Brands, AI, and the Road to Nowhere...

Brands depend on people. And people are social animals, who want to feel valued and connected.

Yet business leadership seems to occupy a different universe, obsessed with driving the adoption of AI.

Yes, execution may get faster and more efficient. But at what cost to the brand?

The current approach to AI is business rather than customer-centric

The narrative for business to charge ahead with AI seems very compelling. For Marketing, it can enable the production of an almost infinite amount of content, optimized at speed, and targeted precisely, bringing the efficiency of one-to-one marketing within reach. For Customer Service, AI chatbots can solve customers problems 24/7, without getting tired or taking breaks. And businesses need to get ready, since people will soon do their shopping using personal AI agents.

But when you focus on people rather than the business, the narrative look less persuasive:

People don’t want more content

There’s already far more content than people are able to consume. If businesses churn out more and more, they will just add to an endless sea of sameness. Already, our feeds and inboxes are being flooded by repetitive and formulaic content. Rather than sheer volume, what matters more is producing content that people find valuable enough to pay attention to.

People want physical experiences

We all know how people reacted to the Metaverse. But consider something as routine as grocery shopping. In the UK, nearly every household has been able to have their groceries delivered for more than twenty years. Yet online grocery still only accounts for c10% of food sales, having peaked during Covid at 12%. Also, bookstores were supposed to be an endangered species, yet their numbers have been surging since 2020. While the much vaulted turnarounds of Starbucks and Target this year have been based on investments in frontline employees and customer experience. Most people of all ages still prefer to visit physical stores. And as our lives become more digital, the desire for physical experiences will only get stronger.

People want to feel connected

The recent FIFA World Cup (soccer to the uninitiated) provided a spectacular demonstration of this, but fandom has been growing far beyond the Sports and Entertainment worlds into mainstream culture. People are gathering around shared interests, including causes, creators, and even brands. Brands as diverse as Yeti, Rare Beauty, Liquid Death, Crocs, and Trader Joe’s have fandom at their heart. In an increasingly uncertain and digital world, people want to feel connected to something bigger than themselves, not isolated in an AI-driven hyper-personalized bubble.

People don’t trust AI

As AI spreads into every area of their lives, people are becoming increasingly wary. Pew Research recently found that 52% of Americans are now more concerned about AI than excited, up from 37% in 2021, with adults under 30 being the most concerned. Similar concern is growing in Europe. A variety of issues are being raised, such as loss of jobs, data center construction, personal data security, lack of oversight, and the breakneck speed of implementation. But underpinning all this feels a growing frustration that AI is being forced on people, rather than benefiting them.

Trust in brands is being undermined

This lack of trust in AI is clearly a problem for AI companies (and increasingly for politicians). It also spells trouble for brands.

Brands depend on people trusting that they will deliver their promises and have their customers interest at heart. But driving AI adoption for business rather than customer benefit undermines this trust.

AI-driven personalization raises customer concerns over the misuse of personal data

There’s always been tension between personalizing for customers and the personal data that’s needed to deliver it. In my experience with Tesco and Dunnhumby, it usually escapes the feeling of “creepiness” as long as it creates value for customers . However, hyper-personalization at the moment seems to be more about dynamic pricing, personalized advertising, and a barrage of messages, rather than customer value. No wonder Qualtrics found a sharp increase in people’s fear of personal data being misused with AI automation, with more than 50% of consumers worried.

AI chatbots cause CUstomer frustration

The rush to deploy chatbots seems like a good idea, as they can be effective at resolving low involvement tasks without human intervention. However, the vast majority of people still want to interact with a human, especially for more complex and emotionally sensitive issues, and many find AI makes it harder for them to reach a human at all. Customer service is a key indicator of how much a brand cares about its customers. AI should improve it, not just make it cheaper for the business. Customers can tell the difference.

AI-generated content raises questions about authenticity

68% of people now frequently wonder whether the content and information they see is real, according to Gartner. 50% say they would prefer to give their business to brands who don’t use GenAI in consumer-facing message, advertising, and content. This is hardly surprising! Take food photography. Food brands in the past have occasionally been accused of making photos of their food look a bit better than it is. But using a synthetic image completely divorces it from the reality of the product. It’s fake, and not to be trusted.

The irony of all this is that in the age of AI, businesses need their brands to be stronger than ever. Yet by focusing AI on business benefits, they’ve taken a road that weakens them instead.

Three rules for a customer-centric approach to AI

None of this is to deny the potential of AI to create value. But to strengthen brands, the priorities for its adoption need to change. Businesses should just return to being customer-centric, which many over the years have claimed to be.

Back in my Tesco days, we had a simple test for any initiative: it had to be better for customers, simpler for employees, and cheaper for the business, in that order.

Using a similar approach to guide AI adoption would reset the direction, and put it on a better road. It could look something like this:

Rule One: AI should create value for Customers

The idea here is to start with the needs, preferences, and satisfaction of customers, and then work out how AI can add value. For example, how could we use AI to improve the physical experience for customers?

Rule Two: AI should make work easier for Employees (provided it doesn’t conflict with the first rule)

The idea here is to create the best combination of AI and employee skills, rather than simply replace them. For example, how could we redesign customer service so that AI resolves low involvement tasks faster, employees are freed up and supported to resolve more complex moments, and the hand-off between the two works seamlessly for customers?

Rule Three: AI should make the Business more efficient (provided it doesn’t conflict with the first two rules)

The idea here is to utilize AI in the background to improve the business, without compromising the brand. For example, how could we redesign our supply chain processes so that we can be more efficient in delivering our brand promise for customers?

This of course is a business leadership issue. In today’s world it’s impossible to say where the business stops and the brand starts. The entire business needs to adopt these rules, not just the CMO.

It may seem less compelling than prioritizing business benefits. But a customer-centric approach to AI is not just good marketing. It’s good business…