Cognition and the future of marketing
Many of us remember that night in 2011 when Jeopardy! all-stars Brad Rutter and Ken Jennings met their fate against the IBM Watson cognitive system. While many of us were highly entertained, some amazed and a few a little skeptical, what I'm guessing none of us were feeling was concern about how this leap in the world of computing was going to impact our every day lives, and in particular, our day jobs.
Leaders across finance, human resources and marketing came together recently at the IBM outthink tour 2016 event in Toronto, Canada, to discuss how cognitive computing’s implications can help us think differently about, or outthink, our everyday roles. What are those implications? Before getting to that question, I’ll start with a little bit of background, such as what it is.
Understanding, reasoning and learning
Cognitive computing is a self-learning system, or one that understands, reasons and learns—an easy way to remember it is URL. These systems have the ability to process large amounts of content in context from which they can formulate hypotheses and learn as they consume more data and results over time. Two brilliant capabilities of cognitive systems make them so exciting in this macro. These capabilities are the speed at which they can process information and formulate hypotheses and how they can make sense of structured and unstructured data. Moreover, they can make sense of the kind of data that our current technology stacks are unable to make any sense of such as video and audio content, data in user reviews and comments, and so on.
As a marketer who has relinquished all control to buyers who want personalized experiences from immediately responsive brands, the idea of what cognition represents creates a potential life raft in a world where we’re drowning in technology and data. During the IBM outthink tour event, marketers were invited to a specific track for taking a closer look at some of the trends in marketing and what cognitive computing brings to bare. Following are my biggest takeaways as we continue along this transformation from delivering branded touch points to immersing our prospects and customers in brand experiences.
Thinking broadly about experiences
Carolyn Heller Baird, global research leader at the IBM Institute for Business Value (IBV) asked the audience, “Who owns customer experience in your organization?” Those in attendance immediately reached consensus that customer experience is a joint responsibility across multiple departments including customer service, marketing and sales. Simply seeing this type of shift in mind-set is a big step forward in our journey to build enhanced customer experiences.
Yet, according to IBV’s research, when global chief marketing officers (CMOs) and other business and marketing leaders were asked what goals were driving their customer engagement efforts, the majority cited acquiring new customers significantly more than retaining or growing customer bases. Baird’s challenge to the audience was to consider how a reverse dynamic, one in which customer engagement strategies focused on retention and growth, could ultimately attract new customers. You can read more about Baird and the IBV Experience Report.
Crafting good experiences—access, attitudes and agility
That we’re thinking about a cross-departmental approach to customer experience (CX) is itself a great transformation. Still, understanding what makes a great customer experience is critical to figuring out which department owns which portion of that experience. For my session, that’s exactly what our firm set out to explore. We came up with what we call the “3 A’s of CX,” for access, attitudes and agility.
Building an exceptional customer experience requires us to understand what our customers are looking for across multiple channels and devices. Two major considerations are in play as we venture down this path. First, how buyers are changing the way they use the devices we are familiar with. TVs are getting smarter. Face-to-face events are going digital. Chat is starting to support transactions. Just ask KLM. Second, new channels and devices are continuing to emerge to which we’ll need to react. For example, by 2018, 24 million augmented reality (AR) and virtual reality (VR) devices are expected to hit the market annually. How does this prediction impact your customer experience strategy?
Next, we need to understand what customers fundamentally care about—their attitudes. We’re dealing with rising expectations and decreasing loyalty. Buyers are telling us they expect self-service options, want personalized experiences and value brands that act responsibly. In fact, 80 percent want the brands they buy from to work with nonprofits and volunteer organizations.
And great customer experiences require an ability to react quickly to both customer needs and market shifts or disruptions. According to Professor Richard Foster at Yale University, the average lifespan of a company in the S&P 500 has decreased from 61 years in 1958 to 18 years in 2015. Despite speculation as to whether or not that decline will continue or plateau, market disruption is real. Remember when we rented videos, made calls on pay phones and purchased actual albums? Delivering on great experiences means making them personal to our buyers: being there when they want to access us, reflecting the principles they care about and being responsive to their needs, including those needs the disruption in the market creates.
Offering the potential for personalization at scale
Executing personalized experiences requires one critical component—data. And boy, do we have plenty of it today. In fact, the average office worker drops about 5,000 MB of data per day according to a study by MIT. Our challenge in marketing isn’t getting data; it’s understanding and using it.
Data is structured, the data that’s organized or visible to our systems, and unstructured, which is data that isn’t well organized and is therefore dark to our systems. About 20 percent of data is visible, leaving the remaining 80 percent dark. The majority of marketers today are saying they struggle to make sense of the 20 percent of visible data—never mind the dark data.
These proportions are where cognitive comes into play. Cognitive systems have the ability to process all data, both visible and dark. They help us get a more comprehensive understanding of each of our customers and prospects to better target assets and offers.
For example, a cognitive system can identify which buyers respond best to which offers in which channels. It can then present recommendations on how to segment customers or prospects, mapping which offers to provide in each channel and with what tone. And it’s providing this analysis and recommendation in a matter of minutes versus days, weeks or even months.
Enabling the human element
As a panel of experts and enthusiasts at the IBM outthink tour event discussed the potential of cognitive systems, a hesitant audience member asked, “What’s the fate of the analyst?” While worrying about machines and their advances replacing jobs has become a natural reaction, the reality in cognitive computing is not the elimination of the human element, but rather its enablement.
The rate of data creation increases every minute, and businesses pivot to focus on extrapolating more value from that data. And no matter how many people we hire to address the need, we’ll never keep pace without some ability to enable them through better access and analytics. Cognitive capabilities applied to their systems and tools become the enablement they need to achieve the demands of their roles. Further, the market is anticipating a huge shortage of these roles, so the evolution of these systems is a true necessity.
Cognition can’t replace the value that an individual who knows the business and its strategy brings to the table. These systems need to be asked the right questions to provide the right hypotheses and learnings over time. Our biggest focus from a personnel perspective is going to be on developing the new skill set to be able to work effectively with tools such as these to extrapolate the right value.
Delivering cognitive capabilities to the masses
As the day came to a close at IBM outthink tour 2016 event, Shaunna Conway, commerce business executive at IBM, took the stage with a robot named Watson. The two conversed about the happenings of the day. And as one of the best-known brands in the world talked to a leading-edge piece of technology, the potential of cognition became easy to see in how it could feel reserved for organizations with the biggest budgets. But Conway reminded the crowd that Watson has over 30 APIs available today—with many more planned—and to start, these APIs are complimentary.
How IBM has chosen to take Watson to market has made it accessible to organizations of all shapes and sizes and developers of all levels of experience. Check out the library of available APIs.
Our ability to incorporate cognition into our organizations will be a matter of our ability to think, try and ultimately transform based on the trials that make the most sense. This process is going to require a highly agile philosophy and construction as part of a greater vision that puts the customer, our buyer, at the center of our organization. Cognitive computing is worth the time to explore as it continues to evolve, and if the IBM outthink tour 2016 makes its way to a city near you, it’s worth the time to attend, and World of Watson is the perfect place to get started.