How Machine Learning Algorithms are Changing How We Market to Consumers
Artificial intelligence (AI), for years, has been the main subject of many Sci-Fi films and books. The creative minds of writers have transformed AI into machines trying to take over the world, becoming the love interests of future thinking youth. Although, the once imaginary concept of AI is now making waves in the world of marketing and automated sales processes.
AI is a pre-programmed collection database that can perform tasks in numerous industries and businesses to perform functions like diagnosing diseases in medical diagnostics devices, translating languages, creating transcripts, streamlining customer journeys via marketing campaigns, and so much more, that once required human intelligence to figure out. You know those self-driving cars? Those cars are equipped with AI technology, which demonstrate the capability to make decisions and react like humans do.
In marketing, AI has become a strong asset in developing successful campaigns that not only drive sales and revenue but improves the customer experience. Its largest benefit is that it can analyze large amounts of data and find unique insights and predictions in customer buying behavior and spending that would take their human counterparts’ months to decipher – and in the end, loss of precious time.
AI allows businesses to market to their customers while they are actively shopping on their websites while generating a profile for them to produce future content for that individual on both online and off-line campaigns.
So how does it work? AI uses machine learning algorithms and predictive analytics to develop accurate data that is more aligned to individual consumers – eliminating the process of guessing consumer needs and wants.
Machine Learning Algorithms
Deciphering Raw Data
Reviewing raw data can be like reading something in a different language. The raw data is collected in code that machine learning algorithms can translate for humans within seconds. The ability to process this data is essential to businesses as it gives business insights on consumer behavior, trends and information like what consumers are buying, the price points for their most frequently purchased goods, the frequency of shop, channel preference, consumer demographics (gender, age, location, and etc.) and more. That data then helps the business develop consumer scoring models.
Consumer Scoring Models
Every business has its own unique audience of consumers, AI can help you learn exactly who that audience is. The algorithm finds customers who are frequent visitors, low or high frequency spenders, brand loyalists or shoppers who only buy once or twice every few months. These models can be labeled as ‘customer categories’ that helps marketers make smarter decisions when it comes to campaign types and coming up with personalized messaging for those particular customer groups, as well as build onto the consumer experience within each of these consumer categories. This makes marketing campaigns more efficient and personal for consumers. Personalized campaigns sent to the right consumer segments at the right time have proven to have a much higher return on investments (ROI) than general generic campaigns.
AI is now allowing businesses to predict consumer behavior and purchases by analyzing data collected from previous consumer spending patterns. By understanding consumer behavior – we are able to identify purchasing habits and show similar products, or products in the same category, in hopes that the consumer will buy more than they had initially intended. For example, someone is shopping for a swimsuit online, AI identifies what the consumer is looking for and retarget them with ads for other items that were previously shopped for when someone is looking at swimsuits ie. other swimsuits, sunscreen, flip flops, towels and beach umbrellas.
Being able to predict consumer purchases before they do is trending when it comes to executing effective marketing campaign, optimizing purchases and increase ticket sizes. For instance, Amazon’s success can be measured by how it utilizes consumer data to enhance customer experience on their website.
Today, people are looking for more of a 1:1 personal experience and expect business to know their wants and needs, and hit them with discounts and services that will fulfill those needs. Through predictive analytics we can begin to understand human buying behavior on a grand scale and we as consumers are now trained to look through suggested goods and services that we would want or need to purchase along with items we are searching for. This ease of access to purchase additional or higher quality (and often higher priced) items is now at the forefront driving traffic and increasing ticket sizes online. AI just sped up the process.
AI Benefits for Marketers
Now you know how AI helps marketers understand consumer data and buying behaviors, and adopting AI capabilities into marketing campaigns is the best way to get the most out of consumer data, in real-time. It saves your business time and money that would typically take months to evaluate the ever-changing minds of your consumers while also bringing a level of personalization and emotional connection to your audience. Marketing teams can now be more productive in other areas like building out creative messaging or building out a fully customized marketing journey, while not wasting time sifting through the data. The new age of technology is here, it’s time to start using it.
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