Artificial intelligence is gaining a lot of popularity recently provided the success it has seen in the wide range of fields it has been applied to, ranging from simple chatbots to complex diagnostics. Though AI is mostly associated with scientific subjects, Marketing industry has also been touched by its numerous benefits and brought positive changes to the marketing landscape.
What is AI?
Artificial intelligence (AI), is intelligence demonstrated by machines, unlike the natural intelligence displayed by humans and animals. By definition AI is the field of the study of “intelligent agents”: any device that perceives its environment and takes actions that maximize its chance of successfully achieving its goals. Simply put “artificial intelligence” is often used to describe machines (or computers) that mimic “cognitive” functions that humans associate with the human mind, such as “learning” and “problem solving”.
As machines have become increasingly capable, tasks considered to require “intelligence” are often removed from the definition of AI, a phenomenon known as the AI effect. Modern machine capabilities generally classified as AI include successfully understanding human speech, competing at the highest level in strategic game systems such as chess, autonomously operating cars, intelligent routing in content delivery networks, etc.
Why use AI for Marketing?
We have already been using computer programs to automate regular work and generate data for extracting various reports to aid in decision making. Artificial intelligence (AI) is the ability of a computer to do tasks that are usually done by humans because they require some degree of human intelligence and discernment. This allows us to let the AI generate those reports for us and do a lot more with the data provided and gets better over time as we will see in this article.
There are plenty of marketing tools available in the market that provide in-depth insights to marketers. Marketing know-how also helps companies to reorganise the internal structure, a competitive edge in their industry.
Though the AI driven tools can be useful for both Digital and traditional marketing channels, their benefits are more prominent in Digital marketing, which is currently the preferred marketing platform because it allows businesses to interact with their customers in real-time and in an engaging manner.
What tools are most useful?
- Deriving Reports
We spend significant number of hours collecting data, sorting them and performing various calculations in order to derive some meaningful reports out of it, which helps us in making crucial marketing decisions such as which product line has shown a rise or dip in a certain region or more complex scenarios such as effect of a certain scheme on a selected demographic, etc. Such data can help us sketch future plans and make informed decisions on challenges we are facing in the business.
- Propensity Modeling
Propensity model is a statistical scorecard that is used to predict the behaviour of your customer or prospect base. Propensity models are often used to identify those most likely to respond to an offer, or to focus retention activity on those most likely to churn. Using this scorecard the marketing department can scheme various offers for a product line since they have a better understanding of the customer behaviour patterns and this can prove to be a significant advantage.
- Grouping Consumers
AI constantly keeps track of consumer behaviour and based on the dataset it acquires it segregates consumers into various groups based on the pattern you query. Dynamic segmentation with the help of AI allows an organisation to analyse behaviour based on changing preferences of consumers.
- Sales Forecasting
Uncertainty is a major element of any business practice and with uncertainty comes greater risk. Risk can be minimized to a certain degree when you could make informed decisions and plan ahead. AI can analyze years of historical data on economic trends and customer behaviour and make predictions on future sales prospects.
- Product Recommendations
This is one of the widely used AI tools on almost all websites today, the AI based on the particular customer profile and analysis of similar profiles recommends products and services automatically to the visitor, this increases the chances of sales prominently. We have all come across the line “customers who purchased this also purchased this” followed by a list of recommended related products. This is a very powerful upsell technique and often yields sales which most consumers hadn’t really planned to purchase before.
- Dynamic pricing
Price of a product is the most important factor in making purchase decisions for most consumers. Sales models are often designed to bring in maximum consumers to hike sales of a product, though the number of sales here increases but there is often a considerable impact on the profit margin. Sure the lowered price tag can spark interest in the product who would not have considered purchasing the product before and thus creating sales opportunity however you are losing on the margin from consumers who would have paid the full price anyway.
Dynamic pricing tools aim to study the consumers and try to predict at which price point the consumer is more likely to complete the purchase. The bigger offers are reserved for people who may not have been interested in the product before and offering the regular price to the consumers who would potentially pay the whole price, thus helping in increasing the profits on the same number of units sold.
- Prospect Ranking
Marketers often have to go through thousands of potential leads everyday in order to bring in consumers. This sometimes compromises on the effort the agent applies to each lead and sometimes may put in too much effort on leads which are unlikely to turn and undermine a potentially good lead. This impacts the conversion rate and reduces the overall camping performance.
AI tools can help analyze each lead based on certain specified criteria and ranks those leads accordingly to help determine the potential of each lead. This can help in deciding how much effort each lead is worth and even predict what kind of offers are likely to assist in the closure of the potential sale.
- Ad Targeting
Displaying ads to specific target groups is one of the greater benefits of digital marketing over the traditional approach, this helps in reducing the overall cost and has a higher conversion rate. AI is great at categorizing consumers into various groups based on their historic behaviour and current interests and search patterns, AI then strategically displays ads that are most relevant to the consumers by targeting various groups matching the criteria for a given ad.
- Predictive Sales
It is easier to sell to existing customers or someone who have used the product or service before compared to bringing in new consumers. By keeping track of such group’s interests and recent purchases AI can predict their next product hunt and automatically suggest products and offers that are likely to generate a sale.
- Social Media Analysis
Social media platforms are an excellent platform to gather data for an organization such as visits on a particular brand on each platform can help in formulating plans that focus on increasing interest in the given brand on a specific platform. It can also gather data such as comments and feedback of users on products so as to determine the customer satisfaction and make amends on the product based on the feedback gathered.
AI is one of the fast growing segments currently and A quip in Tesler’s Theorem says “AI is whatever hasn’t been done yet.” It’s just unpredictably how many more benefits the artificial intelligence can bring to the marketing industry and considering how dynamic the marketing industry is, it is worthwhile to keep track of the strides AI makes and the various tools it can offer to keep you on the top of the game.