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Perspectives

Algorithms Over Brands: Reaching the AI-Augmented Customer

2019-10-29


Algorithms are the new interface between brands and consumers, and trust is their fuel — our research shows that customers increasingly trust digital interfaces more than brands. We’ll explain how to connect more intelligently with those customers.

With the rise of nonhuman intermediaries — recommendation engines, e-commerce sites, mobile apps, wearables, smart speakers and other artificial intelligence (AI)-powered systems — consumer power has reached new heights. The machine-learning algorithms behind these systems are augmenting consumers with new levels of intelligence, serving up information, endorsements, guidance, suggestions and even autonomous purchase decisions.

Consumers seem happy with their augmented capabilities. Our recent research reveals that they’re more likely to trust the intelligent algorithms behind voice-based personal assistants and other machine intelligence-driven systems than the information provided directly by businesses. (To learn more about our research, including the methodology, see the link below.) Not only do these intelligent systems fulfill consumers’ desire for information, but they also imbue them with feelings of freedom, efficiency and creativity.

These changing dynamics are forcing businesses to rethink their approach to brand stature. What’s the meaning of a brand when consumers (nearly half in our study) don’t care whether the brands they use today are around tomorrow? When two-fifths would buy a brand they’d never heard of if it was recommended by Siri, Alexa or Hey Google?

The three Rs of serving augmented customers

Businesses must address this fresh challenge of influencing not only AI-augmented customers but also the apps, intelligent assistants and recommendation engines they use. We collected consumers’ attitudes toward brand trust and mapped their preferences to online attributes. We then grouped our findings and recommendations into a framework delineating the elements that businesses must emphasize to win the customer of the future, which we’ll call the three Rs:

  • Reputation

  • Relevance

  • Resonance

Figure 1

The more businesses align their brand objectives, priorities and budgets around these Rs, the greater the chance they’ll be seen favorably by machine-generated recommendations and the human consumers who trust them.

Reputation: Make it easier for customers to see your brand value

Brand reputation, the perception that consumers have about your brand, can be swayed by many online attributes, including how easily consumers can obtain information; buy a product or service; or find ratings and reviews. Only 47% of our respondents felt that businesses made it easy to assess their brand value. When AI-augmented customers or the algorithms they rely on find it difficult to assess brand value online, they move on. The following approaches can help consumers assess your brand’s value:

  • Optimize your digital infrastructure for mobile and voice. AI-augmented customers want the quickest path from their question to a potential answer, and they won’t wait for a slow website to load. A one-second increase in page load time can reduce conversions by 20% on mobile devices. One mistake that businesses make when trying to create mobile-friendly websites is disabling content.

  • Proactively manage your brand reputation online. It’s easy for consumers to judge brands by what they find online based on machine-generated recommendations; 96% of angry customers don’t complain to brands directly, and many of them prefer to share their poor experience online.

  • Hire social media influencers — with caveats. Social media influencers are “people like us” who post on social media about everything from travel to fitness to fashion to beauty. Our data reveals that 50% of respondents trust brands recommended by these influencers. But while influencers can help brands gain digital authority, their downside is steep; fake followers are among the prominent challenges that marketers face today.

  • Make payment an experience, not just a transaction. Ease of use (72%), time required to complete payment (71%), and frictionless payment from any device (65%) are the most important attributes to customers when making payments. If payment requires more than a few seconds, they won’t bother — more than a quarter have recently canceled a purchase because of a poor payment experience.

Relevance: Make sure your customers feel that they’re known

AI-augmented consumers value brands that know them well, anticipate their future needs, and deliver the right product at the right place at the right time. Nearly 60% of respondents say they feel a bond with brands that help them save time and money and make their life incrementally easier, more enjoyable and more productive. This, however, is where traditional businesses miss the mark. While nearly 70% of respondents say that a customized personal experience is important, only half are satisfied with their actual experiences. Here’s how you can address that:

  • Change your approach to customer segmentation. Traditional personalization efforts segment audiences based on generic data and profile the target audience into groups with similar traits. With hyper-personalization, businesses set a user’s browsing, purchasing, demographic and real-time behavioral data as a foundation for relevant, personalized communication.

  • Find your new customer experience voice before competitors do. A voice search strategy isn’t just for ensuring that your customers can find you — it’s about creating an optimized experience that will foster relationships and build brand loyalty.

  • Be real-time or get no time from customers. Customers want real-time customer service without waiting even for minutes, and they expect service reps to already know the purpose of their call. Cognitive computing-based customer service is a unique human-machine collaboration opportunity that will soon become make-or-break for success.

  • Make transparency core to your brand promise, but avoid being creepy. Hyper-personalization requires data at every customer touchpoint. Empower consumers to know how, where and why their data is used in your personalization framework. Also, keep in mind that as your brand moves to deeper personalization, there’s a thin line between delivering an “aha” moment and being creepy or insensitive.

  • Be an inclusive brand that conveys its stance on issues. While intelligent algorithms home in on price, quality and any other rational attribute, they can’t account for emotional connections with brands that align with personal beliefs. In our study, millennials (58%) in particular gravitate toward inclusive brands that take a stance on social, societal and cultural issues.

Resonance: Content drives customer relationships

More than half of our respondents rated businesses’ online content as lackluster and promotional. Today’s consumers are already overloaded with information online. If you bombard them with unwanted messages and blatantly ask for likes, comments and shares, then your brand may be de-ranked by social media platforms, review sites and e-commerce marketplaces.

We recommend that businesses craft their content around four principles, collectively dubbed READ for Relevance, Engagement, Accuracy and Design. Using READ as a foundation, brands can do the following:

  • Trigger meaningful conversations. How do neighbors connect? By engaging with one another, which is what digital platforms have been trying to do. It’s no surprise that millennials (65%) are more open to the idea of sharing content that they like within their network. Shares, comments and reactions will help organic content find its place on an algorithm’s scorecard. Businesses need to continuously monitor how their content is faring and make adjustments to improve engagement.

  • Alexa, can you hear me? Perhaps the biggest challenge for brands is getting their content on the tip of voice-based personal assistants’ tongues. Humans use different language and phrases when conducting voice vs. text searches; businesses need to fine-tune content that a voice algorithm can understand.

  • Up your content quality score by localizing it. Localization is a vital attribute, and one often overlooked by companies. Would you buy from a website in a language you don’t understand? Only 25% of global internet users speak English. But localization is not just translation. It means adapting content not only to local language use, but also to cultural norms and values in specific regions or markets to resonate with that audience.

We are on the cusp of a new era. Changes in how we understand customers are coming at an unprecedented scale, with intelligent machines playing a massive role by augmenting humans with the information they need. Your brand can’t afford to sit on the sidelines.

To learn more, read our white paper, “Algorithms Over Brands: How to Reach Today’s and Tomorrow’s AI-Augmented Customer,” visit our Center for the Future of Work, or contact us.

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Algorithms Over Brands: Reaching the AI-Augmented Customer