AI in Marketing

Prof. Zillur Rahman

Department of Management Studies

Indian Institute of Technology, Roorkee

Week 4

Lecture 25 Avatar Marketing

Welcome to this NPTEL online certification course on Artificial Intelligence in

Markovits. In this module, we will discuss about Avatar Marketing. Now, we will talk
about module 25. So, as you can see, this module 25 is dedicated to understanding what
is avatar marketing. And we are in chapter 4. Let us look at what are the things that we
will cover in this module.

So, we will start with understanding the concept of avatar. Then we will understand the
fundamentals of avatar including the key elements and design typology. The avatar
matrix based on form and behavioral realism and defining avatar design into four types.
Then we will understand the types of virtual world and marketing to avatar.

Now, let us start with understanding what is an avatar. Advances in computer

technology have supported the proliferation of virtual characters, which are broadly
known as avatars, which we define as digital entities with anthropomorphic appearance
controlled by a human or software that have an ability to interact. So, they are digital
entities controlled by human or software and have an ability to interact. An unattractive
shy man will transform himself into a sexiest and aggressive guy or not uncommonly girl
on the virtual block. Modern technology helps people realize a deep-seated desire to
experience what it would feel like to be someone else.

The avatar is the most conspicuous online manifestation of people's desire to try out
alternative identities or project some private aspect of themselves. The word which
originally described the worldly incarnation of a Hindu god Vishnu was popularized in
its cyber sense by Neer Stevenson in his 1992 cult novel, Snow Crash. It is a fully
defined avatar and encompasses not only complex beings created for use in a shared
virtual reality, but any visual representation of a user in an online community. For
example, more than 7 million people have created yahoo avatars, simple but personalized
cartoon-like characters used as pictorial signatures in activities ranging from instant
messaging to fantasy sports. Avatars are endowed with mannerisms, skills, and
wardrobes that their users create, employing a variety of software tools, purchases from
in-world shops, receives as gifts from other avatars, or earns through in-game
achievements.
 Indeed, while avatars' anonymity is part of their appeal, many people take considerable
pride in their creation as public expressions of hidden aspect of their identities. So that is
public expression of hidden aspect of their identities. Those who do not have the time or
desire to enhance their avatars on their own spend a combined total of more than $100
million a year on internet option sites for skills and accessories that are digital weapons
earned or crafted by others that can improve their avatar presence and performance in a
particular world. What are the fundamentals of an avatar? The popularity of avatar is
fueled by two macro-environmental factors. First is the advancement of computer or
digital technologies.

For example, artificial intelligence enabled the development of more complex avatars
and they often appear in three-dimension forms, imbued with seemingly distinctive
personalities, appearances and behavioral patterns and are overall more appealing than
the previous simple versions. Second is, increase in the use of avatar reflects the
growing importance of online service experience such as education, gaming, banking
and shopping, which firms wants to make as convenient and hassle-free for customers as
possible. They are multiple terms that can be referred to avatars, such as automated
shopping assistants, virtual customer service agents, embodied conversational agents or
virtual digital assistants. So these are all the forms of avatars. The key element of avatar,
so there are three elements, three key elements that define an avatar.

The first is anthropomorphic appearance. The second is interactivity and the third is
there is a controlling entity. So let us look at the first one that is anthropomorphic
appearance. Anthropomorphism refers to the extent to which an image looks human.
This element is important because the degree to which an avatar is anthropomorphic
provides cues of its social presence.

Research shows that the more anthropomorphic an avatar is perceived to be, the more
credible and competent it seems. So more anthropomorphic the avatar is more credible
and more competent. How anthropomorphic we perceive something to be impacts our
expectations of certain behaviours and our willingness to interact with that entity.
Knowledge about how to deal with other humans generally is learned early in the life and
is more detailed and readily accessible in people's memory. Then knowledge about how
to interact with inanimate objects.

So we all know how to deal with human, but we do not know how to interact with
inanimate objects. People tend to treat computer technology that exhibits human-like
characteristics as a social actor and apply the same social rules to it during interactions,
despite being fully aware that they are dealing with a machine. The presence of an
anthropomorphic appearance triggers people's simplistic social scripts that is politeness,
reciprocity, which in turn induces cognitive, affective and social responses during
interaction with technology. The next is that it should be interactive. Interactivity refers
to the extent to which individuals perceive that the communication allows them to feel in
control as if they communicate synchronously and reciprocally with the communicator.

Most researchers have found out that interactive avatars can increase customer
satisfaction with a website or product, credibility and patronage intentions. Designing a
truly interactive avatar that can engage in synchronous communication is not an easy
task. Whereas conversational interfaces are truly intuitive when applied to interactions
between people, conversation between human and automated conversational agents are
more challenging. However, when there is a true bi-directional interactivity, it can satisfy
customers hedonic that is having fun while shopping on a website and utilitarian that is
efficiently finding a solution to a problem on a website needs. The third is the
controlling entity.

It refers to whether the control over an avatar that is representing an organization

involves a human operator or a automated computer program. The business practices, in
business practices due to cost considerations, digital avatars appear more exclusively
enabled by AI because that reduces the cost. Consumers want a perception of an avatar
having some level of intelligence but often cannot tell precisely who or what controls it
as there are typically no solid clues available. If agency cues are present in an interface,
they influence users' perception by prompting their cognitive heuristics about the nature
and content of the interaction. Users' perception and behavior thus differ if they learn
that they are interacting with an AI-backed avatar versus one controlled by a person,
reflecting the different heuristics that are evoked by machine versus human counterparts.

Now, we will look at the typology of avatar design. Different design elements cause
avatar to vary in their visual appearances and behavior during interaction with human.
All of the design element affect avatars form realism and behavioral realism. Form
realism refers to the extent to which the avatar's shape appears human. While behavioral
realism captures the degree to which it behaves as a human would in the physical world.

Some researchers argue that behavioral realism is more important than the form realism.
But both form and behavioral realism are associated with greater avatar usefulness in
most of the context. So, both of them behavioral realism and form realism should be
there. Form realism is higher form realism may lead users to develop social expectations
for their subsequent interactions with avatars. Managers can impact the degree of form
realism of an avatar through spatial dimensions, movement and human characteristics.

Spatial dimensions of avatar can be a 2D or a 3D. Research indicates that 3D avatars

are perceived to be more compelling and impactful relative to 2D versions. The second
is movement. Both technological advancements and customer expectations have
prompted the development of more realistic visually dynamic avatars that can move their
bodies and faces. For example, Amelia is a visually dynamic avatar that is capable of
facial expressions and movement and has been used with modifications in various
industries such as banking, insurance and healthcare.

Visually dynamic avatars with the ability for facial expressions can convey emotions
which is especially useful for customers from different cultural backgrounds. Avatars
with high intensity expressions and dynamics allows both the local and global audiences
to achieve approximately equal levels in subject identification and emotion perception.
The third is the human characteristics. To enhance form realism, avatars can be designed
to include additional human elements such as identifiable name, gender, race and age.
Out of the set of characteristics, gender and age are the most commonly used ones
followed by name and race.

Researches show that characteristics such as gender can increase the effectiveness of an
avatar. Avatars' behavioralism can facilitate more natural interactions with users. More
natural interaction with users and managers can manipulate the degree of avatars'
behavioral realism using design elements associated with avatars' interactivity and
controlling entity. Relevant design elements that managers can use to impact avatars'
interconnectivity are communication modality, response type, social content and the
controlling entity. So let us look at the communication modality.

Avatars differ in the modalities of communication they use. Non-verbal avatar

communication can be represented by text, that is speech-to-text avatars, gestures, facial
expressions. Verbal avatar communicate via speech and both non-verbal and verbal
avatars can communicate using a combination of these modalities. The later category
would be the highest in behavioral realism from a communication modality perspective.
Managers might increase behavioral realism by enabling avatars to recognize the non-
verbal behavior of users such as their facial expression prompting more appropriate
responses.

For example, Microsoft's Zicole can interpret users' photo and make relevant inferences
and comment. So this is the picture of that. However, even with significant advances in
AI, creating an avatar capable of correctly identifying and responding to users' various
emotions and context remains a challenge because large interpersonal variability exists
in how people express emotions. Human also have diverse preferences for how an agent,
that is an avatar, responds to them. Response type, managers can design avatars with an
ability to converse in a way that feels natural to users.

For example, HSBC's virtual assistant, Ami, currently is able to select and provide users
with only predetermined responses about a limited number of banks' products. Avatars
with the capability for natural responses instead can have a relatively free-flowing
conversation using expected vocabulary and grammar and with the ability to track the
context of the conversation and make appropriate responses, avatars tend to rely on
scripted responses. For example, the skincare company SK2's Umi understands users
expressing themselves in their own words and response in an organic conversational
manner. The ability to have a conversation that feels natural is also highly correlated
with the perceived agency type. Avatars controlled by human would have a natural
response, whereas software controlled avatars tend to rely on a scripted responses.

Social content, another design element that can increase avatars' interactivity is their
ability to provide some social content during interaction with the users. As opposed to
purely task-oriented communication that is providing product information. Microsoft's
Xiaolce is an AI assistant that also attempts to function like a friend, checking on users
after a relationship breakup or asking about the physical recovery of a user who posted a
photo of a bruised leg. Since its launch in China in 2014, Xiaolce has gained great
popularity due to its emotional intelligence. The real key takeaway is that they have
focused on emotional intelligence that can be called as empathetic computing framework
designed to have conversations with human naturally which can build a social and
emotional connection.

Then comes the controlling entity. Research shows that consumers interactivity with an
avatar that they perceive to be controlled by human behave differently from customers
who believe the avatar is controlled by a software. According to a study, avatars
controlled by human elicit more presence and stronger social influence than do
computer-controlled avatars. Therefore, for forms that rely on software-controlled
avatars, reinforcing human elements can be very effective. However, perceptions of
human agency might not be desirable in all settings. As research shows that people
perform worse on certain tasks when they recognize that they are interacting with a
human-controlled avatar rather than software due to social inhibitions, social desirability
bias and perceptions of reduced autonomy.

For example, avatars have become popular in healthcare and when it comes to
disclosing sensitive information such as drinking habits, users are more comfortable
revealing information if they perceive less human agency. Now, let us look at what is
this avatar matrix. Avatars can be parsamuasily grouped into 2 by 2 taxonomy according
to their form and behavioral realism. This taxonomy provides a foundation for
predicting the success or failure of avatars in business practices and can inform avatar
design strategies.

So this is that 2 by 2 matrix. Form realism versus behavioral realism taxonomy. So on

x-axis we have form realism and y-axis we have behavioral realism and both vary from
low to high. So when both of them are low, that is simplistic avatar. When form realism
is high and behavioral realism is low, then it is superficial avatar. When form realism is
low and behavioral realism is high, then it is intelligent, unrealistic avatar and when both
the realism are high, then it is digital human avatar.

Simplistic avatar, not a very anthropomorphic appearance, example 2D static cartoon

image and low intelligence that is scripted task specific communication. Since this
avatar type has an unrealistic appearance, the consumer's expectations of its behavioral
competence are lowered. It can provide a hassle-free convenience by completing quick
and specific tasks. For example, 24 by 7 travel information, online content exploration.
Most effective of low risk transaction that is basic customer enquiries inexpensive online
purchase.

So this is ING, Netherlands, Inge. Intelligent unrealistic avatar. Intelligent that is

cognitive and emotional intelligence but lacks realistic anthropomorphic appearance that
is cartoon image. It can produce customary lies because the non-realistic appearance
lowers customers initial expectations of avatar intelligence. That is capable of
autonomous natural verbal and non-verbal communication that can also include social
content. Especially effective for complex relational transaction involving sensitive
personal information like mental health by providing reassurance that a non-human agent
will not judge the customer.

So this is PTSD therapist Elle. Traditional avatars realistic anthropomorphic

appearance, 3D dynamic realistic image but low intelligence that is scripted non-
customized solutions likely result in a negative disconfirmation for customers because
the realistic anthropomorphic appearance raises expectations of the avatars intelligence.
Effective in improving productivity of low risk transactions for example bank account
information enquiries can produce detrimental effects on customer experience for high
risk transactions. For example, stock purchases due to lower intelligence. So this is not
West Bank's Coraa. Then the highest form is the digital human avatar.

Realistic anthropomorphic appearance that is 3D dynamic realistic image and intelligent

cognitive and emotional intelligence. Allignment of realistic appearance and intelligence
provides highest level of customer experience. Capable of autonomous natural verbal
and non-verbal communication that includes social content allows for complex
transactions that require highly personalized services for example skin care. Cost
effective for long term relational exchange by providing highest levels of cognitive that
is informativeness, effective that is entertainment and social that is rapport customer
experience.

So this is UBS Daniel Kalt. Let us look at the types of virtual worlds. The online
worlds populated by avatars comes in many forms but can basically be divided into two
types. The first and the most popular by far are combat focused games such as
EverQuest, Lineage and World of Warcraft. The second consists of other virtual worlds
which even if includes games like elements primarily offer the opportunity for social
interaction. In the second type of virtual worlds places like Second Life and Antrophia
Universe aimed at adults and the more teen oriented there.

The Sims Online, The Habbo Hotel users customize not only themselves but also their
environment and experience. Decorating personal living spaces or running their own
events. The settings are more realistic than those in a typical science fiction or fantasy
combat games. Though we often need to pay a monthly subscription to get the full
experience we buy our own land in Second Life for instance or to sell virtual items made
in there. The operators of many of these social virtual worlds recently have allowed
people to join and explore the worlds for free.

This approach have boosted the site's membership numbers. Second Life currently have
around 65000 paying subscribers and another 100000 non paying members with fewer in
world privileges according to Linden Lab, the company that developed and runs that
world. How to go about marketing in virtual worlds? Companies are heavily investing in
avatars to engage and serve their customer better and the use of avatars is predicted to
increase by 241% in the travel and hospitality industry and by 187% for consumer
goods. In the banking industry 87% of the companies already use some form of avatars
or plan to implement one within the coming years. Wells Fargo Bank operates a virtual
world called Stagecoach Island designed to educate teens about money matters through
games and social activities.
 At in world ATMs players take a financial quiz in order to withdraw virtual cash for
activities such as skydiving and games of paintball. In Second Life for instance you find
services you might expect virtual clothing and furniture design, event planning, real
estate brokering. Nike the athletic apparel brand launched Nikeland in 2021 where
consumers can play games, purchase avatar clothing from Nike and collect NFTs. As of
September 2022 around 21 million people have already visited the virtual version of
Nike stores which is based on the company's headquarters. These virtual world is what
we call today as Metaverse and that will be discussed in later modules.

For years companies have been searching for new ways to engage with audience,
generate loyalty and increase convergence. The Metaverse while still a novel concept
provide business leaders with a unique opportunity to showcase products and services
like never before. Built on the foundations of community connections, immersive
experience and innovation the Metaverse is giving new life to the marketing and
customer experience strategies of major companies. The real world marketing potential
of online worlds is suggested by active virtual commerce that already takes place within
them. Online virtual worlds offer untapped marketing potential for real world products
and services particularly because of their ability to generate sustained customer
engagement with the brand.

This occurs through interaction with avatars, the beings users create as representation of
themselves and through which they live and relate to others in these worlds. Advertising
has always targeted a powerful consumer alter ego that hip attractive incredibly popular
person just waiting to emerge with the help of advertised product from a all to normal
self. Now that in the virtual worlds consumers are taking the initiative and adopting alter
egos that are anything but under wraps. Marketers can segment, reach and influence
them directly. Indeed it is important for companies to think about more than the
potentially rich market of virtual worlds and consider the potential customers, the avatar.

For starters avatars are certainly useful subjects for market research. For instance a
company could track how how inhabitants of a virtual world use or otherwise interact
with a particular type of product noting choices they make about the product features
wardrobe mix or even virtual vacation destinations. It could then use those choices to
create profiles of potential customer segments. So now those profiles are used to develop
potential customer segment. For instance in creating a yahoo avatar people choose from
an array of elements including physical features, accessories such as pets and the settings
which in which the avatar appears.

Some of these elements include branded items, Adidas shoes or a jeep commander
parked in the background. While encouraging avatars to wear real world product is
mainly aimed at enhancing the brand. Even at this rudimentary level one could learn that
avatar who choose golden retrievers as pets prefer jeep grand Cherokee over jeep
commanders. As the options presumably multiply in the future and the avatars become
more complex One could assemble detailed profile of those who might be likely buyers
of either kind of a model.
 Avatars might also be enlisted to play a marketing role. They could use their virtual
world sensibility to design products with real world potential. Several second life
clothing designers have been approached by real world fashion houses and at least one
business makes real world version of furniture based on virtual furniture designed by
second life residents. Avatar brokers could link up real world companies with virtual
land owners willing to rent space for the company's marketing initiatives. Avatars
ultimately could run virtual world stores selling real world products or become ad-
vertars paid to publicize overtly or not those same products. But will avatar actually buy
real world products that are marketed in virtual world? In effect purchasing real world
goods for their creators just as those creators buy virtual world paraphernalia for them.

At the least avatars are likely to window shop. Michael K Wilson CEO of Makena
Technologies which run there says that e-commerce sites while they have reduced
retailers brick and mortar cost don't address the inherently social nature of shopping
especially for women. But in the mall of a virtual world an avatar could try on and try
out in front of virtual friends real world clothing brands or styles her creator typically
couldn't afford or wouldn't dare to wear. If she got good feedback from her friends and
become along with her creator comfortable with the idea of wearing a particular outfit a
purchase in the real world might follow. David Cobb head of the community
applications at Yahoo and manager of the company's avatar program said that it does not
cost anything for someone to create an individualized outfit to create an individualized
outfit even mixing several brands and it does not cost anything for companies to supply
the product that become part of this act of self-expression and personal brand
endorsements. The amount of marketing and purchasing data that could be mined is
staggering and avatars digital nature means that everyone is everyone of its moves for
example pursuing products in a store and discussing them with a friend can be tracked
and logged in a database.

This behavioral information organized by individual avatars aside from being priceless
to marketers in the long term could be processed immediately. Research conducted at
Stanford University's virtual human interaction lab have found that users are more
strongly influenced by avatars who mimic their own avatars body movement and mirror
their own appearance. The virtual manifestation of an old sales trick makes avatars
potentially powerful sales people. Using a simple computer script, a selling avatar clerk
is able to subtly and automatically tailor its behavior, its gait, the way it turns its head, its
facial features to the avatars buyers thus making the clerk seem more friendly,
interesting, honest and persuasive. Even more astonishing, digital technologies allow
avatars sellers to modify their behavior and appearance so that they simultaneously
mimic the different gestures and look of hundreds of avatars in the same room at least in
the virtual eyes of each of those potential buyers.

The potential of marketing directly to avatars does not appear after they accompany
their creators tucked in their creator's psyches back to the real world. A company might
for instance create a real world advertising campaign aimed at a particular avatar
segment. Or they might be offered in real world stores a distinctive clothing line
available only to people whose avatar had through achievements in the online world
earned their creators the right to fear the gear thus giving people credibility in the real
world based on the avatars virtual world status. By contrast, what Disney Virtual Magic
Kingdom site instead of bestowing real world credibility for what an avatar does online
grants virtual world credibility for a real world activity. The site is designed to encourage
visits to the company's real world theme park attractions.

Avatars created at computer terminals in Disney's real world amusement parks get to
sport an exclusive born in park icon in the virtual Magic Kingdom giving them main
street creed according to the Disney site. As the barriers between virtual worlds and real
life blurs, so do the barriers between virtual world and the rest of the cyberspace. New
technology allows a group of avatars, a web mob, to roam the internet. Appearance has
superimposed images on a web page. They can check it out, make purchases if they feel
like it, then zoom off as a group to other websites.

Instead of having to seek out avatars in virtual worlds, savvy marketers may instead find
ways to attract avatars to their e-commerce sites. So to conclude in this module, we have
understood the concept of avatar. Then we have gone through the fundamentals of avatar
and its design in which we first understood the key elements. Then we have gone
through the typology of avatar design in which we have read about form realism and
behavioral realism. We have studied about four types of avatar based on the avatar
matrix and finally we have studied about the types of virtual worlds and marketing to
avatars.

And these are the the seven sources from which the material for this module was taken.
Thank you.
 AI in Marketing

Prof. Zillur Rahman

Department of Management Studies

Indian Institute of Technology, Roorkee

Week 4

Lecture 24 Personalization: Going Beyond Segmentation II

Welcome to this NPTEL online certification course on Artificial Intelligence and

Marketing. Now we will talk about module 24. So, as you can see from this slide that we
are discussing personalization and how to go beyond segmentation. So, these two
modules 23 and 24 are dedicated to understand personalization. So, this is part 2 of that
and this is module 24. Now, let us have a quick overview of this module.

So, in this module, firstly, we will discuss the global appetite for AI and the changing
customer journey. Secondly, we take a deep dive into the changing customer journey,
focusing lens on the retail sector. Thirdly, we will understand the customer journey
orchestration. And lastly, then we will introduce a case study of Rujoom.

So, we will start with the first thing that is the global appetite for AI and the changing
customer journey. The term AI is a misnomer. AI enables the marketing team to provide
a personalized experience to a user without being too intrusive. AI is already following
the marketers to optimize websites, personalizing them for different users. For example,
serving them with tailored messages and designs that resonates with them based on their
profile and needs.

The technology behemoths including Adobe, Verizone, Microsoft, Google and

Facebook are driving this trend, one that will prove very lucrative. The PR and
communication industry is quickly changing, making it harder for PR leaders to make an
impact using traditional approaches. So, now these traditional approaches are going out.
With content marketing trends and innovation, social media tools on the rise, PR experts
should expect to see some major shifts over the coming few years. AI and other
technological advancements like virtual and augmented reality mean that the pace of
change will increase dramatically, bringing exciting new opportunities and challenges.

Marketing and advertising have been quick to adopt AI into their practices. But we have
only touched the tip of a massive iceberg. As AI technology develops, reaching
individuals at scale will be possible. So, we will be able to reach lots of individuals. And
we are not talking of embracing the fact that AI solutions will be taking on repetitive
tasks like coverage reports, distributing releases and creating media lists.

AI will allow savvy PR pros to actively focus on creativity and strategy, skills that
machines simply do not replicate. And this is yet. It may happen in future. Now we will
look at the changing customer journey, a perspective from Paul Clark, CTO of Ocado.
Paul Clark, who serves as the chief technology officer at Ocado, shared some fascinating
insights about how the company is changing the way people shop for groceries and how
technology, particularly artificial intelligence, play a pivotal role in this transformation.

Ocado is a global leader in online grocery retailing. Known for its massive automated
warehouses, what sets them apart is their commitment to developing most of their
technology in-house to power their entire e-commerce and logistics platform. As the
CTO, Paul leads Ocado's technology, a division with a growing team of over 1300
engineers. The technology covers a wide range of areas including e-commerce,
forecasting, routing systems, robotics, AI, simulation real-time control of automated
warehouses. Ocado operates at the interaction, Ocado operates at the intersection of
various cutting edge technologies such as internet of things, big data, cloud compute,
cloud computing, robotics and AI.

They see innovation as the secret sauce that makes all these technologies work together
seamlessly. Among these technologies, AI stands out as the most crucial one. It acts as a
versatile tool that enhances other technologies. Paul likens AI to the one ring to rule them
all. It can do exciting things like predicting what groceries customers want.

That is one. Personalized shopping experience. Enabling voice-based grocery shopping

through platforms like Amazon Alexa. The goal at the front end of these operations is to
predict and deliver groceries that customer want without them having to place orders.
They achieve this by analyzing customers past orders and using AI to predict what they
might need next. What they might need next? Considering factors like shopping habits
and preferences.

AI is also essential for personalization, but Ocado is exploring other frontiers like voice
interface. They envision a future where conversations with AI-driven systems happen
not just in your kitchen but also in your car, smart appliances, chatbots and more. These
conversations should seamlessly collect across different platforms, ensuring a smooth
shopping experience. So, now you can talk to and shop across the platforms. It can be
your your kitchen or it can be your car.

Ocado's approach to AI is a blend of in-house expertise and cloud-based services. They

partner with companies like Google and Amazon Web Services while also nurturing
their own AI experts in various domains. Beyond customer interactions, AI plays a
critical role in their supply chain, helping predict what customers will want based on
factors like weather promotions and social media trends. In their automated warehouses,
thousands of robots work together efficiently guided by AI-powered control systems. To
maintain the health of these robots swarms, they rely on AI-driven monitoring and
maintenance, sending data to the cloud for analysis.

In the final stages of their operations, AI helps optimize delivery routes. They use
simulation techniques to plan routes and even create digital simulations of warehouses
before they are built. Ocado's isn't just a typical retailer. It is a unique blend of retail plus
technology and platform. So, this retailer is now three in one.

Retail plus tech plus platform. Their culture encourages taking risks, pursuing
unconventional solutions and constantly striving for improvement. Powell also highlights
a significant challenge faced by the UK in terms of a shortage of AI and data science
talent. He believes that digital literacy should be instilled from a young age and continue
into the workplace, emphasizing the need for lifelong learning. He suggests a shift in
education, focusing on enduring skills like collaboration.

Now these skills are becoming enduring collaborations, creativity, problem solving and
entrepreneurship. So, these are the skills that will be of help now. Rather than just exam-
oriented learning, he envisions a future where education prepares individuals for
continuous learning and self-reinvention. In conclusion, Paul emphasizes the importance
of embracing AI and navigating the transformation it brings. He sees AI as a
revolutionary force that will reshape industries and change how people interact with
technology.

It is not a matter of choice but of making the best use of these technological
opportunities while maintaining a balance between regulation and innovation. Now we
will try to understand what is customer journey orchestration. Customer journey
orchestration is the coordination of customer experience in real time and in omnichannel
environment to better understand customer needs and encourage further interaction with
a brand. Companies can use that information to trigger campaigns or communication to
deliver more value and more personalized customer experience. A customer journey
orchestration strategy and toolset focus on a customer experience with a brand rather
than a view of how that customer came to make a purchase.

This ultimately provides more focus on increasing a customer's lifetime value, ensuring
a positive experience from customer touchpoint through post sales and support. So that is
the overall idea. Customer's lifetime value. Now why this concept is important? In most
organizations, customer engagement involve a variety of teams such as marketing, sales,
customer service and support.

Now that is a problem. However, customer experience across those teams is siloed and
inconsistent because there are these various kinds of team involved. For example,
individual customer experience are created by each team with very little insight as to
what their interactions have historically been. This approach is losing favor with
customers. Today customers are demanding an integrated experience with the brand as a
whole rather than siloed experience with individual departments. So now customers are
having experience with the brand and not with each of these individual departments.

A real world example of businesses working in siloed department is the customer who
has been identified by a company as an ideal customer to purchase a software as a
service tool. The customer's marketing experience involve engaging with various content
and researching how the product might satisfy their needs. From there, the marketing
department hands off this qualified lead to sales. So now this lead has gone to sales. The
sales department's engagement with the prospect includes little insight into the campaign
or communication they encountered during the marketing phase.

So now marketing department sends this to the sales department and the sales
department do not know what were the promises made by by the marketing department.
After the prospects make a purchase and uses the SaaS tool, they submit a support ticket
to address an issue or request additional onboarding support. At the same time, the sales
and marketing teams may continue to contact the customers with follow-up purchase
opportunities, unaware that the customer has encountered an issue. So now on the one
hand, this customer is being asked to purchase more while on the other hand, he is also
facing a problem. And then this affects the overall experience.

A similar customer example that includes the customer journey orchestration process
may look more like this. Multiple teams are aware of each customer's touch point and
decisions made by the internal marketing and sales teams are more apt to trigger
automation based on this cross-team knowledge. In this case, marketing may still have
these customers enrolled in campaign for upsell or cross-sell opportunities. The sales
may continue to engage with their primary point of contact for the same, but they
proceed with greater awareness of the customer. If the customer opens a customer
support ticket, sales and marketing would be aware of it and potentially pause any
marketing and sales communication until the time that problem is resolved.

This way the customer does not receive unwelcome communication while experiencing
an issue with the product. When a customer's cross-channel behavior are tracked, logged
and analyzed, businesses can better predict the next steps the customer may take and
capitalize interactions in real time to deliver a better user experience through
personalization. Now, let us look at how customer journey orchestration works.
Customer journey orchestration platforms use AI and machine learning technologies. A
machine learning model can analyze or listen to the customer behavior on a larger scale
than an individual team or department can.

So, now we are looking at the bigger picture. Bigger and complete picture. The machine
learning findings help the businesses make critical decision with confidence and speed.
The predictive capabilities of AI serves up the right content at the right time to the right
user based on the historical pattern of unique users. So, here also keep in mind that we
are talking of every user being different and that will lead to personalization.

Customer journey orchestration is an advanced form of customer journey management,

which is a process of optimizing the customer experience using technology to create
unique interactions with prospects to move them through the marketing and sales funnel.
The process is accomplished via a collection of tools that monitor and deliver unique
interactions and is not usually done in real time. Both customer journey processes
provide insight into customer journey analytics and customer journey mapping.
Customer journey analytics data can be collected from a variety of tools and interaction
stretch points, but are not always viewed in a single location. Customer journey mapping
tools which visualize a customer's journey at every touch point with a brand can track
across some but not all channels.

Customer journey orchestration can listen to and optimize every engagement. Optimize
every engagement on every channel used by a company. Data can also be viewed in one
location. Now, what are the benefits of customer journey orchestration? The customer
journey orchestration process benefits businesses and customers who get a personalized
and dynamic experience with a brand.

And here are some examples. The first is closing customer service gaps. Customers get
frustrated when they make multiple inquiries to customer service teams to resolve issues.
Using customer journey orchestration tool, teams can improve first call resolution. When
more information about the user is available to internal teams, it can be used to help
address their needs and problems. The second is better communication across campaigns
and channels.

As companies move towards digital transformation and expand their digital footprints,
they use more customer facing channels. Using tools that listen and track interactions
across social, web, mobile, live chat and support channels increases the ability to sync
messaging and experiences across platforms. The third is empowered customers. With
highly personalized experiences and real-time messaging, customers receive the most
relevant information based on their needs. This type of customer engagement fosters
strong and long-lasting relationships and create a more human experience.

The fourth is increased cross-team efficiency departments that can share customer
information are able to work more efficiently and know when to push or pull back
certain communications or campaigns. The fifth is insightful data. Teams can more
confidently identify customer profiles, files or recognize strengths and customer
interactions when they have access to full view of the customer journey and the channel
they engage with. So, here we are talking of a 360 degree view of the customer.

A 360 degree view of the customer. This data can also be used to personalize the data
experience at each step of their journey. Data also provides information about which
steps in the process create friction or reduce customer loyalty. The sixth is improved
performance and increased customer lifetime value. Improved customer experience
yields loyal fans and increased retention and revenue rates leading to higher customer
lifetime value. But with the benefits also come some challenges of customer journey
orchestration.

Despite the advantages of customer journey orchestration, there are challenges that
businesses should keep in mind. The first is cost. Startup cost to implement a customer
journey orchestration strategy can be high and include platform or service fees and
implementation. Clearly defined goals articulating the outcome of implementing a
customer journey orchestration plan can be difficult. Given that each channel within a
company potentially supports a different business goal.

Layering an orchestration platform on top of each department's individual goals requires

creating a new set of goals that tie back to the revenue. The bigger challenge of defining
goals is the need for cross-stream collaborations which requires good project
management. The third is knowing where to begin. Many companies have an idea of an
of the ideal flow a customer would go through with their brand.

But it is not always correct. Sometimes it takes implementing the orchestration platform
to collect the right data to an accurate picture of the customer. While many organizations
have numerous data and analytics tools at their disposal they only see a piece of that
journey. And it is often not tied back to a specific user. Customer journey orchestration
requires an accurate journey map to take advantage of the AI, machine learning and
automation that comes with journey orchestration. Now let us look at a case study with
the Rujoom applying AI based customer journey orchestration for customer service.

In this case study the focus is on the application of AI based customer journey
orchestration in the realm of customer service particularly with Rujoom. Let us begin by
posing a question to you all. What do consumers prioritize when they come to receive?
When it comes to receiving customer services? First is accuracy of information
dissolution.

The second is speed and efficiency. The third is empathy. Fourth is supporting the
customer where and when they want and the fifth is personalization. Which would you
say? Most think speed and efficiency is the most important factor to customers when
receiving customer service. After all no one likes waiting on hold. Being transferred
from agent to agent, channel to channel or wasting time navigating a frequently asked
questions page that never seems to answer your questions. However, when we ask
consumers the above question, accuracy of information and resolution takes the cake at
42% of consumers rating.

This the number one priority of quality customer service. According to CCW digital
research followed by speed and efficiency at 33% while the remaining three categories
totaling the remaining 25%. And this makes sense when you think about it. If you were
out to dinner would you rather get poor tasting food immediately after being seated or
quality food and wait longer. Quality food of course. While speed of service is
undoubtedly one of the most important factors in customer service particularly in
customer support.

Consumers want a quality product whether that product is food in a restaurant or the
resolution of a customer service inquiry. How can we resolve issues using personal AI
engines? In customer service journeys, issue resolution can naturally have many options.
However, the prediction of the correct resolution that would solve or answer a customer
issue can also change in the course of the journey depending upon an endless number of
factors. Where many customer service departments go wrong is when these endless
number of factors that change the customer journey are not accounted for. Now with the
emergence of resume personal AI engines with prediction capabilities, customer service
departments are starting to enable optimization of resolution first and first time right
rates tapping into that number one customer service demand customers are prioritizing
that is resolution.

This applies to both digital self-service channels as well as agent-based channels where
average handling time can be significantly reduced. In the process, the solution gives
accurate resolutions as efficiently as possible meeting customers top two demands.
Resume was designated by Gartner as a 2020 cool vendor in AI for customer analytics
and has AT&T and Comcast as early adapters of its technology. Rujoom AI-based
personal journey orchestration is an out-of-the-box solution for intuitive use by
marketing and customer service teams requiring no data scientist resources from the
service provider side. This applies to journey orchestration across any vertical and
customer type.

Rujoom solution is more interesting these days as we are witnessing massive digital
acceleration in customer service. But in order to sustain digital adoption rates, self-
service channels must be resolution capable and not only route customer to the contact
center. Digital channels that actually resolve more issues would make customer call less.
Yuval Samesh, Resume CEO recently added. Rujoom offers an AI-based personal
customer journey orchestration platform designed specifically for customer service
journey bearing two disciplines.

The first is journey orchestration driving customer journey across channels and sessions
from issue to resolution. This discipline is aimed at retrieving data and feeding
information into back-end systems. The second is customer service issue resolution
applying information collected to create decision workflows for resolving customer
issues with the correct resolution. The result is a comprehensive resolution capable
solution for service providers which can be deployed in a modular way for accelerating
digital transformation and for enhancing call center team's excellence.

Yuval Samesh, Rujoom CEO. Getting digital channels go beyond finding the customer's
intent. Unlike in many other customer service resolution where AI is directed to finding
the customer's intent, Rujoom resolution AI fast forwards the journey to reduce
resolution times and improve first time write rates. The platform drives customer service
journey continuously from issue to resolution across channels for troubleshoot and
resolve technical or commercial issues. The customer service operations team is self-
sufficient in creating and operating customer service journeys. Applied to both self
service and assisted channels as the user experience that is engagement with the customer
or agent is auto-generated and based on templates.

Therefore, it is coding free and does not require developers. According to recent
customer contact week digital market study, 97% of customer service leaders plan on or
have already ramped up AI investment between slightly to extremely to resolve more
issues via self-service since the pandemic. 94% say the same about using AI to route
customers to the right agent. The pandemic has undoubtedly highlighted the
exponentially increasing importance of AI to marketers, customer experience analysts
and customer service leaders. It is time to take the next step with personal AI engines.
For example, if you consider a telecommunication company and you go to a website you
know who you are when you log in.

They know who you are when you log in, check your account, whatever it might be. So,
it is using that data to serve you up meaningful content. The company knows you are an
iPhone user showing you iPhone accessories not Android accessories. So, it is using that
data to serve you better content. Forbes communication council member and former
marketing and CX leader at Verizon, Stacey Sherman told this, it is a combination of
data you have the data you might need to get and create personas and journey maps for
each individuals.

Rujoom's personal AI engines invoked per customer drive personal journey

continuously and persistently from issue to resolution forming a cohesive single journey
leveraging proactive customer engagement as needed. Reaching out to customer that
have unresolved issues and replacing otherwise disjointed customer experience. For
example, a customer using a self-service channel for troubleshooting a technical issue
resulting in having to replace the device will be followed up by the same personal AI
engine sending self-installed instructions upon receiving the alternative device. Only
when the issue resolved the journey in Rujoom system is terminated. So, in order to
conclude in this module, firstly we have discussed the global appetite for AI and the
changing customer journey.

Secondly, we have focused on the changing customer journey focusing lens on the retail
sector. Thirdly, we understood the customer journey orchestration. Lastly, we have
introduced a case study of Rojum in which we have explained Rujoom's approach to
personalization and seamless issue resolution. And these are the 5 references from which
the material for this module was taken. Thank you.
 AI in Marketing
Prof. Zillur Rahman
Department of Management Studies
Indian Institute of Technology, Roorkee
Week-5

Lec 23-Personalization: Going Beyond Segmentation-I

Welcome to this NPTEL online certification course in artificial intelligence in marketing.

And now we will talk about module 23. So as you can see from this, this slide in these 2
modules, that is 23 and 24, we will talk about personalization, and how this that happens.
And it goes beyond the segmentation. So this is part 1 of, of this topic. And we are, we
are talking about module 23.

Now let us look at what are the things that will be covered in this module. So we will
start with understanding what is personalization. And then we will move on to
understand how personalization works to add value for customers and marketers going
beyond segmentation. And then how to make personalization at scale work.

So it is easier to do personalization for 1 or 2 people, but then how to scale it up. Now
let us start with understanding what is personalization. Personalization is a process that
interlinks marketers and customers and solidifies the relationship between them.
However, the success of personalization initiative is constrained by 1. The volume and
quality of customer information.

The volume and quality of information. Second, the ability of firms to generate insights
from customer data. First is about the volume and quality and then how much insights
the company can generate from it. And the third is effective implementation of those
insights that we have gathered from step number 2. To overcome these constraints and to
go beyond the current level of personalized offerings, companies are now resorting to AI
powered solutions.

So AI has shifted the paradigm from a rules based expert systems approach of
personalization to a deep learning based data driven approach. So now the approach of
AI has changed from rules based expert systems to deep learning-based data driven
approaches. It is not expert system approach, but data driven approach. AI is so
unobtrusive that users are mostly unaware that they have interacted with the technology.
When technology works on such personal level, it creates an endearing bond with the
users.

Furthermore, when marketers tap into such bonds, the potential for customer value
creation is enormous. So now this value creation, customer value creation by way of
developing such bond is enormous. Personalization is the most advanced way brands can
tailor their marketing to individual customers. It is done by creating customs and target
experiences through the use of data, analytics, AI and automation. Through
personalizations, company can send highly contextualized communication to specific
customers at the right place and at the right time and through the right channel.

So this is what we are talking about highly contextualized communication to the right
kind of customers, specific customers. As digital marketing becomes more competitive,
personalized marketing provides the opportunities for organizations to meaningfully
engage customers, deepen existing relationships and building new ones and improve the
customer experience. So, these are the three things that are happening. Implementing
personalization strategy not only increase customer satisfaction but also drives brand
loyalty, willingness to spend and overall marketing effectiveness. Now let us understand
how hyper-personalization goes further than segmentation.

So how to look beyond segmentation? Traditionally, organizations have used customer

segmentation as part of their marketing strategy in attempt to ensure customers receive
relevant communications and offers but struggle to achieve deep level of personalization
through this tried and true method. So, as you can see on the left hand side we are we are
having segments, various segment. So, this is one segment, this is a bigger segment, this
is a smaller segment and this is much smaller segment. So, there are five segments. Now
how does this personalization happen? Now you see that on the right-hand side in in
personalization all these colors colors they are mixed up.

So there are blues and blacks and reds and yellows and greens. So each individual is a
segment big or small. So, this red one is big, this red one is is small. So now let us look
at how this segmentation and personalization they they are different. While segmentation
creates customer groups based on shared likes, dislikes, and activities.

Personalization drills down to minute differences which can be used to target customers
at the individual level. So, this is important this individual level. While increasing
segmentation efforts appears to be a good approach it will not result in the best ROI or
maximize program effectiveness. AI-powered personalization delivers optimal results by
allowing companies to tailor their marketing efforts at the individual levels. How by
using data gathered on that specific customer?

So here the data is gathered for a segment here the data is gathered for one person. So
how do we look beyond segmentation? So, this is what New Skin is doing personalized
skin care. So, on the left-hand side so these are the various examples of personalized skin
care. And then make your own natural organic cosmetics. Skin care for dry screen
health and beauty.

So this is a model and she has made the cosmetics organic cosmetics for herself. So,
skin care for dry screens benefits of looking beyond segmentation. So, personalization
can lead to segment of one approach. Which can further facilitate product
recommendations or unique discounts based on using unique customer data such as
psychographics or real time engagement with your brand. This segment of one approach
allows marketers to optimize whom you target with key messages and offers through the
most relevant and appropriate channels.

Levels of personalization. So, their personalization can be achieved in various degrees

ranging from recommendation engines to connecting online and offline sales channels
and from predicting customer preferences to developing products or offerings. So
predicting so it is not about predicting customer preferences but developing these tailored
products and offerings. So, the personalization maturity curve depicts how customers
have moved beyond the rule-based segmentation. This is the personalized maturity
curve.

So on x axis we have personalization maturity and on the y axis we have revenues. So

now you see this curve which starts from single message mailing, field insertion, rule-
based segmentation, behavioral recommendations, then omni-channel optimization and
then predictive personalization. So that is that is amazing. So, you see that this is
moving in this direction. So as this maturity increases the revenue is increasing.

So how to achieve personalization? Personalization cannot be achieved through the

implementation of a single business case. Rather it is a holistic marketing strategy that
fundamentally changes the way organization interacts with customers and should be
treated as an evolving and maturing practice that is embedded throughout the customer
journey and part of every marketing campaign. As organizations advance their
personalization efforts, they can expect deeper relationships to develop with existing
customers while also attracting new customers. So, with this we are trying to do two
things. One is developing deeper relationship with the existing customers and second is
to attract new customers.

Now let us look at how this personalization and customer journey happens.
Personalization throughout customer journey from attracting customers with personalized
web pages and dynamic pricing to providing personalized service after the purchase.
Unlike with mass media where marketers can only assume which customer type or
segment may view and segment with a specific advertisement personalized advertising
uses the same platform and underlying data to present one of the multitudes of targeted
offers based on who is weighing the offer and when. So who is viewing when? For
example Cadbury made use of customer information and photos to create a hyper
personalized video ad. This campaign used customer data including age, location and the
likes provided via the customer’s Facebook page after receiving their consent and it
resulted in increased click through rates and conversion rates.

So this is the that ad (Humne aapke aas-pass ke dukano ko khush kiya ish diwali aap
kise khush kreenge). Organizations like Amazon continue to experiment with
personalization. After the advertising phase seeking to increase sales conversion through
the use of recommendation engines that serve customers with the exact product they are
looking for. While this experience is so seamless that customers may not even realize
personalization is occurring. So that is the whole beauty that customers are not aware.
Customer do not know what is happening.

So customers now expect brands to act like Amazon and predict the product that fits
their need. So, you see that Amazon has increased the expectations of the customers. So,
any company which is not doing that there the expectations will not be met. And you
know that that will lead to unsatisfied customers. Unsatisfied customers will not be loyal.

Now let us look at how this personalization happens throughout the customer journey.
So there are these 9 points starting with the first custom and relevant advertising. So,
targeting customers with advertisements that are unique by either including relevant
products or customer information. So you first make this unique advertisements by way
of giving some relevant information or customer information. Next then move on to the
unique landing pages.

Using cues on where customers are coming from, past visits, geographic data and
preferences to choose what is being presented. So now first we have made this unique
advertisement which takes customer to unique landing pages because now we have all
this data with the company. After that at the third step comes the recommendation
engines, providing content, products or service recommendations that are tailored to the
individual customer needs and wants. So now I am not looking at a whole lot of products
and content and service recommendation but only those which are relevant to my needs
and wants. And then we move on to the fourth point, dynamic pricing and offers.

After giving unique advertisement, unique landing pages, right kind of

recommendations, now we are looking for providing right kind of pricing. So, changing
the offer, promotion or price customers are served based on their propensity to convert.
So, after recommendation and pricing then the journey moves on to the fifth step that is
Service Chatbots. Using conventional AI technology that learns from customer behavior
and delivers customized service that can answer specific questions and concerns in real
time. So now this chatbot is interacting with the customer, answering his queries in real
time.

After that comes Omnichannel customer service using databases and AI technology to
recognize and connect customers both online and offline shopping channels. So now
customer is moving from one channel to another. So, this Omnichannel customer service
it recognizes that the customer is moving and provide a unified interface to the customer.
After that comes the seventh step, Pre-populated applications. Using existing customer
data to pre-populate any documents, processes or applications that may be required.

So now they will fill up your data, your address etc. etc. So that your time is minimized
and then the journey moves on to the eighth step that is Real-time Product Notifications.
Providing customer updates on the status of the product, shipments, promotions or refills
based on their purchase history. So after this then comes the Real-time Product
Notifications.

Keeping customers updated about their orders and about the various promotions etc. and
then comes the last stage that is the ninth stage, Loyalty Programs and Re-engagement.
Using customer purchases, micro-segmentation and geospatial data to send highly
contextualized offers and messages. So now after the customer has, after you have
provided the customer with the update then you keep on sending them highly
contextualized offers and messages so that they are in the loop and they keep on coming
back. Personalization to add, Personalization at scale.

What does it mean to personalize at scale? Marketing technology, automation and

advanced analytic techniques have now reached the level where effective personalization
at scale is possible. And yet getting this test and learn engine to run properly requires a
fundamental re-architecting of a company's marketing analytic processes. The goal is to
create a learning ecosystem where learning keeps on happening. One that connects
insights to outcome as part of the continuous self-improving cycle. So, this is what is
happening, self-improving continuous and self-improving cycle and this requires the
integration of the following three things.

So integrating the three Ds of personalization at scale. The first is data discovery,

second is automated decision making and the third is content distribution. So, these are
the three Ds for personalization at scale. Now let us look at each one of them in some
detail. So let us start with the first one that is data discovery.
 Data discovery is about sourcing and combining traditional and behavioral data. The
traditional and behavioral data to uncover meaningful insights about customers.
Meaningful insights means preferences, interest. So issues with data discovery are given
the complexity of coaxing meaning from a wide range of data. Companies tend to limit
the data they use generally focusing on the data that is easiest to get.

In addition, the traditional CRM systems built on more rigid relational databases often
do not have the flexibility or scalability to manage vast piles of data and vast piles of
structured and unstructured data. What companies needs are systems that can run the
advanced analytics to discover useful and practical insights and then to get the sending of
appropriate messaging. If customer A does action B send item C. An emerging answer to
this issue of data discovery is the customer data platform. So this is the solution to this
problem which is the modern version of a customer data warehouse though one that is far
more flexible and interconnected.

So this this this this this solution is is much better than the data warehouse. So customer
data platforms integrate first party data including customer supply data and purchase
history, website or app behavior and marketing response and engagement information
with the third party data on customer interest and shopping behavior to improve
individual targeting. So now it is what it is doing that the customer supplied data and the
third party data. So that is being integrated to improve individual targeting.

The second is decision making. The brains that drive automated decision making are
the advanced analytical models that produce propensity scores for each customer or
prospect. These scores define the probability of an individual responding to a specific
offer or engaging with specific content. So we are looking at these scores which are the
probability of individual responding to a specific offer or engaging with specific content.
Whereas standard data models can only pump out messages or offers, modern automated
decision making processes allow two-way communication, collecting and tracking
customer reactions and using that information to guide future messages and offers. More
complex decision making rules, exceptions and unacceptable variances can be
programmed to be escalated to managers although these exceptions should be less than
5% of all decisions.

The third is content distribution. The last mile of personalization is content distribution.
A good system will use customers and prospect scores to trigger personalized ads and
lending pages. That is content distribution. We are talking of personalized ads and
lending pages to distribute specific content offers and experiences across channels. For
example, a telco could personalize the bundled offer to anonymous website visitors based
on the type of car they drive, their city and the stores they frequent.
 Similarly, an airline can set rules to help automate decisions on the lowest cost offers for
a ticket and predict which types of customers will respond to the offer over email, a
display ad or within the mobile app. Now how to make personalization at scale work?
For these three Ds to operate successfully, companies need to integrate their technology
systems often through application programming interface that is APIs to allow data to
flow where it is needed and decisions to happen in real time. Doing so allows much of
this cycle to learn and adapt in real time automatically. A series of virtual pipes feed
response data from customers' interaction into the CDPs to develop better statistical and
event-based models.

For example, response rates based on an event and context. Predictive marketing
analytics then make recommendations on which actions drive the highest conversion
rates. Companies that succeed in integrating and automating their customer and
marketing data platform can test, track, refine and optimize themselves in real time,
ensuring that the right offer goes to the right customers or the best leads gets routed to the
best salespeople. This allows brand to shape their customer decision journey 1, deepen
their relationships to and gain a distinct competitive advantage. So all these two, this 1
plus 2 will also lead to 3. That is shaping the customer decision journey and deepening
their relationships with the customers and that will lead to gaining a distinct competitive
advantage.

Now proving right functional support for personalization. Of course, it is not enough to
gather insights. Even at a massive scale, the organization has to be able to act smartly on
those insights. Addressing that problems requires changing how things are done. So that
is the biggest thing, particularly in the following four areas.

One is a coordinated strategy. The second is experienced campaign management team.

The third is a sustained commitment to analytics. And the fourth is a lot of very good
content. So what does this a coordinated strategy means? Marketers need to determine
where they are going to play and how they are going to apply technology to engage
customers.

So that need to determine this is important. That means defining specific use cases
coming with schemas, taxonomies and then orchestrating the right internal and external
resources. For example, the agency and technology partners to manage the process. In
many organizations, these responsibilities exist loosely through disparate activities, but
they need to be coordinated and managed as a cohesive function so as to put insight into
action at scale. The second is experience campaign management teams. While
automation implies that a company can sit back and let the system run itself.
 But there is no autopilot. It takes experienced marketers to set up, deploy and manage
always on campaigns. Organizations can run systems internally with a dedicated team or
enlist their agency to support them provided they still appoint an experienced individual
to liaise with those agencies. So this experienced is a important component of this stage.
A sustained commitment to analytics that is the third.

Data and analytics are the backbones of personalization at scale. But an IT only project
will not work. So although data and analytics are the backbone of this personalization at
scale, but it is not only the IT projects that will work.

Senior leadership commitment. 1. Cross functional involvement. Senior leadership

commitment and cross functional involvement are required to support the infrastructure
and continuously update the data and advanced analytic models that fuel the decision
making engine. Leaders need to continually test business use cases and adjust the data
and tech infrastructure managing these integrated elements in a way one would a live
entity one that is dynamic, fluid and ever evolving. So, we have to treat them as
dynamic, fluid and ever evolving. Because the marketing technology ecosystem evolves
quickly, systems need to be flexible so that technologies can be swapped out when
necessary. So, it should not be that these technologies are built in and difficult to change.

Because these market, the marketing and the customers they are evolving very fast. So
this marketing technology ecosystem that is also evolving quickly. So, then the systems
need to be flexible so that we can keep on changing the technologies so as to meet the
change the requirement of the changing times. Then the last one is a lot of very good
content.

Content fuels personalization and someone needs to develop and organize it. So,
without this content, without content is no personalization. So, content fuels
personalization and someone needs to develop and organize it. The company does not
want its robots to guide people to stale, irrelevant or low cost content. This puts a
significant onus on the developing of a strong content supply chain that is fed by
designers, copywriters, animators and videographers. All content attributes can and
should be tested regularly to define the look and feel and tone calls to action and the
value proposition.

So in order to conclude, in this module we have talked about marketing. We have

talked about how marketing has always been rooted in the brand's ability to create
meaningful connections with customers and AI can facilitate that at various levels.
Personalized marketing will become an essential part of any successful strategy as
technology enabled customer data increases, customer expectations continue to evolve
and the marketplace becomes more competitive. Data analytics and AI are essential
tools in crafting personalized strategies. Data analytics and AI for brands to forge deeper
bonds with customers and also excel in the marketplace.

So it is time to start taking things personally. These are the 5 sources from which the
material for this module was taken. Thank you.
 AI in Marketing
Prof. Zillur Rahman
Department of Management Studies
Indian Institute of Technology, Roorkee

Week 5
Lec 22-Customer Experience: Meaning & Characteristics

Welcome to this NPTEL online certification course on Artificial Intelligence and

Marketing. And now we are talking about module 22. So, as you can see from this slide,
now we will talk about the customer experience, what does it means and the
characteristics of customer experience. So now let us quickly look at what are the things
that will be covered in this module. So how AI facilitates in designing a dynamic
customer experience that is one and how does AI transform the customer experience.
That is the second thing that we will do.

So let us start with understanding what is customer experience. Experience takes place as
a result of encountering, undergoing or living through things. So, these are the three
important components. Encountering, undergoing or living through things.

Accordingly customer experience has been referred to as internal and subjective

consumer responses when in contact with a company. Internal and subjective consumer
responses when they come in contact with a company. So, customers will likely undergo
radically new experiences due to new technologies in the future. So, one impact of this
technology is that they will go undergo a radically new experience because of this
technology. A futuristic shopping customer experience.

Imagine a customer would like to buy some new clothing items for themselves. So when
customers walk into a store and look at different clothing items, RFID chips, internet of
thing technology will enable them to find any relevant product information including One
where and how it was made. Two where the material was sourced from. Three how to
wash the product and how it can be delivered to your home. When customer try on the
item in a changing room, smart mirrors which have a screen behind it that is connected to
your digital world can provide them with customized information such as how well does
the item they are trying fits.

Second on what future occasions they can wear it. And the third is how it blends or
supplements their wardrobe. The above futuristic shopping example illustrates how
radically new technologies and associated software, and hardware can transform the
customer experience. And it is not just in retail. The customer experience in almost any
business will change.
Along the customer journey that is the complete stages of customer goes through from
pre-purchase to purchase to post-purchase, new touch points will be created and existing
ones will be reconfigured. Now let us look at the dynamics of artificial intelligence and
customer experience. Customer experience and artificial intelligence. Marketer should
know that every tech decision should return to the core foundation of customer
experience. With the massive growth in data comes opportunity to utilize the data for
machine learning and AI that can improve everyday experience for customers.

AI promises meaningful return for customer experience. To make the customer

experience better, artificial intelligence can integrate two marketing tactics. One is
getting the right offers to customer at the right time. And the second is delivering great
post-sales service. So that is the why getting the right offers to customers at the right
time and delivering great post-sales service important.

For every brand helping customers make purchase decisions by delivering on their needs
is the top priority. But that is not as easy as it sounds. A surge in digital channels and
hybrid online-offline journeys along with heightened customer expectations have
complicated brands' desire to create and deliver dynamic experiences that equips
customers with the right information and incentives when they need it the most. As per
the Deloitte survey, consumers found most of these two tactics as most helpful while
making purchase decisions across a variety of products and services categories. So, they
are timely offers, knowledgeable customer service.

So these two dimensions routinely outperform customized recommendations, free trials

and samples no-hazel return and cancellation policies and augmented technology. So,
these are the two most important things. So, these are the timely offers and
knowledgeable customer service help lead to more purchases. So, the question was did
any of the following help you make your purchase decisions? So, these are the various
industries, auto, travel, apparel and footwear, beauty and personal care, household
equipment, furniture, electronics, banking products and services. And these are timely
offers and customized service.

The other options were no-hazel return or cancellation policy. Technology made it easier
to learn more customized recommendations, free sample trials. Now you see that the
minimum here is 32% in banking products and services and maximum is 41% in
household equipment. So, it is just about 8- or 9-point differences between the household
to the banking and product services. So, you see how important this is across the
industry.

The second is knowledgeable customer service. Again, that varies from 21% to 39% and
that is again across industry. So, everyone wants to have the knowledgeable customer
service. While here you see the difference is from 13 to 30% or from 13 to 31%. So all
these things they are not so important as these two are very important and not so
important.

They may be important somewhere. For example, customized recommendations are

important in banking products and services, furniture and auto while they may not be of
much importance in apparel and footwear. So building on that, marketers and customer
experience leaders should be asking how can we get the best offer in front of our
customers when they needed most and equip service agents with the right information to
offer those customers a level of service that helps them make the best purchase decisions.
The answer is to optimize artificial intelligence within the customer experience achieving
harmony between human task and machine capabilities. So, this harmony has to be
achieved.

Designing a dynamic customer experience. A dynamic experience for customers means

delivering the assistance and information they need whenever, wherever and however
they want it. One prong of this is the utilization of AI that has enabled brands to deliver
more personalized and creative marketing material and helped predict customer behavior.
Designing and deploying an AI strategy that assist consumers in their moment of need
may be the most effective way to ensure the right offers meet the customers at any point
in their customer journey. However, AI will not be enough.

For instance, a self-service chatbot without live service may convey to the consumers that
the company prioritizes cost savings over helpfulness. That is where the human side of
contact centers comes in. Employing customer agents as part of a dynamic experience
serves a twofold purpose for brand. One is it embeds humanity within the customer
journey and creates an opportunity to expand the view of customer service beyond the
point of sale. For instance, each customer interaction gives agents a captive audience to
whom they can upsell where the two tactics meet, getting the right offer to the customer
at the right time and delivering great post-sale service.

Companies use AI solutions to focus on a particular piece of customer service such as

using data to identify timely offers. However, when AI is embedded with purpose and
planning into critical parts of the entire experience producing timely offers and providing
relevant insights to the company, it can create a more holistic customer service solution.
So, instead of treating AI and contact centers as siloed investments, each with its narrow
purpose marketers should aim to create a more integrated man-machine handoff to better
serve customers and support employees. Now, what does that looks like? So, that is the
question. Ideally, brands would use AI to embed data insights throughout the customer
journey to produce the most relevant offers.

For an extra layer of personalization, AI can serve as an agent assist. When powered with
human-centered design, AI can provide service representatives with the relevant
information as they serve customers to help the latter make the right decisions. Look at
this illustration typically. Take a typical customer interaction from one global travel and
hospitality company with a reputation for fantastic customer service. So, these are the
various stages here.

Inspire, Shop, Book 24 or 28, After Booking 48 and 24, Before Departure, Check-in,
Airport, On Trip, Post Trip. And these are the various activities. Text awareness emails,
peer-to-peer, frequent flyer, big data, traveler affinity, rich media. So, these are the 9
steps where they keep eye on the customers for providing a fantastic customer service.
So, then they are after they inspire, they go in for shopping, then booking and then they
take feedback 24, 48 hours after booking, 48-24 hours before departure, at the time of
check-ins, at the airport, in-flight and post trip.

Now you see that here it ends with the next trip. AI and integrated data immediately lets
the customer agents know the customer travel itinerary where they may have had trouble
completing a booking on the site, what in-person experiences or outings they plan to
attend during their travel and after addressing the customer’s issue providing a cross-sell
or up-sell opportunity if appropriate. While this company may be considered early
adopters, it will not be alone for long. Results from the contact center study shows that
79% of contact center leaders plan to invest in greater AI capabilities in the next two
years. Consider WM, we are a global business to business technology company.

From providing more tailored recommendations to customers around timely security

updates to better equipping customer call center employees with clear guidance, AI is
changing how WM where holistically delivers on the customer experience. A point to
note, use of AI is meant to supplement technical advisors and customer service folks, not
to replace them. So, this is how it provides more tailored recommendations to customers
around timely security updates. So, this is how they are. General health checks, storage
health checks, security health checks, network compute health checks and online health
availability.

Now let us connect the dots. Implementing the dynamic end-to-end strategy necessitates
a real understanding of current customer experience including the opportunities to
improve it. To begin, brand should have a clear picture of their customers, perhaps
employing a customer data platform that can integrate the vast amounts of data collected
from desperate sources. Next marketer should look at how they are currently bringing
data insights to life and encouragingly they do not need to be a data scientist to bring
these capabilities to their organizations. Between more enterprise software as a service
platform embedding AI capabilities directly into the product suits and cloud based
machine learning capabilities offered by multiple vendors, marketers can think less about
the technology and more about the strategic application of it to transform a customer
journey. So, technology should be thought as an application to transform the customer
journey.

So we should not be worried about technology stand alone but we should be worried
about only when it can be and how where it can be used to transform the customer
journey. Example Australia based travel and hospitality company Crown Resorts went
through a transformation. By mapping out the customer journey and understanding what
points make the biggest differences in the customer experience and parts of that was
helping ensure the right technology was in place to provide great personalization at scale.
So this was booking, check in, check out, these are the various locations pre arrival, mid
stay, post check out. The process of customer journey mapping started with getting the
data in one place and overlaying it with the cloud based customer relationship
management system to feed the critical parts of interaction our front of house staff needs
today.

By doing so Crown Resorts is uncovering small windows such as acknowledging a loyal

customers birthday when visiting any of their properties that will make quite a big
difference to the experience customer will have. To better appreciate the customer
experience and its potential, deficits marketer can consider these three key tasks. The
first is understand the customer experience strategy. Identify each channel and touch
points along the customer journey.

Make sure they are connected. The channels and touch points should create a congruent
experience for customers designed with human centered factors at the forefront. So this
is important. Human centered factors. Consider the entire service experience including
the customers, talent and third-party service providers.

Let us look at an example. The health insurance company Anthem is embedding AI in all
of its channels from digital sales service tools to call centers. Ultimately, AI tools are
available to help marketers and customer service leaders create an end-to-end customer
experience that seamlessly blends AI and human service to better serve customers and the
bottom line. So now look at this screen. So here these are the email you displayed plan,
email etc. and here are the plan options available to you.

You must select up to five plans to compare. You can also view top plans. So, these are
the various shopping cart and here there is a doctor. So these are medical plans and
dental plans, add to cart, smart etc.

etc. So, this is how Anthem is using AI for delivering a great customer experience. So
how AI is transforming the customer experience? Empowering sales service available 24
by 7, allowing for automated life assistance, providing happy customer service agents and
improving personalization. Now let us look at each one of them. What does empowering
sales service means? One of the aspects of AI is that it eliminates the need to wait on
hold for the next available agent to help the customers with a simple problem with a
customer's build product or service. AI has changed all that by allowing companies to
use chatbots and virtual assistant to answer common customer service questions, allowing
customers to get in and out in a jiffy.

Chatbots are not completely effective yet but chatbots are doing enough to solve little
problems for the customers. They free up customer service. So this is self-checkout
counter. So instead of waiting for someone to come and do the building etc.

etc. So, this lady is doing the checkout herself. So that is based on AI and it saves her a
lot of time. Now here on the right-hand side, so the AI is saying how can I help you and
the customer says do you have any headphone on sale right now? Yes. We have one. I
have gathered them for you on the on this link.

So now this can go to see the offers directly. The second is that it is available 24 by 7.
Another bonus of AI is it never needs to sleep. Like empowering customers via self-
service, AI also allows customers to have 24 by 7 support. Something most companies
would not be able to afford or staff in the age of old. What's more 24 by 7 support is not
just good customer experience.

It is table stakes in today market. Most consumers are not willing to wait until the
company opens their door to get answers to their biggest account questions. AI makes
that possible. So, this is how it happens. So, the chair I ordered is missing a leg.

I can't assemble it. So, this is what the customer says at 10. I am so sorry to hear that I
am happy to help. Please send your order number and we will send you the replacement
part. So, and then immediately it says I need to update my method of payment. We have
found some matching articles that might help, and I need to reschedule my flight for the
following day.

No problem. What's the booking number? So, this is happening all across this clock.
Around the clock anytime it is available. The third is allowing automated life assistance.
Most of the consumers use Alexa to turn on music or dim the lights. But more and more
companies are using Alexa, Google Home and other robotic AI to make their customers
life easier.

For example bank are linking with Alexa and Google Home to allow customers to
schedule transfers and bill pay. Stores are allowing them to order products by voice.
Alexa tell me about Amazon pay features.

Alexa pay my mobile bill. Alexa pay my electricity bill. So just on the voice command
Alexa is doing all this for for the customer. Movie theatres can allow them to purchase
tickets, select seats and pre-order popcorn before they even leave the driveway without
even hopping on their smartphones. These are the ways AI is transforming the customer
experience and these use cases will only continue to grow as AI expands outwards. The
next is providing happy customer service agents. It is impossible for customer service
people to be on all the time.

Most of us have had some bad encounters that probably led us to quit whatever company
we are communicating with at the time. However, the benefit of AI is that it does not get
upset. Although it has the power to learn emotional intelligence, it does not get bothered
like we as human do. That gives companies peace of mind that their agents will always
be kind and accommodating and their customers will always leave with a smile on their
face. You so even if the customer is saying you are a terrible chatbot, it says that is not
very nice.

Here what did we do today? What do you mean? The fifth is improving personalization.
Another important way AI is transforming the customer experience is by providing
personalized content. This is an era where customers rarely needs to search for products
that would make their lives easier. It is so easy now to find a recommendation based on a
customer’s past history. For example, recommendation videos and movies on YouTube
and Netflix, recommended music on Spotify, recommended TV shows on Hulu,
recommended concerts and performances on bands in town, recommended products are
amazing.

AI is essentially putting in the know hipsters out of business by bringing any and all
content to the forefront. In addition to personalized recommendations, companies are
also turning to AI service to help develop personalized contents. Customers are much
more likely to buy from a company that has taken the time or has used a program to get
to know them. Customers like when their marketing messages are targeted directly to
them. So, customers like when these marketing messages are directed directly to them.
There are some issues with privacy, but most of them are satisfied with what they have
experienced. So, we will discuss personalization in more detail in the next module. So to
conclude, in this module we have understood how AI facilitates in designing a dynamic
customer experience and then we have discussed how does AI transforms the customer
experience. And these are the 5 sources from which the material for this module was
taken. Thank you.
 AI in Marketing
Prof. Zillur Rahman
Department of Management Studies
Indian Institute of Technology, Roorkee

Week 5
Lecture-21 Understanding Customer Journey - II

Welcome to this NPTEL online certification course on artificial intelligence in marketing

and now we will talk about module 21. So, as you can see from this slide, we are talking
about understanding the customer journey that is spread over two modules module 20 and
21. So now this is part 2 of that concept of understanding customer journey and this is
module 21. Now let us quickly look at what are the things that will be covered in this
module. So, we will start with understanding behaviors, habits, and psychology behind
the consumer decision making process. Then we will understand the traditional versus
modern decision-making approaches. How to examine the modern journey and how to
win the modern consumers.

So let us start with understanding how do you shop. Imagine that only one thing on the
customers to do list today is to shop for new pair of jeans. How would he conquer this?
How would he start? How would he finish? And what steps would he take in between?
So, from where would he start and from where would he end and the various steps in
between this. If his jeans are out of style customers might start by researching a new
clothing company. Perhaps he would remember a brand his close friend raves about.
Customer would probably browse the web, scroll through the favorite social media feeds
to search for inspiration, explore reviews or ask friends and co-workers their opinion as
part of their research. It could be that their old jeans fit so perfectly that they just want to
purchase the same pair. They could simply log into the brand's website or app search
through their order history and reorder exactly what they need. Even better they might be
able to redeem loyalty points from a reward program to use towards their purchase. Or
maybe they have a subscription service that knows their style preferences, sizing and
purchase history and they can ship him a new pair of jeans with just one click. Then why
to bother looking anywhere else?

What if disaster strikes and their favorite brand of style has sold out or was has been
discontinued. In this case he would be forced to look elsewhere. Consider new options
styles and brands to find a new favorite pair of jeans. These are common examples of
multiple paths to purchase that exist in the modern age of consumer decision making. So
this is multiple paths to purchase. Today consumers can use multiple screens and multiple
means to perform research and educate themselves. So they can look at the desktop or a
mobile or a tab physical store, online stores and there can be several online stores.
Similarly, there can be several offline stores and they can learn online, offline, in person,
at live events through friends and family, through digital reviews, word of mouth, social
media, exploration and more.

One woman from a recent Google study spent 73 days and interacted with more than 250
touch points, searches, video views and page views before purchasing a single pair of
jeans. 250 touch points and 73 days. She visited several blogs, browsed large merchant
sites, searched for local retailers and watched product reviews on YouTube. Like many of
today's consumers she wanted to enjoy her time shopping, engaged with brands that
inspired her and narrowed limitless choices before picking the perfect pair. Now think
about the implications of this example. Consumer mindsets and behavior have shifted and
adapted to the modern age and so must the consumer decision making journey.
Marketers, advertisers, brands and businesses need to focus on the psychology and
behavior behind each facet of decision-making journey to engage with, 1. Influence 2.
Empower 3. Customers at every stage. Understanding the journey, the opportunities that
exist within each stage and how consumers interact during and between each stage is
crucial to success. The days of a linear and disconnected journey are obsolete, are over.
So, one step at a time. So that is disconnected and linear. Driven by advanced
technologies, globalization, digital commerce, access and a customer-focused
marketplace.

Now what were the problems and opportunities with the previous approach? Preceding
decision-making models such as marketing funnel remain relevant from a broad stroke
perspective but cannot capture the full spectrum of activities and specificity of consumer
purchase behavior because they do not include key developments that directly impact
customers. For example, Expensive channel opportunity, multiple engagement points,
non-linear and interconnected and a shift towards customer centricity, customer
experience focus and modernization and globalization.

Let us understand each one of them in some more detail. So, the first one is Expensive
channel opportunity. Companies can influence the consumer decision making journey.
Now that has exploded over the last few decades. An influx of new channels such as e-
commerce, digital media, online video, email, organic search, paid search, experiential
marketing, social media has created new customer expectations and new opportunities for
marketers and advertisers. The second is multiple engagement points. Modern consumers
can enter and engage in the decision-making journey at numerous stages not just at the
top of the marketing funnel, that is the awareness level. These consumers can and often
will enter further along the journey based on any number of decision-making influences.

The third is non-linear and interconnected. The decision-making journey is no longer

linear. Modern consumers move back and forth between stages and may sometime skip
stages entirely depending on their needs. Today a single interconnected click can take a
consumer from awareness to purchase in a matter of seconds which was earlier may have
taken days or weeks. The fourth is the shift towards customer centricity. Customer
centricity means putting the customer first at every step of the journey. Because
consumers have more options available in the physical world and the digital world both.
Consumers purchasing behavior is shifting towards one in which the consumer is in full
control. So, in this customer-centric world the journey the customer takes can only be
supported or influenced, not directed.

The fifth is customer experience focus. Customer experience is more than a single
engagement. It is cumulative based on every experience and includes pre, mid and post
purchase activities. Consumer experience encompasses everything people do. What they
see, how they feel, where they have been and where they are going now. Every aspect of
the journey plays a major role in the customer experience. The sixth is modernization and
globalization. Driven by technological advances, the marketplace provides people with
increased choices, access, and availability. Modernization, globalization and
digitalization have made it easier for consumers to explore, research, educate and
empower themselves throughout the decision-making journey. For example, in moments
of truth activities, consumers turn to modern resources to research, educate and
comparison shopping before or during the decision-making process. These shifts are
behind some of the changes driving the enhanced and modernized decision making
journey.

Now, continuing with our understanding of problems and opportunities with previous
approaches, modern consumers make decision at their own pace, on their own time and
on their own terms. Today, consumers can use multiple means at any time to perform
research and educate themselves. They can learn online, offline, in person, at live events,
through friends and family, through digital reviews, word of mouth, social media,
exploration, etcetera. The consumer mindset has shifted and adapted to the modern age
and so should the decision-making journey. So, when the mindset has changed, so should
the decision-making journey. Because then the two will not match, there will be
discrepancy between these two.

The modern decision-making journey is less linear, it is multidimensional and

interconnected. So, a person is moving from one place to another place, and he can move
from from any point to any point. To successfully influence consumer decision making
today, marketers and advertisers should fully understand their customers and support
their unique journeys. By creating strategies and tactics to support each step of the
decision-making journey, marketers and advertisers can influence the right person at the
right time, in the right place and at the right moment. So, by creating strategies and
tactics and for each step of the consumer decision making journey, so now marketers
have increased the probability to influence a person when he wants, where he wants and
how he wants. If companies are not proactively supporting consumers along their
decision-making journey, they could be hindering their brand and actively helping their
competitors. Marketers, advertisers, brands and businesses need to focus on the
psychology and behavior behind each facet of decision-making journey to engage with
influence and empower consumers at every stage. Understanding the journey, the
opportunities that exist within each stage and how consumers interact during and between
each stage is crucial to success. How they interact during and in between each stage.

So, this is the modern consumer decision making journey. So, these plus are our
consideration set increases, negatives are it decrease and this plus minus is consideration
set flux, it is changing and that is static consideration set. So now it starts from passive
exposure to active exposure, then it goes to initial consideration, research and discovery.
Till now, your consideration set is increasing. Now, after research and discovery, it
moves on to active evaluation. Active evaluation may have the flux, a changing
consideration set. The consideration set is in flux and then comes the final consideration.
Now at each stage, the consideration set decreases. Then it moves on to decision or
selection where the consideration set is static and then again to post purchase evaluation.
Now again the consideration set is changing, is in flux. Then post engagement, again
there is a change and after post engagement, either the defection journey can happen, or
again active or passive positions can happen. In between, after the customer is retained,
then again it is about the personal experience, connection creation, repeat post evaluation,
repeat post engagement and then the same thing keeps on happening and in between then
comes the subscription journey. So, these are the three things that we are looking at.
After defection, then maybe again he is passively exposed and may move along along
this.

So, let us examine the journey. Consideration sets is a selection of goods, products or
services that consumers consider as potential purchase options. Consideration set
increases, decreases, fluctuates or remain static in size throughout the journey as
consumers they assess, explore, discover and compare their options. So, this
consideration set, it may change. Engagement opportunities are a point along the
decision-making journey at which people can be influenced by information, advertising,
marketing and communication. In other words, engagement opportunities are points at
which the activities of marketers, advertisers and brand owners can have the most
influence on consumers reception, perception and engagement with information, media,
and messaging. By understanding where different consumers can be influenced along the
journey, brand owners can employ strategies or tactics for supporting different audiences,
personas, psychographics, and shopping activities. In addition, certain engagement
opportunities can serve as acquisition points for competing brands, products or services.
Let us look at the consumer decision making journey that is starting from here, the
passive exposure. So, what happens at this passive exposure stage, it occurs when people
are not actively shopping but are still absorbing information through everyday life and
their exposure to brands, products, services, advertisements, media, or content. So, they
are just passively getting exposed to information or advertisement about the product and
services.

After that comes the active exposure stage is when people pay attention to their wants,
needs or desires and begin to actively engage with relevant information. Now as we have
seen earlier, it can be an external source of information, external stimuli to make
consumer move from the passive stage to active stage. So other way as you as you can
recall there are internal stimuli. So we are not talking about it here, we are talking about
this. The active exposure stage is when people pay attention to their wants, needs or
desire and begin to actively engage with the relevant information.

Now again this can be because of their exposure to this, or it can be because of the
internal stimuli. At this stage people start to aggregate goods, products or services that
will eventually make up their initial consideration set. The initial consideration stage
occurs when consumers first place goods, products or services in groups that meet the
selection criteria based on their early perceptions and information. In the research and
discovery stage, people perform searches, uncover information, educate themselves on
purchase decisions. And at this stage consumers may use a multitude of sources or
channels to educate and empower themselves, increasing their consideration set as they
uncover new information. The active evaluation stage begins as people evaluate, add or
subtract goods, products and services from their consideration set, assesses substitutions
and weigh competing products or services against each other. Consideration sets are
likely to fluctuate at this point as comparing and contrasting yields new criteria for
deliberations. As we are comparing and contrasting, the consideration set is not fixed,
and it may keep on changing. At the final consideration stage is when consumers narrow
their consideration set and begin to move towards a final purchase decision. So, we are
moving from changing fluctuating consideration set to a final consideration set.

The decision or selection stage is when a transaction is made. The consumer makes a
decision, selection or purchase. This stage is the tipping point for consumers’ entry into
the post-purchase stage of their journey. The post-evaluation stage occurs as consumers
evaluate their experience with the goods, product or services. Post-evaluation helps
consumers assess their current experience and builds the foundation for their next
purchase journey.

In the post-engagement stage, consumers may share their experiences, perspective and
attitudes with others. This sharing may include writing reviews online, influencing others
via social media and providing direct feedback to the company or the brand owners. The
decision-making journey relies on active decision making with a focus on cognitive and
behavioral influence and engagement. At the post-evaluation and post-engagement
stages, consumers at to a juncture at which they will decide whether to make the same
purchase decisions again or not. This takes them to either the retention journey or if they
decide to make a different purchase decision the defection journey.

So at this stage they can get into the retention journey or the defection journey. Then
maybe at some point in time they again get into the retention journey, or they may still
continue to defect. The same thing can happen here also. So, the retention journey is a
key objective for brands to service is to gain and keep customers and get them to enter
the the the retention journey. Once post-purchase consumers have begun the retention
journey, they typically skip the stages where they would research competitors or
alternatives and instead return immediately to the product brand and service.

The retention journey is an abbreviated form or short cycle of the decision-making

journey that is focused on building relationships and establishing repeat purchases from
consumers. The personal experience stage occurs when consumers build perceptions and
initial impressions based on their experience with the product brand or service. In the
connection creation stage the brand product or service experience goes above and beyond
a transaction purchase and begins to deliver intrinsic value leading consumers to feel
connected to their purchase decisions. The repeat evaluation stage happens as consumers
move through the retention journey, product usage or brand and service experience. At
this stage consumers may evaluate their ongoing experience based on the previous
expectations and the current engagement.

And in the repeat post-purchase engagement stage consumers may share their
experiences, perspectives, and attitudes with others. This is where active loyalists, so we
will talk about that later, are likely to educate their purchase decisions. Repeat post
engagement activity may include sharing reviews influencing other consumers both
offline and online. There are various strategies and tactics that can be employed to help
keep consumers in the retention journey such as loyalty programs can be used,
redeemable point program another strategy that can be used, consumer status upgrades
and repeat purchase discounts. So that customer continues to remain in the retention
journey.

At the center is the subscription journey. The subscription journey is another short cycle
or subset of the retention journey. So, it is a subset of retention journey. The subscription
journey occurs when consumers repeatedly pay for the same product or service. The
subscription journey when consumers make repeat purchases on a frictionless automated
cycle in which purchases are made without attention or action from the consumers
essentially removing them from other decision-making stages. So we may subscribe for
Amazon prime or we may subscribe for Netflix or we continue to subscribe our mobile
service provider.

The goal of the subscription journey is for the experience to become so ingrained in the
new slides that they become reliant on it and passively forgo other options or alternatives.
The subscription journey is not a new phenomenon. The goal includes milk being
delivered daily to your doorstep or having newspaper placed in your delivery box every
morning. Current subscription services range from everything from clothing
subscriptions, meal preparation, pet toys and pet foods and even digital music
subscriptions. The subscription journey relied on passive decision making with the focus
on consumer reliance on both the cognitive and behavioral dependence.

The defection journey when consumers are dissatisfied or unfulfilled with a brand, a
product, a service or an experience they may enter the defection journey. At this stage
they may turn to alternatives or substitutes that they previously considered or seek out
completely new alternatives or substitutes. The defection journey can take consumer back
into the decision-making process as early as the active exposure stage or they may
immediately launch back to dynamic evaluation remembering to grab a competitor's
product off the shelf next time as an example. The defection journey begins when
consumer repeat behavior are disrupted for any reason taking them back into the
traditional decision making stages.

So that is when this defection journey happens. Strategy and tactics can be employed to
keep consumers from abandoning your goods, brands, products and service and defecting
to the competitors. For example, marketers and brand owners can create cost switching
barriers such as cancellation fees which increase the cost or difficulty of switching from
one product to another. So here you are trying to keep the customers by way of erecting
cost switching barriers, increase the cost switching, the cost of switching or they can use
integrated ecosystems where related products or solutions only work well together
making it problematic to transition to a competitor. So, one is where you increase the
cost switching barrier.

Another way is that you make a integrated ecosystem. For example, some services may
not work with switching from one to another. Think when changing smartphone
operating system from to iOS. Some applications or services may not transfer. Just as
some products are designed to work only with a specific product suite.

Think only certain water filters fit your specific containers. The defection journey relies
on a reactive decision-making process driven by cognitive or behavioral interventions
and evaluation. Let us look at the post purchase personas active and passive, loyalty and
opposition. So, consumers reviews and sharing via word of mouth have been constant
over time and today’s channels or platforms for sharing have been amplified due to the
social media and detail commerce. Referrals and reviews can serve as channels for
acquiring or losing the customers. So, these two are again can be used for acquiring or
losing the customers.

Amidst the retention journey and defection journey, there are two broad consumer
segments. Consumer loyalty exhibited by people who are loyal to and pleased with the
brand, product or service and are likely to engage in repeat purchase activities. And
consumer opposition shown by people who are opposed to and disloyal to your brand,
product or service and are unlikely to engage in repeat purchase. When companies dig
deeper into each trait, additional sub-segments are revealed. Active loyalty, passive
loyalty, active opposition and passive opposition.

Now, let us look at the loyalty segments in the retention journey. Consumers demonstrate
active loyalty traits when they advocate on behalf of the brand or experience through
positive word of mouth, reviews, or consumer referent programs. Active loyalty,
consumers typically do not seek out alternative brands, products or experience and
commonly live within the retention journey or the subscription journey. So, they continue
with these two kinds of journeys. Passive loyalty traits by comparison are shown when
consumers stay in the retention journey only until they find an alternative. So, they
become open to competitors and substitutes and may be easily swayed by outside
information or incentives.

Passive loyalty consumers are likely to be influenced by external factors and may nudge
them towards the defection journey. Opposition segments in defection journey. Passive
opposition is the segment in which consumers or customers actively attempt to deseed or
disrupt other consumers from considering a product, brand, or service. So, here you are
actively attempting to deseed or disrupt other consumers. People in the active opposition
segment typically shared negative experiences and negative word of mouth stories with
others and may write negative online reviews.

Passive opposition is the segment in which consumers who may not actively oppose the
brand or product or service or experience will quietly defect without explanation or
sharing any information. So, these users are disinterested and disengaged and typically do
not share defection feedback unless prompted by your feedback service for example. So,
where to play and how to win the modern customers? The modern consumer journey is
non-linear, multidimensional and more interconnected than ever. Consumers have more
choices, information and power. So, it is critical to align all elements of marketing,
advertising, strategy, creativity, messaging to support every consumer along their
journey.

So, there are some key themes to consider as you build strategies and tactics to support
today’s consumer decision making journey. First is know your consumers, the second is
know their journey, the third is plan for every stage even if not every consumer will visit
each one. Think and plan holistically, aim for efficiency, remain agile and adaptive,
coordinate marketing and advertising budgets to support the journey. Let us start with
the first one, know your customers or know your consumers planning, journey mapping,
research, segmentation and persona building can help reveal how consumers are
shopping, what are their preferences and how they are likely to engage. Who are your
consumers? What are they thinking, feeling and doing? What are they trying to
accomplish? What are their biggest pain points? What are their motivations?
Understanding the answer to these questions help you understand consumer psychology
which plays a vital role in both mapping and guiding the decision journey.

The more you know your customers, the better you can support their journey. Then you
should also know their journey, understanding every stage and every aspect of consumer
journey can be crucial to creating an amazing customer experience. From where are your
consumers coming? What are they seeking? What are they looking for information?
What are their potential next steps? Planning creates a compelling competitive advantage
in the marketplace. The more you understand the journey, the better the experience you
can create. The third is plan for every stage even if not every consumer will visit each
one.

Not every consumers will have the same journey. So, it is critical to proactively plan for
every stage at which consumers might engage. Ignore stages, consumer segments or
personas can create frictions along the journey and any point of friction, a consumer
experience can be an opportunity for a competitor. The fourth is think and plan
holistically. Consumers don't think in touch points, they think about their entire
experience. Since the consumer decision making process is interconnected and dynamic,
as marketers and advertisers, companies should ensure that they support a connected,
seamless and contextually relevant experience across all stages and aspects.

The fifth is aim for efficiency, consolidate and simplify. The fewer the stages, the easier
the path. Marketers and advertisers should try to consolidate, simplify or eliminate stages
along the journey to move towards an ideal user-customer experience. Companies should
aim for efficiency by removing friction, speed bumps and roadblocks and help guide
consumers along the journey. The success remains agile and adaptive, as rigid strategies
seldom the best course of action. As the competition, marketplace or consumer
expectation change, it can be crucial that companies' approach to each stage of the
journey remains adaptable and flexible.

For example, switching strategies from focusing on brand advertising to help consumer
gain a better understanding of the brand during the active evaluation phase may prove
more impactful. Other situations may call for switching the focus of loyalty program by
focusing on active rather than passive loyalists. The seventh is to coordinate marketing
and advertising budgets to support the journey. Aligning all elements of marketing and
advertising along consumer journey can enable the company to reach consumers in the
right place at the right time and with the right message.

Without full alignment, marketers and advertisers may face two risks. The first is they
may waste time, money and resources or their efforts to the customer base will be
ineffective. So, in order to conclude, in this module we have understood the behavior,
habits and psychology behind the consumer decision making journey. We have
discussed traditional versus modern decision-making approaches. Further, we have
learned how to examine the modern journey. Lastly, we have focused on how to win
over the modern consumer, and these are the five sources from which the material for this
module was taken. Thank you.