from the storm of digital noise and provides lasting brand affinity and customer value.

“What consumers truly value, however, can be difficult to pin down and psychologically complicated,” a trio of Bain & Co. analysts wrote in an article first published in the Harvard Business Review. “Yet universal building blocks of value do exist, creating opportunities for companies to improve their performance in current markets or break into new ones. A rigorous model of consumer value allows a company to come up with new combinations of value that its products and services could deliver.”

The article notes: “The right combinations, our analysis shows, pay off in stronger customer loyalty, greater consumer willingness to try a particular brand, and sustained revenue growth.”

This is why autoGraph enables customer-controlled profiling so that we can understand more than demographics but aspirations, interests and brand affinities.  We look at where the individual customer wants to be going, not where they have been because of their search or transaction history.  At Vodafone UK, using autoGraph for customer-controlled profiles, permissions and decisioning (personalization) achieved a 2x increase in digital marketing revenues.

Perfect Storm is Coming

As noted earlier, things are getting noisy. People are turning off and opting out of marketing communications. It will become easier for your customers to tune you out with the advent of General Data Protection Regulation (GDPR) in the European Union, the Personal Information Protection and Electronic Documents Act (PIPEDA) in Canada, and similar privacy movements within the United States.

Third party cookies and browsing histories are also being curbed by Apple which will make first-party permissions even more valuable.  Our view is that this is an opportunity for mobile network operators to turn their first-party relationship and large customer base into new revenue by deploying autoGraph and taking a piece of the digital advertising market.  We’ve proven this model with one of our US mobile operator clients and generated results of 3x increase in ad revenue.

2018 is the Year of Reckoning according to Forrester.  Will you be aggressive in your use of AI powered decisioning?  Will you keep your customers in conversation with your brand?

There is a $24 billion market to play for.