With the introduction of ChatGPT in November 2022, 1 questions surrounding the use of artificial intelligence (AI) have risen in every industry, including what might be the best ways to utilize these emerging technologies. For marketers, AI software can help generate ideas, develop strategies, and optimize campaigns to make our jobs a little easier. These benefits, however, do come with some drawbacks, making marketers cautiously optimistic.
Developing several creative marketable ideas in short time frames can be difficult, especially ideas that need to be tested and reworked before launching as a new product or for a campaign. Using AI technologies for rote tasks or idea generation makes marketing much easier and faster, reducing workload and increasing efficiency. 2 Marketers can use AI to produce unique concepts for advertising and promotions as well as analyze consumer data to gather insights and improve performance. 3
AI may also help brands battle ‘creative fatigue.’ 4
For example, when P&G wants to stimulate growth and innovation by identifying and filling a gap in the market, they spend billions of dollars annually on research and development, including significant investment into “foundational consumer research to discover opportunities for innovation, conducting some 20,000 studies involving more than 5 million consumers in nearly 100 countries.” 5 AI technology synthesizes some of these processes and can make developing, analyzing, and testing new product concepts quicker and, consequently, more cost-effective. For a CPG brand like P&G, innovative and efficient product development is essential to their core brand and improving the customer experience. 6
“Consider that artificial intelligence accelerates the product innovation and development process, and that the use of modeling and simulation techniques can dramatically shorten the lead time to find new ingredients against functional specifications, achieving in weeks what previously required months of testing.” Vittorio Cretella, CIO of P&G
CRM is important to increase revenue by optimizing business practices based on understanding and improving customer relationships. AI can be used to drive customer acquisition, customer retention, and customer profitability, three major objectives of successful CRM. Marketers can input questions into AI software like ChatGPT to which it will provide detailed answers that can provide a useful starting place for bettering business practices, developing targeted strategies, or optimizing marketing campaigns.
I asked ChatGPT two questions as an example:
1. What are the most important metrics to measure for customer retention?
ChatGPT provided 9 marketing metrics with their definitions and how to measure them, including repeat purchase rate, churn rate, customer lifetime value, customer engagement rate, and up-sell/cross-sell rate. ChatGPT said, “By measuring and analyzing these key metrics, businesses can gain valuable insights into their customer retention efforts and make data-driven decisions to improve customer loyalty, satisfaction, and long-term business success.”
2. How might a small business improve customer retention metrics?
ChatGPT provided 10 tips for improving customer retention in a small business. It emphasized the value of positive customer experience by providing quality service, building personal connections to establish loyalty, utilizing customer feedback to improve communication and service, and fostering a positive company culture, to name a few. According to ChatGPT, “By implementing these strategies and tactics, small businesses can improve their customer retention metrics and build strong and loyal customer relationships, which can result in long-term business success. Remember, retaining existing customers is generally more cost-effective than acquiring new ones, so investing in customer retention can yield significant returns for your small business.”
Ryan Reynolds reads a script for an ad written by ChatGPT for Mint Mobile:
With the benefits of AI, there are also some drawbacks and flaws that are still being worked out. ChatGPT and similar software are not perfect and may require some fact-checking to ensure quality and accuracy of the information it provides. Marketing messaging generated by AI sometimes still falls flat with consumers as well. The Ryan Reynolds-Mint Mobile ad from January this year is an example of how AI can be used in marketing and exemplifies how much room for improvement remains. While AI is already proving to be a powerful tool to improve the speed and effectiveness of marketing and CRM processes, marketers need to be wary of AI-produced content by knowing how it can impact their firm and the best methods for using it advantageously.
Questions marketing managers might consider:
- How can AI like ChatGPT improve CRM in your firm?
- How might AI provide long-term value?
- What are some ways you can use ChatGPT to optimize a marketing campaign?
References
1 OpenAI. (30 November 2022). Introducing ChatGPT. https://openai.com/blog/chatgpt
2 Graham, M. (16 March 2023). Five Things Marketers Should Know About Generative AI in Advertising. The Wall Street Journal. https://www.wsj.com/articles/five-things-marketers-should-know-about-generative-ai-in-advertising-5381c1d0
3 Marketing Evolution. (20 July 2022). What is AI marketing? A complete guide. https://www.marketingevolution.com/marketing-essentials/ai-markeitng#:~:text=AI%20marketing%20can%20help%20you,re%2Dengage%20with%20the%20brand
4 Graham, M. (16 March 2023). Five Things Marketers Should Know About Generative AI in Advertising. The Wall Street Journal. https://www.wsj.com/articles/five-things-marketers-should-know-about-generative-ai-in-advertising-5381c1d0
5 Brown, B. & Anthony, S. D. (June 2011). How P&G Tripled Its Innovation Success Rate. Harvard Business Review. https://hbr.org/2011/06/how-pg-tripled-its-innovation-success-rate
6 Cretella, V. (1 March 2022). Leveraging Technology to Improve the Lives of P&G Consumers. Procter & Gamble. https://us.pg.com/blogs/executive-talks-innovation-vittorio-cretella/
7 Marketing Evolution. (20 July 2022). What is AI marketing? A complete guide. https://www.marketingevolution.com/marketing-essentials/ai-markeitng#:~:text=AI%20marketing%20can%20help%20you,re%2Dengage%20with%20the%20brand
8 Coffee, P. (10 August 2022). Did a Robot Help Create That Ad? The Answer, Increasingly, is Yes. The Wall Street Journal. https://www.wsj.com/articles/did-a-robot-help-create-that-ad-the-answer-increasingly-is-yes-11660125601?mod=article_inline
9 M. S. (25 August 2022). Artificial Intelligence in CRM Marketing. LinkedIn. https://www.linkedin.com/pulse/artificial-intelligence-crm-marketing-stephane-metral/?trk=public_post
Marketing Management 