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May 23, 2021
Taking a shortcut should always make the journey easier. Not longer or more complicated. When Starbucks customers want to take a “shortcut” to get their coffee quickly, they can avoid the lines by opening the Starbucks app and customizing their drink or duplicating a previous order, then it’s smooth sipping from there. But things weren’t always this way. To deliver this customized experience, Forbes reports that Starbucks used predictive analytics and artificial intelligence (AI) to create a real-time personalization engine that integrates customers’ account information, mobile app, preferences and data. When it comes to optimizing the customer experience across platforms, all the coffee in the world can’t help; but artificial intelligence (AI) can. Here’s how.
Offering a simplified explanation, IBM defines artificial intelligence (AI) as “a field, which combines computer science and robust datasets, to enable problem-solving.” Machine learning and deep learning are AI algorithms used in predictive analytics, to “make predictions or classifications based on input data.” When utilized in business, AI equips companies with the knowledge they need to respond to changing marketplace dynamics in real time—a factor that has proven to be especially important in the time of COVID-19.
In line with changing customer expectations, Evolv Technologies utilizes AI to help companies adapt their offerings and optimize customer experiences across channels. While there’s been an ongoing shift to these types of multichannel strategies, “COVID accelerated that transition five to ten years for almost every industry,” Evolv CEO Michael Scharff says. Offering additional insights into the power of AI, Scharff shares three examples of how this technology can be used to enhance the customer journey.
We can imagine that during the development stages of the Starbucks app, a meeting took place on what it should include and what customers would benefit from the most. “Add in some sort of rewards system,” someone might have proposed. “How about a weekly happy hour?” one might have asked. “Send banner notifications reminding customers about new drink items!” Typically this experimentation stage is slow and linear, with one or two ideas being tested at a time. Following the “work smarter, not harder” motto, AI can increase efficiencies by creating a system to test multiple ideas concurrently. “Optimization isn’t about looking at each change in isolation, but the overall experience. That’s what impacts how the customer proceeds down that journey,” Scharff says. This allows companies to not only look for the best ideas on a large scale, but understand how the combinations of different changes affect the user journey.
“The key performance indicator (KPI) for each optimization is based on what the goal is of the user journey,” Scharff says. Once defined, Evolv’s AI system can anchor around it and help them improve their ROI. While there are plenty of companies out there that say they’re “customer obsessed.” One of these is, of course, the aforementioned Starbucks. As Howard Behar, former Starbucks chairman/CEO, once said, ‘We’re not in the coffee business serving people. We’re in the people business serving coffee.” From this statement alone, we can determine that one of Starbucks’s KPIs is likely its customer lifetime value, which can be calculated by: average value of a purchase X number of times the customer will buy each year X average number years of the customer relationship. Keeping the customer at the forefront, the app uses what it knows about the buyer to deliver unique offers, including suggestions based on local weather (i.e. it’s hot outside, time for an iced coffee or add a “insert previously ordered food item” for extra stars). By utilizing these techniques, Starbucks achieved a 150% increase in user interaction and a three times improvement in per-customer net incremental revenues.
Like a computer and a keyboard, organizations’ in-person and online experience should pair well together and complement one another. “The key is to really understand the power of each channel and how to leverage them together to create that best possible experience,” Scharff explains. In some cases, if one stops working then they both fail. For example, if a customer has their eye on a piece of patio furniture at Target, the streamlined stages from interest to action in an AI-driven customer experience may include:
If the person arrives to find that it’s a different size than shown or it hasn’t been in stock in weeks, this can turn the experience from an exciting one full of anticipatory emotion to frustration and lack of motivation to further pursue the purchase. In fact, 45% of consumers say they’d be less likely to purchase or not make a purchase at all if the experience a brand provides is different from their perceived ideal, a Forrester study finds.
Not limited to the retail industry, AI assistance is increasingly playing a role in healthcare, as well. For example, an accomplished multi-channel experience for patients may include reminder emails and texts to schedule an annual eye exam or checkup, followed by:
Efficient for both patient and healthcare providers, this process can be automated through AI. The assistance that AI can provide healthcare teams prevents burnout and translates to “more robust, engaged and impactful care to the patients,” MedCity News states. Customizing practice offerings to meet patients exactly where they’re at, literally, telehealth visits rose to about 61% in April 2020, according to Statista, and it’s predicted that almost 20% of patient appointments will still be conducted via telemedicine (up from 2% beforehand) after the pandemic.
Whether ordering a coffee or a piece of furniture or being reminded to schedule an eye exam, AI paves the way to a better customer experience and while there are no shortcuts to success, there’s always an opportunity to streamline the process thanks to AI and its friends, machine learning and predictive analytics. For more information on how to create the type of user experiences you want to have for yourself, contact Orange Label!
As Orange County’s longest-standing, privately held response marketing agency, we have witnessed dynamic shifts in the world of marketing. Through it all, we have ensured our clients stay at the forefront of communication and technology, driving response and value with every new endeavor.