By Shirli Zelcer, global head of analytics and technology at Merkle
In Merkle’s recent research report “Engagement to Empowerment: Winning in Today’s Experience Economy,” we discovered that a significant 60% of brands have invested in or are in the process of investing in AI-driven customer experience solutions. Chatbots, generative AI, and predictive analytics are among the most popular solutions; more than 70% of business leaders have already implemented or are actively testing them.
For the report, we surveyed 2,100 consumers and 800 brand professionals across the globe on their perceptions and utilization of AI and other emerging technology. The sheer magnitude of applications for AI can be hard to comprehend, let alone evaluate. It can be tempting for brands to try and jump on every new technology or AI solution, which can dilute the benefits they have on the customer experience. Because of this, we asked consumers which solutions are most impactful on their brand experiences, how they felt about giving their personal data over to brands, and what concerns they had around AI, if any. The results were surprising, and in some cases, at odds with brand activity.
Consumers Embrace Data-Driven Marketing, With Caveats
For many years now, marketers have leveraged customer data to inform advertising, analytics, identity, and recommendation engines, among myriad other applications. And true to that history, AI, especially in its modern, generative iterations, needs data as its primary fuel.
Consumers are mostly cognizant of the fact that marketers want their data, and we found that they trust (48%) or feel neutral about (28%) companies collecting and using it. But a not-insubstantial 24% of consumers are skeptical about brands’ use of their data. They are less sure that brands are using their data to improve their experiences. Only 38% of consumers think that companies are interested in using their personal data for the customer’s benefit.
Because it’s exceedingly difficult to win back lost customers, brands must hold up their end of the data value exchange while they are on good terms with them. This means keeping consumer data up to date, being transparent about its use, and ensuring it betters the overall experience.
Security and Surveillance are Top Consumer Concerns with AI
The excitement around AI has been met with extreme caution. There’s good reason for this, and brands need to heed consumers’ concerns.
Merkle’s survey found that “data protection and privacy” and “whether AI could be hacked to cause harm” were the top two concerns of consumers (each at 79%). We grouped these two options into the overall category of security. These concerns over indexed for older consumers (55+ years).
“Whether the technology is recording you,” and “whether the technology is tracking you” were also prominent concerns at 76% and 73%, respectively. We grouped these choices into the category of surveillance. These concerns over indexed for consumers aged 18-34.
It’s imperative for brands to implement ethical guardrails to their AI use to prevent unintended bias or harm. At Merkle, we call this “ethical AI,” or the practice of establishing guidelines and practices to ensure AI is used in a way that respects fundamental values.
Not All Emerging Tech is Created Equal
Merkle found that leading customer experience brands (as gauged by CX maturity, customer retention and acquisition, and other CX-related activity) are planning to invest in an average of 9.8 new technologies in the next three years. They currently use an average of 13 technologies, including AI, machine learning, loyalty programs, chatbots, and virtual assistants.
The survey asked consumers how often they interact with popular emerging tech and its impact on their experiences. Some of the technologies they found most impactful were, curiously, some of the least encountered by consumers, including smart devices, voice commerce, natural language processing (NPL) platforms, and augmented and virtual reality. These preferences differed across categories, of course, but they’re worth brands’ attention.
On the flipside, frequently experienced but less impactful tech included self-service checkout and personalized emails and/or messages. It’s important to note that these innovations may have room to improve as they process more (and better) data.
It’s easy to lose sight of the customer when presented with the promise of data-driven tech innovation. And in a customer-first marketing landscape, this is counterproductive, for the tech is only as good as its ability to positively impact a person’s experience. Any new tech strategy, testing, and implementation must be underpinned by an unwavering focus on what the customer needs.
We explore these themes and more in our research, available for download here.