CHAPTER 5

Overview

The previous chapters provided a broad overview of AI, some key definitions, caveats and why AI will play an important role in the future. This chapter will begin our journey into understanding how AI can help in brand building.

Using AI to Identify and Get Insights About Customers

People tend to put on a façade when they post their profiles on dating apps. With posturing and grandstanding becoming the order of the day, the focus on these sites swung toward accumulating “swipe rights.” With the category attracting newer players regularly, this behavior soon became the norm with everyone intent on presenting a perfect picture of themselves and choosing to hide their vulnerabilities. Departing from this norm, the dating app Hinge used AI to identify consumer insights and soon found that an extremely high number—over 80 percent—of their user base hadn’t managed to find a long-term relationship on any swiping app, ever. A bitter truth that no user on the app would openly admit to. Based on this insight, Hinge developed a remarkable campaign titled “Let’s be real,” and encouraged users to share their vulnerabilities on the app to find a better, long-term match for themselves. This connected deeply with the true desires of consumers and resulted in a 4x increase in Hinge’s user base. This highlights how AI-driven consumer insights can be a game changer for brands enabling them to improvise on their product delivery and design relevant communication to touch the right chords in the consumers’ hearts.

I trust that at the end of the previous chapter your interest in the possibilities of AI has turned from a general sense of curiosity into excitement at the likelihood of finding applications for it in your enterprise, work or field of study. Hopefully, your mind is whirring with ideas on how you could put AI to use and tackle challenging issues that have been eating up endless amounts of your time, frustrating you and your colleagues and preventing you from rising above mundane issues to apply your mind to larger strategic matters that you are experienced, trained and qualified to do.

Indeed, it is a shame that so many professionals spend considerable amount of their valuable time in tackling the same set of issues on a daily basis, repeatedly, throughout their careers. There is of course, a downside to this. First, it is a waste of talent. Professionals are skilled, trained and capable of solving diverse sets of issues, be it opportunities or problems. While we may seem daunted initially by seemingly gargantuan tasks, most professional teams inevitably rise to such challenges and find a suitable method or solution, to solve the challenge.

Many organizations have developed processes and techniques to tackle opportunities and challenges, as they emerge. Management literature is replete with stellar examples of organizations and teams using time-tested or out-of-the-box processes to solve matters and grow their organizations rapidly. At other times, teams break out of the stifling and rigid shackles of processes and use common sense to come up with clutter-breaking ideas that are the solution for their growth. In India, we have a term for this. We call it Jugaad. To understand what jugaad is, let’s first understand what an organization problem is!

An organization problem, in simple language, is the occurrence of a situation that is unexpected and that has the potential to disrupt the smooth functioning of operations. Sometimes it is compounded by the realization that the organization is ill-equipped or lacks adequate information to solve it. In a typical professional environment, when a problem occurs, the process assigned to handle problems simply takes over. All professional organizations usually have Standard Operating Procedures (SOPs) in place to handle such issues. However, when problems go beyond the realm of past experience and established processes, that is when human creativity, resourcefulness and teamwork comes into play. Solution themes that follow an acceptable path are called procedures or techniques, if problem-solving methods are put in play. But in some cases, solutions require more than process and technique to solve problems. In such circumstances, new theories are invented and tested before being put into production. This is product or process innovation leading to the creation of something new and never created before.

Jugaad is innovation too, but of a different kind. It is the ability to solve problems by creatively piecing together a workable solution with whatever components are readily available at hand. If you search the web for the term jugaad you will find a number of examples of common Indians using jugaad in everyday life. From using a trouser to split the air of an air cooler to cool two rooms simultaneously, to running a water pump using a motorcycle, the cases of jugaad are both inspiring as well as entertaining. But there are many genuine cases of entrepreneurs using jugaad to solve practical problems and create thriving businesses.

For example, a company called Husk Powered Systems today provides power to over 25,000 homes in India by creating energy from discarded rice husk. This not just empowers thousands of rural families but is also an environmentally friendly method of power generation.

The point I’m trying to make through this is that humans and professionals thrive when faced with opportunities and problems because that is when they’re at their creative best. The most stymieing experience for professional managers is having to do the same job over and over again, repeatedly. This not only sucks away the spark of enthusiasm and creativity from managers and entrepreneurs, but after a certain point, it dulls them into a sense of nonchalance. The most harmful effect of such work is to reduce the once sharp and enterprising professionals into unimaginative cookie cutters.

AI can take away the dulling repetitive tasks allowing managers and entrepreneurs the freedom to tackle real-world issues. Implementation of AI should only help spur improvement and forge professionals into competent and enterprising managers buzzing with ideas and innovation!

While the possibilities of AI sound exciting, the pragmatic reader could be keen to know how they could implement AI in their organizations.

There are two ways you can implement AI within your organization. The first is to build your own AI system. This begins with identifying an appropriate area or function within your organization. If you recall, the key tenet for creating a successful AI project is data. Select a field or function that has access to diverse quality data. You then need to define your problem or opportunity statement that the AI will solve and set your objectives accordingly. On completing this step, resource and talent requirements will become evident. First put together a cross-functional team qualified to perform the task. Next provide the required resources to achieve the objectives. Finally set goals and timelines that are achievable. Monitor regularly and course correct depending on progress.

This is the starting point for you to build a future-focused AI-driven organization.

But what if you lack the resources?

The other option is to use ready-to-use readily available online AI tools and apply it to your problem or opportunity statement.

Our objective is to use AI for brand value creation, hence let me explain to you how AI applications can be used in your brand-building efforts.

To begin with, the core of any brand is the customer. Without the customer, there is no need and so there is no brand. One of the fundamental reasons why brands fail is because they fail to identify their customers correctly. Their customer segmentation is either too broad or too narrow or in some cases, not defined at all.

Don’t be surprised to hear this. In my career, I have often been greeted with blank stares to my question, “Who is your customer?” Brands and organizations are so caught up with their product that they fail to understand that the product is only relevant if it solves a consumer need, irrespective of how beautiful, multifeatured or futuristic it may look, sound or behave. Of what relevance is a product, if all it evokes is a round of applause but leaves the cash register silent?

On further probing, by asking for a definition of the individual who could require such a product, I have been often told, “Oh! Anybody is my customer because everyone needs this product.”

This answer is reminiscent of the Calvin and Hobbes cartoon strip, in which Calvin’s stall provides “A swift kick in the butt” for a dollar. Unsurprisingly, there aren’t any takers, but when Hobbes wonders why, Calvin replies, “I don’t understand. Everyone I know needs it!”

Business history is replete with such instances. In India, a successful consumer durable company spent huge money to launch the world’s first “vacuumizer.” According to the company, Indians had a habit of stocking up on snacking items called farsan. These were like crisps and fritters that are a staple accompaniment served with tea in India. Indians being a thrifty lot, prefer buying these snacks or making them at home, in large quantities to lower costs.

With time, these snacks tend to lose their crispness, flavor and taste in storage, which is a cause for dissatisfaction among customers. This loss of crispness was attributed to the presence of air in the containers that stored the farsan. Believing that they had struck on a very important insight, the company invested all their resources in developing and engineering a unique product, “the vacuumizer.” The product “vacuumizer” was a set of plastic containers that came along with a vacuum pump. The farsan bought in bulk could be stored in these containers, which would then be rendered “air-free” through the use of the vacuumizer pump that would remove all air in the closed containers. Each time a housewife opened the container to remove farsan, all she had to do was to shut the container and use the pump to eject out the trapped air. In this manner, the company argued, precious farsan would remain fresh for weeks together.

The media launch was no less spectacular. The company bought a media blackout all over the country on the day of their launch, a remarkable feat in terms of media innovation at the time. They took advertising spots on all the major television channels at the same time slot to launch this unique concept. This was followed through with a barrage of communication, cutting across every type of media vehicle. Unfortunately, despite their best efforts, the housewife was unimpressed by the vacuumizer. The product sank like a cement block, taking the company with it.

The company was so much in awe of their product, that they had believed “Every home needed it!” The reality was that while housewives regretted having to serve stale farsan, they saw no point in paying a huge sum—the equivalent of a television set—for a device that kept farsan fresh. The pragmatic housewives, saw better value in making or buying less quantity of farsan periodically than having to invest in an expensive machine only to pump air out of it every day.

So, knowing your customer well and identifying the right insight, is pivotal to your brand strategy.

Today, a lot of purchase and evaluation happens online. Customers search, compare, evaluate, read up on products and then check out available offers before making a purchase.

Convenience rules the world now. The earlier view that customers need to touch, feel and experience a product before purchase is now passe. Consumers happily buy expensive mobiles, laptops, televisions and even cars online. Even categories once considered personal, such as clothes, lingerie and jewelry are being purchased online. The COVID pandemic has only strengthened this trend further. During the lockdown as the world began adapting to norms of social distancing and operating from home, online portals and websites often became the lifeline for people in every part of the world, supplying a variety of goods, ranging from everyday essentials to lifestyle elements and consumer durables.

The internet also became the primary source of information and education. Now as the world limps back to normalcy, it remains the preferred destination because people have got used to its convenience, benefitting in more ways than they expected from it, thereby making it a habit.

All this has only fueled the growth and importance of AI. As mentioned earlier, the most critical factor for AI to be effective is the availability of data. The COVID pandemic has proved to be a major catalyst for driving people online. This has led to a boom of consumer activity on the internet with people from all over the world searching for everything from pharmaceutical products to entertainment options online, providing AI tools with a rich lode of data. Companies such as Google, Facebook, Amazon, Microsoft and many other large and small players who are AI driven, have received tremendous inputs, enriching their consumer knowledge and intelligence. This information is being used to create more effective and efficient business and consumer online interactions.

Consumer insights and behavior is the cornerstone of an effective brand-building strategy. Using the information available online, you can get to know your customer better. You can now understand how they begin their search process, what triggers their interests, where do they go to get more information, who are their influencers, what is the topic of conversation with friends and family, how do families decide, what sites do they visit, what’s their favorite food, destination, purchase intent for products, outlook to life and society, interests, social causes, entertainment preferences, and so on.

The list is endless, but useful for you to get a clear idea about the different kinds of audiences who show interest in your brand. This information will help you build a diverse execution plan that can be personalized for each target audience. Your website analytics data will tell you how consumers land on your site, how do they behave, what parts of your website is engaging, which parts do not hold their interest, what path the consumers use to purchase the product or service, the factors enabling sales and reasons to drop off.

All of this information is invaluable as you get to understand your customer better and understand their journey in acquiring your brand. This knowledge will enable you to fine-tune your offering and provide them with the right set of information and incentives to acquire your brand with minimum fuss.

These are some of the areas that AI-enabled consumer understanding tools can help you gather information about.

Trend Analysis

AI can help you understand the important consumer trends that are relevant and current. What seems to be the favorite holiday destination the coming summer? Which cuisine appears to be the hot favorite? What kind of clothes will trend? What seems to have caught people’s attention in home décor? What are the trending colors in cosmetics? A variety of categories and niches get covered by analyzing the humongous amounts of data and interactions that are happening online. These conversations are captured and from this data, trends can be spotted. The trends are further split and scrutinized to understand the inherent strength of each trend. For some trends could simply be fads that fizzle out after a short burst of interest. The purpose of sifting through all the options is to identify the trend that has the strongest potential and most affinity among consumers. These are the trends that a brand has to correctly identify and build strategies around.

Brands can also determine the potential of different trends and their variations by analyzing the strength of the consumer affinity for them. With this data, brands can plan for future variants taking a lead in their development to surprise their consumer with ideas just at the moment they’re taking root among consumers, almost like a coincidence. Tools such as Xineoh, Google Trends and Facebook Audience Insights are some that can be explored in this regard.

Sentiment Analysis

Having identified a trend, you may want to know more about the associations that consumers make with it and the related topics that the consumer could possibly be interested in. This analysis indicates the breadth and scope of a brand’s appeal. The wider the appeal the greater are the chances of the brand’s interaction with the category. For example, consumers in the market for a new home could be interested in understanding how well the locality is connected or about schooling options in and around the neighborhood. They could also be reading up about the air quality, safety and other aspects connected to living in the area. Now these reasons are rarely factored in the selling strategy of real-estate projects that essentially focus on size of the homes, amenities and facilities. But by understanding the sentiment of the customer, the brand can include these topics in their content strategy, thereby connecting better with potential customers. Often these aspects swing the customer decision in the favor of a brand when everything else is at par with competition.

Identifying the right sentiment demonstrates a deeper understanding of customer needs, which can then be worked into an advantage by providing the customer with the right information and service. Tools such as Chorus are some that can help in creating a richer more involved conversation with potential customers seeking a better interaction with brands. Then you have predictive tools such as Arimo that tracks shopper behavior online and predicts their purchase intent. This information is vital and brands can use it to customize their offering to the right audience at the right time.

Experience Analysis

Your customer is at the center of your brand-building effort. Today marketing and brand-building efforts are moving away from the generic to the specific. While earlier we would have a broad definition of the consumer based on demographic and psychographic parameters, in the digital world of today, we have the ability to get more granular insights into their behavior. Web-based analytical tools can paint an extremely detailed picture of your customer. Deploying and using these tools will enable you to get an exact picture of who your customer is, how your customer is behaving and what is working. Analytics can help you determine the following three key aspects:

Source: Answers all the key questions about what is the effectiveness of your current marketing and messaging campaigns: Where did the consumer reach your website from? Was it on a related site, blog, video? Which ad did the consumer click? What were the performance matrices of your ad network? What message seems to work? Which social media channels are working best for you? What search terms is the consumer using to reach you? Which category of e-mails seem to be generating the maximum impact? This information could be crucial in helping you focus on your future Search Engine Optimization (SEO), content, advertising and marketing strategy.

Profile: This will tell you exactly who your customers are. You can set aside all ambiguity because now you know the profile of the person. Or rather, profiles. Because the granularity of the information will start differentiating people for who they are. Get to know their age, gender, demographic, geography, preferences, tastes and more. Customers begin appearing like real, identifiable people, so you can understand their needs and the role your brand plays in their lives.

Usage: Perhaps the most important because this captures how the consumer interacted on the website. Heat maps and video tracking can provide an exact idea of how the consumer traversed the site, identifying spots they found engaging and where they spent time. Get to know their consideration parameters, triggers for purchase and locate parts where they left your site. The right objectives will help track the customer journey across a predetermined path and understand its effectiveness. Get to know the factors that ensured the achievement of objectives and the factors preventing them.

Beside Google Analytics, tools such as Leadfeeder will help you better your sales conversions. Live site visualization tools will help you better understand what people are looking for in your website.

Chatter Analysis

What are people saying about your brand, where are the conversations headed? Is there important information about your product or service that consumers have failed to pick up? Does your competition have features that consumers find irresistible? Are your customers feeling hurt about something your brand did or said? Where do you feature in your consumers’ world?

In the dynamic age we live in, consumer chatter often makes or breaks a brand. In India, a popular jewelry brand ran an advertisement featuring an interfaith marriage. Social media erupted as the ad polarized netizens, some speaking for and others against the ad. The brand pulled out the ad to assuage sentiments but somehow the topic did not fully die out. The online conversations continued increasing in bitterness, with numerous calls to boycott the brand. A few months later, when the brand launched another festival ad, it only rekindled the negative sentiments and many netizens took umbrage to the new ad, pointing out that it contained elements that hurt their cultural sentiments.

This highlights the long tail or persistent effect of content in the online world. The internet has a long memory and brands can no longer claim that they alone control the narrative around their brands. Tools such as NetBase and other text analyzing tools provide brands with the real picture of the conversations surrounding them, enabling them to devise communication that is relevant and connected with the prevalent consumer sentiment.

Interaction Analysis

How did your salesperson’s conversation with the customer go? Did your representative at the retail outlet paint the right picture? Are your e-mails effectively conveying the brand message? Did you respond well to customer queries?

In the past, there was no way to know the course of these interactions. There was little or no response mechanisms, limited learning and few avenues of follow through that could be planned. Feedback was what the rep wrote back and the only metrics for a diverse set of efforts was sales. If the sales were good, everything worked, if not, there was no way to identify where the problem lay. Leading to that famous quote by an advertiser, “Half the money I spend on advertising is wasted; Trouble is, I don’t know which half.”

Today AI has enabled a number of tools to provide brands with the ability to analyze these conversations. From telephone calls, to e-mails to chat messages and social media posts. You now have the ability to learn from all of these conversations. Fact is, the first person to tell you if your brand’s promise works or not, is your customer. Now you have the ability to analyze hundreds of thousands of customer conversations and better still, understand the issues or the problems that they are encountering. This information is available instantaneously and you can immediately take corrective action, making a huge difference to business operations.

Products such as Signal AI process thousands of customer conversations. These conversations can be compared with those from the past to identify areas of concern and build relevant solutions.

These are just some examples and a few possibilities that exist today for brands to get consumer insights from. There’s no area that can claim to be bereft of ready-to-use AI-enabled tools. For most sectors, there are tools abound to help you understand your customer better, track their behavior, analyze their actions, understand their interactions, follow up with conversations and take corrective action whenever required.

Today, a brand cannot hide behind market research and blame research techniques for failing to provide them with the right insight. Soon, no excuse will be acceptable for lack of information about how consumers interact, what they experience, why they fail to convert and what they’re talking about with others, because all of this is available or will soon be available in real time at your fingertips.

A supermarket chain in South Africa found an interesting correlation in their counter sales. Across all stores in the chain, sales of baby diapers seemed to increase proportionally with the sale of beer. Especially in the evenings. At first the company ignored this data, after all sale of baby diapers and milk was an understandable correlation, but baby diapers and beer? Impossible!

However, the persistence of the information raised their curiosity to give the matter a closer look. When they dug deeper, they realized that the sale of both products was indeed connected and why this was happening.

In most homes with a baby, it was usually in the evenings when mothers, checking their baby’s inventories for the night would realize that they were short of diapers. This was about the time when the menfolk would be settling down to watch their favorite sport on TV. On realizing the shortage, they would be promptly dispatched to the nearest store to get diapers for the baby. With the anticipation of an exciting match high on their minds, the men would inadvertently pick up a sixpack along with the diapers. An understanding of this behavior ensured that the store packed beer cans close to the diaper section, leading to a significant increase in beer sales.

Insights from AI aren’t just restricted to the online world. AI can help you understand how your consumer buys in every environment, including retail. Analysis of purchase data can throw up interesting and significant correlations between diverse sets of products, you never believed were connected. The truth is that our experience sometimes acts like blinkers, preventing us from seeing facts, even when they are laid out bare in front of us.

Most stores are aware of customers who purchased from them. The details of their purchase are available to track and correlate due to their purchase records. But what of the countless shoppers who walked out without purchasing anything? In most shops, a far larger number of people walk out without shopping. No store keeps any record of them or why these customers went out. Their walk into the store is indication of interest. How did they behave once they were in? What was the section that they visited? What products did they browse? How many of them tried on products? Why didn’t they buy what they tried on? Did they find the right fit? Color? Design? Were they looking for a bargain? Did they check the online store when they were shopping?

AI-enabled facial tracking can provide brands with answers to these questions by analyzing consumer behavior inside the store. It can collate a wide spectrum of information be it a single store or multilocation chain. It can provide you with correlations, indicate what customers found interesting and where they dropped off. It can highlight interest in fit, color and designs for brands to ingest and use in their next creation. It can also predict how customers will behave in the future and provide insights on smaller matters such as, whether too many changing rooms are good or bad and what small touches could improve the store experience.

Did the celebrity images on the walls make an impact? Are the aisles comfortable to move or do they cause irritation? What can be improved in the checkout stage? How many frustrated customers simply set aside their selection and left? Can customers get instant recommendations inside the store similar to online portals?

There’s no end to the kind of change that AI can bring to any kind of business. AI can predict the consumers who will return for purchase and why others won’t. This can help brands tailor-make strategies for different sets of customers and begin conversations with them.

Indeed, the pandemic has caused a shift in consumer behavior and purchase habits. But while a lot of this will continue, there’s no reason to believe that customers won’t return to physical stores or that brick-and-mortar retail is dead. Humans are essentially social creatures and also resilient. Humanity will prevail and humans will learn to adapt to such scenarios in the future. Companies and brands must also learn to adapt to the evolving consumer too. Adapting with changing times is the best way to survive. One only needs to examine the category of tablet phones. People said tablets would kill laptops or phones or desktops, but that didn’t happen. All of them continue to coexist and each has found its own niche. Retail will too, as long as you use information to evolve and keep your customer engaged.

Chapter Summary