ASSIGNMENT- 1

OF
CONSUMER BEHAVIOUR

SUBMITTED TO : SUBMITTED BY:

MS. POOJA BHANDARI ANKITA THAKUR
CLASS – MBA 3(A)
ROLL NO : 201105

TOPIC :- USE OF INFORMATION TECHNOLOGY

AND ARTIFICIAL INTELLIGENCE(AI) IN
CONSUMER PROFILING AND ENGAGEMENT
INTRODUCTION
Artificial Intelligence (AI) has become an important aspect of the future.
This applies equally as well to Information Technology (IT) as it does many
other industries that rely on it. Just a decade ago, AI technology seemed
like something straight out of science fiction; today, we use it in everyday
life without realizing it – from intelligence research to facial recognition and
speech recognition to automation.

AI and Machine Learning (M.L.) have taken over the traditional computing
methods, changing how many industries perform and conduct their day-to-
day operations. From research and manufacturing to modernizing finance
and healthcare streams, leading AI has changed everything in a relatively
short amount of time.

AI and related technologies have had a positive impact on the way the IT
sector works. To put it simply, artificial intelligence is a branch of computer
science that looks to turning computers into intelligent machines that would,
otherwise, not be possible without direct human intervention. By making
use of computer-based training and advanced algorithms, AI and machine
learning can be used to create systems capable of mimicking human
behaviours, provide solutions to difficult and complicated problems, and
further develop simulations, aiming to become human-level AI.

Why AI is important to drive Customer Engagement?

According to a Hub spot definition, “Customer engagement is the

ongoing interactions between company and customer, offered by the
company, chosen by the customer.” This is a great definition because it
puts the focus on the customer’s choice.  
Today’s customer engagement exercises – customer profiling, target
marketing, lead scoring, technology interventions – help reach out to
potential customers in a way they don’t feel their privacy is being
violated. Customers also have the freedom to respond and to choose
how they want to interact with a business.

Infusing Artificial Intelligence (AI) into Customer Engagement

Recently at a tech marketing innovations platform, Jodie Sangster, Chief

Customer Officer, IBM Watson Customer Engagement (Asia Pacific) at
IBM said that today you cannot understand your customer without the
use of AI.

She couldn’t be more right. AI has helped organizations improve their

methods of customer engagement by being constantly “on”, collating
data from disparate sources, gauging them and coming up with
information that makes sense. Marketers and sellers across businesses
use these insights to engage customers more effectively.

According to a Gallup report, only one in four millennials (25%) are fully

engaged. The only positive exception to their low levels of psychological

and emotional attachment to a brand, product or company is that their
engagement is highly dependent on technology. Customers are in the
driver’s seat, and businesses that adopt omni-channel strategies
achieve 91% greater year-over-year customer retention rates compared
to business that don’t. AI can step in here to play a significant role to
convert the millennial population into loyalists by surpassing their digital
 experience expectations. This expectation can in no way be neglected
simply because when fully engaged, millennials are more profitable and
loyal than other customers.

How does Artificial Intelligence power Customer Engagement?

More than half of companies admit to not having a formal customer

engagement program in place, and 60% didn’t know how many
customers they’d lost over the past year. On the other hand, 75% of
consumers expect a consistent experience wherever they engage. Quite
a gap there that needs to be filled, and soon! Because Gartner’s got the
lowdown—by 2020, customers will manage 85% of their relationship with
the enterprise without interacting with a human. AI is the reason. Why?
Because…
1. It thinks “tomorrow” – The first step, and one of the most important, is
to not force customers into legacy that feels outdated and weighed
down. AI is a great technology that enables intelligent and informed, yet
simple customer experiences in an end-to-end customer journey. It helps
re-imagine each engagement opportunity and makes them unified and
personalized; an experience that would seem so organic that customers
would simply sail through them.
2. It uses data intelligently – There is so much data out there to process
and develop into insights; and AI achieves exactly that. It enables in-the-
moment engagement by simply filling in gaps and offering
comprehensive integration, giving marketers the power to personalize
real-time customer interactions.
3. It shakes up customer service – Fast, automated, hassle-free, AI gives
customer service a whole new personality. AI-powered Chatbots, which
are conversation agents, provide instant personalized responses, round
the clock; eliminating delays and errors, while using customer history to
ensure they get all the answers they are looking for. Virtual assistants
obey commands or answer questions, helping customers find what they
are looking for. These AI-powered tools are giving customer service a
great makeover.
4. It’s more human than human – That’s the thing about AI—it can add a
human touch to customer interaction even more than a real human can,
just by using data in a better way. In the digital world it is impossible to
gauge a customer’s mood or facial expressions. AI makes it possible to
pick up digital cues to customize interactions from raw data and
transforming them into actionable insights. With AI, customer
engagement is not about engaging with a device or a channel the
customer is using; but about engaging with the customer herself. This
makes the interactions warm and welcome; not mechanical and
intruding.

Be AI ready and make the best of it 

If you are marketing in a competitive space, then you need AI now. With
multiple digital platforms and channels, and an inundation of data, AI
must step in to simplify and make sense. If you are dealing with a data
deluge that your human team cannot handle, your business is already a
candidate for artificial intelligence.

It’s natural to get carried away with algorithms and metrics when
leveraging AI. But it’s critical that your AI implementation for customer
engagement be human-centric. This may not be completely possible in
the first few stages of implementation. However, when your AI-powered
customer engagement strategies begin to settle in, they must become
customer-empathetic to really be able to leverage the best that AI has to
offer.
Achieving a Single View of the Customer with AI

Lastly, on a concluding point one should be process-oriented. You

cannot leverage the predictions that analytics throws your way unless
you have a structure in place, which enables implementation to be
durable and effective. AI is not just for a couple of campaigns; but a
process that you need to incorporate in your customer engagement
blueprint for lasting results as well as increased ROI. When you have a
system that works in a seamless loop, you have better chances of
improving it each time.
Enabling Smart Customer Interactions

AI-driven customer service tools allow brands to understand their target

audiences better, especially when the interactions between the two are
studied in detail using data and analytics. The combination of Artificial
Intelligence, analytics, and Machine Learning can deliver insights that
can be leveraged to create highly personalized solutions and query
resolutions for each customer. Applying these insights proactively across
each stage of the customer lifecycle allows brands to engage and retain
customers more efficiently. Such a personalized approach to customer
service has the potential to delight customers and eventually turn them
into loyal customers.
Today, adopting AI-driven solutions across various departments like
sales, marketing, and customer relationship management is crucial for
brands to ensure effective, proactive engagement with their consumers.
AI-driven technologies using multiple data sources enable marketers to
map each stage of the customer journey and initiate meaningful
engagement opportunities with them. It allows businesses to identify
existing gaps in the customer experience, extract relevant insights, and
take the necessary efforts to retain customers, keep them engaged, and
increase their delight with each interaction with the brand.
IN WHAT WAYS IS AI BEING USED TO
ENHANCE CUSTOMER EXPERIENCE?
GIVE EXAMPLES.

We all know that artificial intelligence is playing a huge role in how

businesses operate. AI programs and services are helping transform
everything from data collection and processing in the marketing
department to on-boarding in the HR department. While AI and
automation hold tremendous value in terms of time and cost savings
internally, there is another area in which AI promises even bigger, more
meaningful returns: customer experience. As I’ve said many times
before, customer experience is the root of digital transformation. Every
tech decision we make should return to this core foundation. With
massive growth in data, comes opportunity to utilize the data for
machine learning and AI that can improve everyday experiences for
customers. It’s also important to note that good AI has to start with the
right data coupled with sound data science practice or the results can be
less than impressive.
So with that in mind, let’s take a look at the biggest ways AI is
transforming and enhancing the customer experience.

Since its inception, Artificial intelligence (AI) has grown by leaps and
bounds. From being used to merely collect data and predict outcomes, it is
now being used by companies as a primary technology to create cutting-
edge solutions across a range of services.

There has been a steady increase in the number ‘Robots’ that can mimic
cognitive functions of the human brain, such as problem-solving and
responding to natural languages. Powered by advanced Artificial
Intelligence (AI), these machines are now going mainstream. To catch up
with the technologically-driven business landscape, modern companies are
looking to leverage them into various productive roles, especially to handle
the customer queries. AI machines are fluently performing the customer
service roles such as a banking-assistant or a concierge in renowned five-
star hotels, and their journey from fiction to the fact now seems complete.
However, the main challenge faced by businesses is to make them appear
as customer-friendly as possible. Here are some of the ideal ways how
brands are using the AI machines to enhance their overall customer

experience.

Real-Time Interactions
The more customer-centric a business is, the higher is its potential to drive
conversions. By giving the business the opportunity to address their
consumer queries in real-time, AI can boost customer experience. For instance,
customers nowadays have turned increasingly impatient and usually take
to Social media to get their questions answered. Bolstered by AI, brands
can increase their social outreach and improve the mechanism to manage
the social presence, which can lead to increased engagement. Be it a new
promotional campaign or launching a new upgrade, AI can be used to
process real-time data, which can enable a brand to interact with its target
audience and also provide a spontaneous response. This capability to
respond instantaneously can increase consumer experience, which in turn
can enhance the brand’s reputations.

Managing Consumer’s Emotion

Modern brands are now employing AI programs that can recognize the
voices of their customers across a range of touch points. The voice
recognition systems can’t just forecast the emotional state of the customers
but can also respond to them appropriately. For instance, if a customer is
irate, the system can direct the representative to cajole the customer. The
rep can be instructed to offer additional benefits or discounts that can
prevent the customer from abandoning the business relationship with the
brand. This level of escalation-handling by the system can help the new
employees in handling angry customers and can manage the situations,
which can lead to positive customer experience.
Personalised Recommendations
The goal of the ongoing research in Artificial Intelligence is to incorporate
the advanced features like reasoning, communication, perception and the
capability to move and manipulate objects. When consumers can
communicate to these intelligent devices, the interactions would have
several different outcomes. Using the information collected from such
communications between their AI systems and customers, businesses can
personalize the experience for each customer. For example, a bank can
use the data to analyse the detailed perception of a customer and then can
use it to build personalized solutions like loans or credit cards around
his/her preferences. When promoted with right instance, the customers are
more likely to go for them and it can also help the bank to enhance its
customers’ experience.
Building Information Framework
Using AI, brands can build sophisticated information framework that is
much more structured. Social media is essentially used by customers either
to search for the products they need or to give a feedback on the offering
they have purchased. AI can be used to monitor these two main types of
buying-related actions to analyse customers’ behaviour. AI can take into
account various types of sentiments that drive the customers to these
actions and act accordingly. By leveraging these insights brands can build
deep customer profiles and match them to their social experience on
various channels.

Integrated Customer Experience

Brands can also utilize AI to interact with the customers across the physical
touch points. By integrating both the online and offline channels, brands
can add value to overall experiences of their customers. For instance,
some of the renowned brands in hospitality around the globe are using AI-
powered virtual host to cater their guests in several ways. Through this, the
luxury hotels are able to specifically identify what their guests want instead
of leaving it to their marketing team to guess it. Thus, AI has enabled the
hotel brands to ignore the conventional hospitality measurement
techniques such as customer satisfaction surveys and mystery shoppers as
they can now utilize the digital customer feedback directly. This is bound to
improve the gross customer experience and also give them the competitive
advantage.
Improving Personalization
Another important way AI is transforming the customer experience is by
providing personalized content. This is an era when we rarely need to
search for the products that would make our lives easier. It’s so easy now to
find a recommendation based on your past history. I’m talking
recommended videos and movies on YouTube and Netflix; recommended
music on Spotify; recommended TV shows on Hulu; recommended
concerts and performances on Bands in Town; and recommended products
on Amazon. AI is essentially putting “in the know” hipsters out of business
by bringing any and all content to the forefront. This is an age where
everyone knows everything relevant to their needs and wants. AI is also
finding its way into the cloud where companies are putting their data lakes
to glean faster insights from data and analytics. Azure and AWS , for
instance, both offer deep expertise in building applications around AI. This
enables companies to scale their AI capabilities quickly leveraging
capabilities and experience from the leaders in public cloud.
In addition to personalized recommendations, companies are also turning
to AI services to help develop personalized content. I’m much more likely to
buy from a company that has taken the time, or has a used a program, to
get to know me. I like when my marketing messages are targeted directly to
me. Yes there are some issues with privacy, but for the most part I’m
satisfied with what I’ve experienced.
Available 24/7

Another bonus of AI: it never needs to sleep. Similar to empowering

customers via self-service, AI is also allowing customers to have 24/7
support—something most companies would not be able to afford or staff in
the age of old. What’s more, 24/7 support isn’t just “good CX”—it’s table
stakes in today’s market. Most customers are not willing to wait until you
open your doors to get answers to their biggest account questions. AI makes
that possible.

Allowing for automated life

assistance
Most of us use Alexa to turn on music or dim the lights. But more and
more, companies are using Alexa, Google Home and other robotic AI to
make their customers’ lives easier. Banks, for instance, are linking with
Alexa and Google Home to allow customers to schedule transfers and bill-
pay. Stores are allowing them to order products by voice. Movie theaters
can allow them to purchase tickets, select seats, and pre-order popcorn

before they even leave the driveway—without even hopping on their smart
phones. These are the ways AI is transforming the customer experience,
and these use cases will only continue to grow as AI expands outward.

Providing “happy” Customer

Service Agents

Let’s face it: it’s impossible for customer service people to be “on” all the
time. Most of us have had some bad encountered that probably led us to
“quit” whatever company we were communicating with at the time. The
benefit of AI, however, is that it doesn’t get upset. Although it has the power
to learn emotional intelligence, it doesn’t get bothered like we as humans
do. That gives companies peace of mind that their agents will always be
kind and accommodating—and their customers will always leave with a
smile on their faces.

The Challenges of AI
Currently, the greatest challenge for brands using AI is that customer data
is spread out among many different channels and disparate systems, and
much of it is siloed. All of the data needs to be unified before it can be
analysed by AI. Given the exponential amount of data that is produced
throughout the customer journey, many brands are using a Customer Data
Platform (CDP) to unify and analyse that data. Blueconic’s CDP uses AI to
enable brands to enhance profiles with customer scores, create more
effective customer segments, and design new data visualizations.
Another challenge is that many brands do not have funds for AI in their
budget, or they have the misconception that AI is overly costly. Similarly,
many brands do not feel that they will get a valid ROI from AI. The truth is
that when AI is used effectively for customer experience, be it for real-time

decisioning, personalization or customer service, the return on investment

can easily be validated through analytics.

For those brands that are considering the use of AI chatbots for handling
customer enquiries and general customer service requests, they must
recognize that AI will never replace human interaction. There will always
have to be customer service agents to deal with requests that the AI
chatbot cannot fulfill. A realistic goal is for the AI chatbot to handle half of
the requests, and the other half will be handled by an employee.

Orr brought up a great point about recognizing the limitations and scope of
AI and how it should, and shouldn’t, be used. “One of the big challenges for
AI today, especially as it relates to customer experience, is where to draw
the boundary. AI often lives as an external service and organizations are
struggling to find the balance between sharing enough information to get a
meaningful, positive impact on customer experience while respecting the
privacy and data risk of their customers. On the technology side, we've
learned that AI needs to be tuned and optimized for each specific
application and that's where a lot of the investment is right now. Of course
in time, AI will be able to tune itself to the application and we'll need to think
of new challenges!”

CONCLUSION
Artificial intelligence isn’t the boogie man that sci-fi movies scared people
with for years, nor is it the job killer that employees have worried about, and
it provides many valuable business opportunities. By leveraging AI to
understand the customer better, taking advantage of real-time decisioning
and predictive analysis, providing a hyper-personalized experience, and
using AI chatbots to engage the customer, the customer journey can be
improved through all touchpoints and across all channels.

Key Takeaways
 Today, Robots with Artificial Intelligence can mimic cognitive
functions of human mind, such as problem-solving and can also
respond to natural languages.
 Brands are leveraging AI to develop core consumer services which
can help them to stay on top of their performance, save cost and
deliver better consumer experience.