The quickest way to get to the critical stuff – here is what’s happening in this week’s TheCustomer QT: AI gets some spotlight and some shade, loyalty liability is looking scary, what consumers don’t know about their data is even scarier, and get ready for the huge shift in search.
Happy skimming!
AI/ ML
Ethical AI Is Our Responsibility
Quick-Take: According to a 2019 survey on ethics in AI, Capgemini found 62% of consumers said they would trust brands more if they perceived their AI interactions as ethical. However, as many as 47% of them responded they’d encountered at least two incidents in the last 2-3 years of AI creating ethically questionable outcomes. Executives shared this sentiment, with 90% believing ethical issues arose from the use of AI systems.
4 of the worst ways to use AI
Quick-Take: All too often AI is not the shining light to a bright company future but rather the blind leading the blind down the wrong path, until someone falls off a cliff. Many of those most responsible for hype in the world of artificial intelligence have never written a line of code, let alone deployed AI in production. Even few developers have the incentive to give you a dose of reality.
LOYALTY
Unused Miles Creating Exponential Liability
Quick-Take: In 2020, customers of five key airline loyalty programs earned about half the miles they did the year before, while only redeeming about one-tenth of the miles they had earned. The U.S.’ five most valuable airline loyalty programs — Delta Air Lines’ SkyMiles, American Airlines’ AAdvantage, United Airlines’ MileagePlus, Southwest Airlines’ Rapid Rewards and JetBlue’s TrueBlue — ended 2020 with a combined $27.5 billion in rewards program liabilities, according to a new ValuePenguin study that examined annual filings. Consumers traveled much less in 2020 due to the coronavirus pandemic, while many rewards programs paused miles or points expirations. Because airlines generally keep outstanding miles as liabilities on their balance sheets, this led to liabilities across the five programs spiking 11.6% from the year prior.
Research reveals that Gen Z is the most loyal generation
Quick-Take: The results revealed that 48 percent of customers remained loyal to the brands whose loyalty programs they are members of. But an even greater number (more than 60 percent) of the Gen Z population stays with their loyalty program. Report author and CEO of The Point of Loyalty, Adam Posner said: “The research revealed that loyalty programs do influence brand loyalty while COVID-19 prevails. Interestingly, Gen Z identified as the most loyal generational cohort to a brand whose loyalty program they are a member of.The research also shows that 87 percent of consumers tended to remain with brands they knew during the height of the pandemic in 2020, with 92 percent of Baby Boomers remaining with brands they knew.
What the New (Luxury) Customer Loyalty Looks Like
Quick-Take: In a digitised world, brands recognise they need to step up. “You need a minimum of first-party data to know who all your clients are, and you’ll need to nurture a relationship with them whether it’s through content, services or surprises. That is going to become almost compulsory,” says Vigneaux. “When you think of Airbnb or Uber, they’ve not just sold a product but a caring journey. Luxury can learn to do the same. It’s not enough to keep on selling expensive handbags and shoes.”
DATA & PRIVACY
Your Data for Profits: How Much Do People Know?
Quick-Take: It surprised us to see how many people are still unaware that companies profit off of data, and that men were more aware than women, but it is not at all surprising that a solid majority want their data to be private. In order to change how data is handled, more people need to be educated on how their data is gathered and used. This will allow for a transition where people can make choices about who has their data and also begin to profit directly from their data. With nearly ¾ of people wanting control over their data, companies will find a way to make this happen and move to a model of consumer-consented data.
Vizio’s Ad Revenue Gains Signal Growth of New Smart TV Ecosystem
Quick-Take: While Vizio’s device business grew revenue by 47%, its advertising and data arm, called Platform+, saw gross profit more than double while revenues rose a whopping 120%. Vizio made $38.4 million from its Platform+ business in the Q1, vs. $48.2 million from devices. It’s not hard to imagine a not-so-distant quarter in which most of the company’s money comes from selling ads. Fueling that revenue boost is a 70% increase in time viewers spent with the platform, along with a 57% increase in the number of actual accounts, which now stands at 13.4 million.
TRENDS
Pleasing shoppers who want it all
Quick-Take: Recent research shows BOPIS and curbside pickup adoption has increased for 78% of shoppers since COVID-19’s onset, and 69% expect to continue using these favorite darlings. And why not? Shoppers strapped for time or concerned for their safety can order goods from home and easily pick them up from the parking lot, never having to leave their car. BOPIS and curbside options enable customers to see products before purchasing, avoid shipping costs and return items when they don’t work out — the top reasons cited for choosing this route. However, while these methods have certainly gained in popularity this past year, nearly half (46%) of consumers surveyed in Raydiant’s State of Consumer Behavior 2021 report that, when given the choice, they prefer in-person rather than online shopping.
SEARCH
Google Researchers Rethink Search
Quick-Take: Classic information retrieval systems do not answer questions directly, write the
authors of a paper published earlier this month. They instead provide references to answers, hopefully authoritative. They typically contain pieces of the answer, not the complete answer. Google researchers suggest in a paper that they can make the internet more searchable and the results more accurate through big language models made from machine-learning algorithms that could replace today’s system of index, retrieve, and rank.
CX
Personalizing Content Tops the List for Improving CX
Quick-Take: Personalization pays off in multiple ways: 45% of marketers say personalizing the content shared with customers is the best way to enhance customer experiences (CX), and 93% of organizations with an advanced personalization strategy experienced revenue growth in 2018.
A Powerful Use Case For ML in CX
Quick-Take: A whopping 68% of customers attrite because of the indifferent attitude of customer care toward what they believe is a legitimate issue. And it is much more expensive to win new customers than to do more business (upsell/cross-sell) with the existing ones by delighting them. To grow revenues, retaining existing customers, especially the premium ones, is vital.
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Photo by SwapnIl Dwivedi on Unsplash.
