AI is set to unlock a potential 3-5 Trillion Dollars in upside for businesses when applied in Top-Level functions, such as Marketing & Sales – according to new report from Mckinsey.
A new report by McKinsey places AI-Powered Marketing (and Sales) among the most likely activities to benefit from the adoption of Artificial Intelligence, Machine Learning & Neural Networks.
The report highlights the potential upside of AI adoption, as a net gain above returns from existing advanced analytics systems. The study looked at feasible use cases for AI, and found the main benefits in Top-Level (Sales & Marketing) and Low-Level activities (Supply Chain Management).
AI-Powered Marketing FTW
AI-Powered Marketing activities came up trumps, due largely to higher data accessibility (large volumes) and data velocity (regularly changing). Where AI seems to have the biggest impact is where it can be trained on massive data sets that are more difficult for humans and other analytics systems (algorithms for example) to deal with.
That’s where marketing & sales analytics can be coupled with Artificial Intelligence to create wins for businesses. Compared to say, Management Strategy or HR – where data sets are small, and don’t change much – Marketing provides the prefect canvas for deep learning to gleam new insights that traditional systems can’t.
Large, regularly updated data sets (like retail CRMs) make marketing an ideal candidate for running AI layers to improve existing analytics. AI becomes most effective on data sets of 5,000+ labeled items, and even more when the data has “velocity” – regular (daily, weekly) updates to the data set. This enables better training of the AI’s learning systems, resulting in deeper insights and more useful results.
For marketers, this is a massive win. It means we’ll be able to provide tangible, actionable value to businesses, by utilising AI data analysis to unlock insights and opportunities that traditional systems miss. This is just another reason why entrepreneurs & marketers need to seriously dig into understanding AI, to position early as authority in this growing economy.
Unlocking The McKinsey Report
The research states:
From the use cases we have examined, we find that the greatest potential value impact from using AI are both in top-line-oriented functions, such as in marketing and sales, and bottom-line-oriented operational functions, including supply chain management and manufacturing.
Consumer industries such as retail and high tech will tend to see more potential from marketing and sales AI applications because frequent and digital interactions between business and customers generate larger data sets for AI techniques to tap into. E-commerce platforms, in particular, stand to benefit. This is because of the ease with which these platforms collect customer information such as click data or time spent on a web page and can then customize promotions, prices, and products for each customer dynamically and in real time.
This places AI at the centre of business marketing efforts, and makes perfect sense as an ideal use case for AI & machine learning.
Retail & e-Comm will prove to be furtile ecosystems for AI applications, where physical offers can be augmented with AI’s ability to target a shopper’s unique buying habits, shopping history and behaviours.
In retail, marketing and sales is the area with the most significant potential value from AI, and within that function, pricing and promotion and customer service management are the main value areas. Our use cases show that using customer data to personalize promotions, for example, including tailoring individual offers every day, can lead to a one to two percent increase in incremental sales for brick-and-mortar retailers alone.
A bleeding-edge example of how AI is coming to destroy traditional retail is Amazon Go, with it’s “No Checkout” shopping experience. Shoppers download the app, tap upon entry, and machine vision AI scans items as they leave shelves, auto-tallying the shopper’s receipt. It’s 100% real and 100% mind-blowing.
The AI-Powered Marketing Business
How To Implement AI-Powered Marketing into Your Marketing & Sales Plan
Start small, and look to where AI can add the most value to business processes (reducing resource load) or customer experience (improving customer service). As mentioned above, AI works well with incredibly large, complex data sets, and results will only be as good as the data you feed it.
Businesses should look to automate existing processes that Machine Learning can make faster, more efficient or reduce drain on resources -such as using chatbots to automate FAQs – rather than buying AI tools, simply to have AI. Existing narrow AI tools are quite good at simple automations, and this can provide benefits to both the business (staff efficiency) and the customer (faster response times).
A good place to get started, are AI tools built on public data – relevant to your business or customer – that can provide insights you can leverage in your marketing efforts. Various tools on the market suck in publicly available data – such as stock indexes, or housing prices – to create customised recommendations to users. You don’t need to build your own AI solution to experience the benefits of machine learning.
Don’t Believe The Hype! (Actually, do Believe the Hype)…
Everyone is talking about AI – and the Hype is real. I heard a quote recently that perfectly describes the state of AI in 2018, something like (and I’m paraphrasing):
“Right now AI probably does far less than you think it does, but in the near-future, it will do much more than you can possibly imagine!”
This encapsulates the state of AI for most businesses. Yes, make efforts to understand it, test some tools, dip your feet in the water, because AI is coming – and it’s coming FAST.
But… the limitations of general AI are greater than you might think, and there are still some hurdles the technology needs to straddle before it becomes the ubiquitous necessity we know it will be.
Long story short, if you’re in business – an entrepreneur – marketer – brand – CEO – human being – AI will impact your life & business in as yet unimaginable ways. So the best bet is to cosy up and get familiar, because, just like having a website is mandatory in 2018, having AI-Powered marketing, operations, back office and delivery systems will be the norm in a post-2020 world.