Conversational AI is clearly the now and the future. According to Satya Nadella, “Bots are the new apps.” In 2019, 33% of US internet users will augment their digital experience using voice assistants.
In 2016, there were 3 million Amazon Echos and limited consumer use cases. Today, there are over 35 million voice-first devices, 100M’s of voice-enabled devices, and consumers are searching for Voice+Visual experiences. The explosion of consumers expecting voice driven commerce to serve a core demand — information search, product search and purchase — requires brand new capabilities.
What are conversational bots? Any computer program able to interact or conduct a conversation with a human via auditory or textual method. People enjoy the conversational interface. According to Nielsen, people spend more than 4 hrs per day in communication apps (and growing).
What are conversational (or screenless) experiences? Any voice or text-based experience (such as chatbots or voice assistant apps – Siri, Alexa, Cortona, Google Home) that uses natural language understanding to dialog with users.
[Synonyms: Conversational interface, screenless UX, dialog system, conversational UX, conversational app, conversational commerce, chatbot, chatter-bot, bot]
“Consumers have elevated expectations based on everything they are doing their everyday world. What they see from Uber, they expect everywhere.”
Who are the most customer obsessed companies? What are elements of a customer obsessed company? What role does world-class product management play in staying customer obsessed?
Amazon is definitely one of them. Google is another. Both firms are admired for their relentless innovation, experimentation and execution. So I did some research into what makes them unique.
Bezos focus has been the same for 20 years: “Start with the customer and work backwards.”
Google’s #1: Focus on the user and all else will follow. According to their philosophy…
“Since the beginning, we’ve focused on providing the best user experience possible. Whether we’re designing a new Internet browser or a new tweak to the look of the homepage, we take great care to ensure that they will ultimately serve you, rather than our own internal goal or bottom line. Our homepage interface is clear and simple, and pages load instantly. And when we build new tools and applications, we believe they should work so well you don’t have to consider how they might have been designed differently.”
Simple questions like ‘Where exactly is customer’s problem?’ and ‘What actions should we take to create value, convenience, and selection?’ are challenging for every organization. Most firms rely on McKinsey, Bain or BCG for this analysis. Doing this analysis with A/B testing, click-thrus, customer feedback and transaction data is the hallmark of Amazon product managers. I think that the product management structure of Amazon is their secret to success and differentiation.
The overall strategy of Amazon is shown here. It’s not a secret for their competitors but something that is extremely difficult to execute globally at scale across multiple categories.
The diverse customer segments across our many businesses include:
- Books, Music, Movies, Video Games and Consoles, Software, and Digital Downloads
- Electronics and Computers, Home and Garden, Grocery, Health and Beauty, Toys, Kids and Baby, Clothing, Shoes and Jewelry, Sports and Outdoors, Tools, Auto and Industrial, and Digital Devices
- Amazon Web Services
See my complementary post Retailers and the Paradox of Digital for competitor execution challenges.
Customer Obsession @ Amazon
Amazon’s mission is to be the earth’s most customer centric company. Both when scoping a new initiative and in every day decisions, they start with the customer and work backwards.
Amazon is customer obsessed, not competitor obsessed.
For the times they are a-changin’… Bob Dylan
Customer channel behavior and interaction model is evolving constantly. Just when retailers, banks and others think they have multi-channel figured out the channel/interaction game is shifting with chatbots, virtual assistants, speech shopping, and other innovation.
New technologies have emerged to
revolutionize the way end-users
interact with technology and to
reshape businesses. According to Gartner: “Conversational AI-first will supersede cloud-first, mobile-first as the most important, high-level imperative for the next 10 years.”
Basically, customers are not interacting with brands in a linear fashion… they are jumping around from channel to channel and expecting the experience to be seamless and relevant.
For instance, in online shopping, women are more likely than men to reach for their smartphones and tablets to research and make purchases. Of U.S consumers who say they’ve completed a purchase on a mobile device in the last month, 66.5% are women and 33.5% are men. Compare that to 2013, when a greater share of men than women completed purchases on mobile. [BusinessInsider, The e-commerce demographic report].
To better understand, customize and respond based on customer behavior/context/clicks, Fortune 500 companies are making large investments around Programmatic Marketing (“Marketing that learns”). Specifically, the objectives are:
- Visualize and map the 1:1 customer journey by personas.. Customer journeys are an illustration or visual representation of all points of interaction across touchpoints.
- Optimizing on the right journey attributes to increase yields by >30% lift… Uncover the right combination of web, mobile and physical channels, content and experiences that best achieves the target goals
- Enable marketers to identify journey bottlenecks for individuals and aggregates
- Leverage actual behavior data to enhance and personalize the experience for each individual customer
One of most often implemented use case in Programmatic Marketing is customer journey mapping and analytics. Why? Because, deciphering the nuts-and-bolts” of individual customer journeys (and deducing intent) is core to improving customer experience and driving brand loyalty.
Salesforce CEO Marc Benioff said at a recent conference: This is a huge shift going forward, which is that everybody wants systems that are smarter, everybody wants systems that are more predictive, everybody wants everything scored, everybody wants to understand what’s the next best offer, next best opportunity, how to make things a little bit more efficient.
The retail store that does not have a meaningful relationships with the consumer is dead or going to be dead.
But meaningful relationship are easy to engineer. Today’s marketer is faced with an almost impossible task: Create relevant, individualized journeys for a customer whose channel preferences, purchase behaviors, and tastes evolve with unmatchable speed.
The cutting edge in data-driven digital and mobile marketing is “marketing in the moment”, which is the ability to identify and optimize precise moments of marketing influence across multiple channels and devices. In digital advertising, firms like Facebook and RocketFuel are using continuous scoring algorithms that score each moment to predict whether an individual will react favorably to an ad shown (display ads, search, social media and video) at a given time.
So how do marketers (and advertisers) understand what their audience wants or will see as valuable? That’s where data science comes in. When you strip away the rhetoric, data science is just about finding meaningful insights through analyzing large datasets.
Data Science is increasingly fueling data-driven digital marketing strategies at cutting edge firms…. Marketing learns, acts, and evolves across the consumer journey. Programmatic real-time bidding platforms is growing to dominate ad spending.
“Marketing and Advertising That Learns” Strategies
Who are we designing for? What are we designing? What outcomes are we targeting? What are the end-to-end user journeys as boundaries blur between consumers, stores and consumer brands?
How do you approach the messaging and the storytelling, especially given the challenges of channel proliferation? How do you break through the clutter? The first step in every digital strategy is to develop personas that segment the audience and serve as the foundation for customer UX and journey mapping analysis.
The best practice firms start with the user. Working from the perspective of the client who consumes a product or service, they focus on personas or “one idealized digital user.”
The goal is to think about the prospect, consumer, user as a human being. What matters in his or her life. Why? Because users do not wake up in the morning and think, “I need a new app today,” for example. People wake up in the morning and worry about getting to work, getting kids to school, where to meet friends for dinner, paying your bills and saving for the future.
Understanding the persona and the daily journey is critical in modern experience design. If marketing is going to interrupt you with something that they think is important to you, they have to find a way to tell the user about it so that it resonates with the user. There has to be a benefit to user. There has to be substance. Hence the need for real-world story-telling and context.
What is a digital persona?
Personas are fictional characters used to represent specific segments that interact with the brand across a variety of touchpoints. Personas characterize attitudes, values and behaviors of customer segments, and draw from various inputs to accurately depict the customer. They are helpful in distilling key information into more succinct stories that can be quickly understood. Personas are developed using qualitative research interviews, ethnographic studies – talking to real people about their real needs, motivations and behaviors.
Why is digital persona development important? The new battlefield is the customer journey and its various touchpoints across the lifecycle: AWARENESS → CONSIDERATION → PURCHASE → LOYALTY → ADVOCACY.
Across every industry, consumerization is changing how People they interact with businesses. Traditionally, most businesses have followed the same marketing and sales playbook to generate leads, close sales and provide support to their customers as they did 10-15 years ago. Businesses need a more effective way to humanize the target audience in order attract, engage and delight customers who have access to an abundance of information and an ability to block traditional marketing and sales tactics. To do this, businesses need to deliver an customized experience, which enables them to be more helpful, more relevant and less interruptive to their customers.
I believe an effective way to illustrate how people have transformed the way they consume information, research products and services, make purchasing decisions and share their views. You get a sense of this by reviewing these general personas – Digital Susan, Social Ashley, Introvert Dave, Modern Meghan and Traditional Ted. Read more
Mobile devices are ubiquitous and people glued to their phones throughout the day account for more than half of all internet traffic. Influencing the mobile consumer requires understanding the “context” in real time to make an impact and add value to their life. Four facts about him/her are necessary to engineer unique experiences:
- Who is the consumer?
- What do they want (to meet both her emotional and functional needs)?
- What have they purchased in the past?
- When and where do they shop?
The Rise of Mobile Marketing Automation (MMA)
The state of the art in digital marketing is the integration of social, local, mobile — or frequently called mobile marketing automation (MMA). MMA is a hot emerging areas that leading Chief Marketing Officers are focused on for mobile apps, precision targeting, and test & learn campaigns.
What makes MMA different is the focus on the propensity to purchase coupled with location intelligence. Segmenting and reaching audiences based on demographics, psychographics, content or cookies has its uses, but these methods don’t make the association that matters most – propensity to purchase and actual purchase behavior.
Just a few years ago, the category didn’t even exist. The tremendous migration of consumers to mobile as their primary interaction channel has fueled the need for new sophisticated B2C marketing tools. CMOs focused on digital consumer engagement are aggressively piloting new initiatives in this area.
Why? Because Digital shifts power to Consumer. Mobile isn’t the future – it’s the present. With over 2 billion Smartphone users and growing, mobile channel usage is growing exponentially. Consider these statistics….the number of Facebook mobile daily active users recently crossed 800M; the number of mobile-only monthly actives is 600+M users; % of users who only login from mobile devices crossed 30%.
Mobile-first, mobile-only are new behavior patterns in consumer engagement across all demographics.
Consumers – Gen Z, Millennials, Gen X, and Boomers – all expect brand interactions to be relevant to their immediate context. Established brands are scrambling to appear relevant in this mobile-first world, and brand-specific mobile apps are popping up with never-before-seen speed. Marketing requires meeting consumers where they are with laser-like targeting of offer & message – and mobile is a key place to do so.
“The retail industry is in the midst of a seismic shift. We can bemoan changes in the marketplace or embrace them.” Target CEO Brian Cornell
Every CEO today must have an answer to the question, “What is your digital strategy?”
Consumerization, prosumerism, crowd sourcing, sharing economy, millennial experiences, omni-channel services and other digital-enabled transformations are challenging the status-quo.
Few things have jumped into the consciousness of business executives as quickly as digital business. Executives realize that their companies must succeed in creating transformation through technology, or they’ll face destruction at the hands of their competitors and next generation “unicorns” – Uber, Airbnb, Netflix, Amazon.com, Pinterest, Google/Nest etc. – that do.
TechTarget’s Tom Goodwin had an insightful observation: “Uber, the world’s largest taxi company, owns no vehicles. Facebook, the world’s most popular media owner, creates no content. Alibaba, the most valuable retailer, has no inventory. And Airbnb, the world’s largest accommodation provider, owns no real estate. Something interesting is happening.” All are Asset-lite digital businesses.
These new-age firms have an inherent advantage. Digital startups by their very nature tend to be more user-centric, for several reasons:
- They are often founded on the premise of improving or simplifying the lives of end users;
- Their business is built from the user’s perspective, rather than on an established business model;
- The digital platforms (applications and infrastructure) on which they build their products and services enable a much higher degree of user centrism;
- They lack the legacy infrastructures, bureaucracies and operating models that force many traditional companies to continue thinking from the “inside- out” rather than from the “outside-in”.
There in lies the classic Innovator’s Dilemma made famous by Clayton Christensen. Read more