12. Menu
Two types of AI
How does AI generate competitive advantage?
AI and customer engagement
Do’s & Don’ts
13. 0
50
100
150
200
250
300
350
400
Significantly reduced
operating profit
Somewhat reduced
operating profit margi
No major change in
operating profit mar
Somewhat improved
operating profit marg
Significantly improved
operating profit
Performance expectations of top managers at AI-using v. non-AI-using firms
Not using AI
Using AI
Firms using AI show & expect higher profits
Source: Bughin & van Zeebroeck (2018)
29. Menu
Two types of AI
How does AI generate competitive advantage?
AI and customer engagement
Do’s & Don’ts
30. AI & analytics drive customer engagement
Source: Ransbotham & Kiron (2018)
Organizations more mature at data and
analytics are less likely to lose customers
AI = An artificial system that behaves in a way that cannot be distinguished from human interactions. But there comes the trick: must the system reason/think like a human, or only make the same decisions as a human would do?
Un type d’AI, celui qui comprend ce qu’il manipule, raisonne comme l’humain. L’autre type, celui qui performe, arrive au même résultat que l’humain, mais sans comprendre ce qu’il fait.
For instance, if Wescom determines that a member recently made large purchases at a do-it-yourself building center or has significantly increased the balance in a savings account, the action would trip a “hurdle level” indicating the member is most likely in need of a mortgage. The credit union would then create a mortgage marketing campaign specifically for that member. “If you’ve opted in, you’ll receive an email within 24 hours while you’re still motivated from that purchase or still in the process of pursuing financing,” (https://sloanreview.mit.edu/projects/using-analytics-to-improve-customer-engagement/)
Capabilities are about what digital technology can do. I strongly believe that whatever the technology can do to date and will be able to achieve in the years to come can be summarized with 5 core high-level capabilities. This simple framework will help us share common vocabulary and understanding of what firms are truly getting from their investments.
Analytics is driving customer engagement. Organizations that demonstrate higher levels of analytical maturity saw a marked advantage in their customer relationships. The most analytically mature organizations are twice as likely to report strong customer engagement as the least analytically mature organizations. (https://sloanreview.mit.edu/projects/using-analytics-to-improve-customer-engagement/)
Identify your most valuable clients (and the ones you don’t want anymore)
Pointcarré is a Fashion retailer
Present in France & Belgium
28 stores
For instance, when you are present in the shopping mall, the shops you are passing, can push a 10% offer on Hot Chocolate - if you are in the target group.
+ Exemple Cinéma Inde
Once customer enters store, sales associates have a complete view including details such as purchase history or scores, enabling personalized interactions.
Refer back to Eliza
Analytically mature organizations use more data sources to engage customers. Many organizations are already making use of data from customers, vendors, regulators, and competitors, but Analytical Innovators are more than four times more likely to glean data from all four sources. They also are much more likely to use a variety of data types — such as mobile, social, and public data — to engage customers compared with less analytically mature organizations. (https://sloanreview.mit.edu/projects/using-analytics-to-improve-customer-engagement/)
Cherish data quality
“biggest issue is understanding your customers: historical transactions, current interests, demographics, interaction preferences, etc. all this data is either 1) not collected, or 2) locked away in silos. experience can't be improved if you don't customer needs”
Through these 5 disruptive forces, digitalization is shaping a new business world that will look very different from the one we have been used to.