August 04, 2021
Although intelligent agents have been extensively reported on in both the specialized media and mass media, the communication and marketing areas of most brands do not yet use them widely. Some brands make use of smart agents or assistants in their customer service and relations with consumers, but this is still in its early days.
We believe that this technology will soon be predominant, not only in relations between customers and companies but also in the transformation of products into new services for consumers.
The way that artificial intelligence interacts with the so-called consumer experience is of critical importance to marketers. According to Cukier (2021), the core quality of AI is that it can exceed human capabilities, allowing radical improvements in products and services, thus improving the consumer experience, producing new and beneficial experiences for customers. Thus, we need to understand that the main characteristic of AI is that it is not something you can buy directly; it is an “intermediate good,” in economic parlance. Like electricity or microprocessors, it powers something, but it is not the thing itself. This new technology will perform tasks better than a human being in terms of speed, scale and often accuracy – and therefore also cost.
For CMOs, this technology presents new challenges and opportunities for their brands. Certainly, all companies will be impacted by this transformation that is starting. It is essential to understand how this will work and take the best strategic advantage of this new reality.
One of the most obvious uses of AI at companies that we can observe is human-computer interaction through various interfaces, particularly chatbots or intelligent assistants, whether they are commanded by voice or text. The term “chatbot” is a combination of “chat” and “robot.” According to the Oxford English Dictionary, a chatbot is a program designed to stimulate conversations with human users, especially over the internet. However, what defines a chatbot is that it is a computer program designed to converse and interact with people using natural language, which may be written or spoken.
Around 2010, Twitter was flooded by bots, which started to follow people, make posts and forward messages produced by other bots or written by human users. They were bots that exclusively produced texts. Shortly after that, Apple’s Siri provided interaction with cellphones through speech, and it soon proved a hit. The following year, Rollo Carpenter launched Cleverbot, the first artificial intelligence program to pass the modified Turing test, which means surveying people to tell if they can identify whether it is a person or a machine that is interacting with them (Rapp et al. 2021). In the same year, IBM’s Watson won Jeopardy, an American TV show. Two years later, WeChat was launched in China. Until we reached this moment of greater popularity, a long time elapsed, dating back to the first efforts to produce a conversational software program, such as Eliza (1966), Parry (1971) and Alice (2009).
We have seen an evolution from text-based to speech-based systems, which try to recognize demands through sound, offering satisfactory answers through speech as well. In this area, smart personal assistants that communicate by voice have become popular in recent years, as major technology players have designed them, such as Siri (Apple, 2011), Cortana (Microsoft, 2014), Alexa (Amazon, 2014) and Google Assistant (Google, 2018).
There will be an estimated 640 million smart speakers in use by 2024. The biggest consumer market is now China, which experienced 16% growth last year, while other markets expanded 3%. Another major trend is voice commerce or v-commerce. According to Gartner, in 2020, around 30% of all web browsing was done without a screen, only using voice commands. Also, according to ComScore, 50% of searches in search engines will soon be carried out using voice commands.
According to Rapp et al. (2021), we can put chatbot usage characteristics into four categories: a) task-oriented – built to help users perform a task or solve a problem (as usually happens in customer service); b) conversation-oriented – mainly aimed at maintaining a good quality of conversations with humans or establishing some form of relationship with them; c) oriented to both tasks and conversation; and d) undefined. Thus, through one or more of these categories, marketers must specify the use they want to make of their platform.
Regarding the domain of chatbots, there are a multitude of possibilities, such as customer service (help desks), health and well-being, e-commerce, education, chat, job interviews, recommendations, emotional and social support, work and productivity, search, human resources, arts, map orientation, online communities, charity, finance, safety critical environments, group discussion and many other areas.
This technology has induced a dramatic shift in customers’ experience, allowing communication between them and brands to rapidly increase. This ease of interaction grew with the emergence of social networks and well-known search engines, giving quick and accurate responses. This changed the behavior of consumers, who increasingly prefer autonomy in customer service and even self-service. They want answers and services anywhere, anytime, and usually without any form of interaction with brand representatives.
What are the benefits of chatbots for customers and businesses? There are three main positive aspects of chatbots: service extension, stress reduction and instant response. Previously, contacting a company took time and a lot of effort. A customer had to call the company or write an email and wait days or even weeks for a response. The introduction of chatbots can eliminate the pain of these tedious procedures involved in contacting companies.
This new behavior is changing the business landscape. Companies are answering questions and dealing with queries faster and trying to let their users handle their experience themselves through self-service, to provide improved customer service. Businesses are gearing up for easy, instant communication with their customers, facilitating purchases and other functions such as usage tips and questions. Messaging platforms have chat functions that engage customers and meet their needs, like ordering goods without delay.
As well as being available anytime and any day of the week and providing answers immediately, chatbots also offer the possibility of extending services when there is a link between a chatbot and other services provided by other companies. For example, a commercial airline’s chatbot can be connected to Taxify and Airbnb. Alexa is already connected to Airbnb, Uber, Amazon Music, Apple Music, Deezer, iHeartRadio, Pandora, SiriusXM, Spotify, Tidal, TuneIn and Vevo. Alexa is available directly on Amazon’s Echo devices and on many third-party devices such as speakers and TVs, as well as through the Alexa smartphone app. It is also available in some cars and some wearables. This is a great opportunity for some home appliance brands to take a big step and go from offering just physical products to becoming service providers for their customers. You can see the Ring Video Doorbell on your Echo Show, for example, and you can do the same with Arlo cameras. You can connect Alexa to your Philips Hue lamps and other ones, such as Ikea ones, to turn them on and off by voice, or connect to heating controls to check and change the temperature in your home.
This transformation of products into services or “servitization” (with apologies for this clumsy new term) is gaining traction (Cukier, K., 2021). It describes AI’s effect on many everyday consumer items, transforming them from standalone products into services, giving them “senses” and “intelligence” to make judgments. One example is maps. They used to be a paper product. However, due to digitization and AI, maps have become a service, showing users the most effective route, and updating it in real time based on traffic flows. In some cases, the business model shifts from a one-time sale to revenue from a recurring subscription. For example, a digital watch may become a fitness tracker or health monitor (Cukier, K., 2021).
Another relevant point is that as these agents learn from experience, they begin to understand the characteristics of their users and supply the company with data that will prove useful in the continuous development of new products and services. Obviously, issues such as privacy, ethics and legal compliance are crucial, to avoid exposing customers’ sensitive data. Customers only want chatbots to be well designed and efficient. They must be able to offer easy solutions to users’ demands. Chatbots may not necessarily have deep human conversations, but they must be able to accurately respond to questions and demands. It is essential to emphasize that the use of these intelligent agents implies a very intimate human-machine relationship and requires people to trust companies so that this relationship can become lasting.
Thus, it is fundamental for brands to be completely transparent in these relations, making it clear that conversations are being mediated through a machine, what data they are capturing and what they intend to do with it. Only by clearly and objectively providing information to customers will they come to trust in this new form of relationship.
The business landscape is changing very quickly to the point that it is hard for us to keep track of all these changes. Soon, all products will “do” things and not just “be” things.
Director of Communication and Marketing at Fundacão Getulio Vargas - FGV, Marcos Facó has more than 30 years of professional experience in the area of marketing focused on the education segment. He holds a Master's in Business Administration from FGV/EBAPE, an MBA in Marketing from PUC-RJ and a postgraduate degree in Civil Engineering from École Polytecnique Fédérale de Lausanne (Switzerland). He has taken executive courses in Marketing and Digital at Columbia University, Northwestern University, MIT and Harvard University. Currently, in addition to the management position at FGV, he is also a professor in the MBA courses in Digital Marketing at the institution and as a member of the Editorial Board of MIT Technology Review Brazil.
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