Today’s consumer exhibits little patience with retailers that don’t understand them on a deep, personal level. Data-driven AI is part of the remedy for this challenge, but even the best AI tools need support from human intuition to drive truly powerful marketing efforts, according to Amy Heidersbach, Chief Marketing Officer at Persado. Heidersbach spoke during Coresight Research’s AI-Powered Language: A New Era of Enhanced Customer Engagement webinar.
“I actually think we’ve done ourselves a disservice by leaning on technology,” said Heidersbach. “By ‘we’ I mean people working inside of brands that want to, and truly have, the customer’s interest at heart, but are too easily accepting the A/B test results without really thinking them through. Humans and machines need to be working together inside of these brands. We have to be curious. We have to realize that just because hot tubs are spiking in terms of sales across our network, that doesn’t mean everyone in our customer base should be getting a hot tub offer.”
AI-powered insights are most useful when they are treated almost like another person’s advice — the input is welcomed but is discussed and debated rather than being treated as the absolute truth. Technology-driven inputs aren’t an automatic solution to driving engagement, even if they are still vital in laying the groundwork for future success.
“I think we’re starting to adopt machines as team members who have superpowers that are different but complementary to the ones that we have as human marketers,” said Heidersbach. This combination of data-driven insights and human intuition enables organizations to “think differently about the trillions of messages that we receive as consumers every month,” she added. “We all know the horrible declining engagement rates from email — since 2013 there’s been a 75% decline in email engagement rates. We’re not going to just concede that the declining engagement rates win. We’re able to rethink, with the power of machines, how we can take control again.”
Brands Need to Understand Shoppers on a Deeper Level
The key to getting the most out of AI-powered insights is for the human minds to figure out how this data can be relevant, which may not be apparent, or even seemingly logical, at first glance.. For example, Heidersbach noted that she has received ads for diapers despite not being a parent herself, likely because her shopping habits have been shaped by her role as a godparent. Filtering the data to more accurately target only people with children is one possible solution to this problem, but a stronger (if trickier) approach is getting a better understanding of why a non-parent might be buying items for children, and combining that knowledge with other relevant information to deliver a truly relevant message.
Retailers that can understand and connect with their customers on these more personal levels get a great chance to realign potential mistargets into new opportunities.
“If the brands that I love really know who I am — that I care about sustainability, that I care about buying toys that aren’t made of plastic and incredibly disposable for the kids that I love in my life — now we have an interesting conversation and an interesting relationship,” said Heidersbach.
Retailers also need to understand how shoppers’ preferences vary by channel as well as by different demographics or buying habits. Old Navy used to work under the assumption that online and in-store customers were essentially equally motivated by the same kinds of offers, such as one-day only sales or buy one, get one free promotions. However, when the retailer made a deeper dive into customer behavior it found that this wasn’t the case, and the company made the necessary adjustments to improve future messaging.
“Retailers have to really get curious about what is going to motivate these now primarily digital or online consumers, because our old thinking — that an offer in one channel is as effective as that offer in another channel — is broken,” said Heidersbach. “They’re really able to get specific about, and understand why consumers are behaving the way they do not only as different segments, but in different channels.”
Why First-Party Data is so Important for Truly Understanding Shoppers
Technology advances are giving more and more brands the ability to understand user preferences down to the level of the individual, even with just a small team handling a vast array of data. Targeting capabilities are getting better (alongside shoppers demanding more relevant promotions and ads), but retailers are still contending with the fact that ads that seem overly specific can come across as “creepy” to some consumers.
The best solution to this challenge is utilizing first-party data over third-party data as much as possible. A retailer’s own direct insights into shoppers’ behavior can be more reliable than those that outside data can provide, in large part because this information is based on things customers expect their favorite companies to know. These insights, combined with human intuition, can create messaging that feels natural, relevant and convenient to shoppers rather than unwelcome.
“Once we have first-party data in place, our job becomes, how do we activate that data in more meaningful, personalized ways to unlock growth opportunities inside of our business?” said Heidersbach. “More importantly, how do we create the insights and the connection with customers, and the engagement that’s more authentic and relevant to them?”