Guest post by Colin Shaw, CEO of Beyond Philosophy
Artificial intelligence (AI) is the future of customer experience (CX). Having machines that predict what customers do can only help CX, right? On the face of it, yes. However, more goes into predicting the realities of customer behavior. Unfortunately, history shows we are not good at that.
AI is essential for CX if it includes vital principles from behavioral economics. In particular, AI should factor in how psychology affects people’s behavior as customers. AI must also embrace the idea that irrational thinking inspired by emotion has a much more influential role in the decision-making process than most people believe. Neglect these, and AI could be wearing the CX Dunce Cap.
The Big Hole in Big Data
Before AI, experts said big data would influence the future of customer interactions. Sentiment analysis showed everyone was keen to exploit what big data could do for CX.
However, there is a big hole in big data. Big data collects information about how customers shop, click and work, but it doesn’t tell you WHY, which is critical to predicting future behavior. Big data neglects the psychological, emotional and subconscious influences driving customer behavior. Without this deeper explanation of why people do what they do, the information big data provides is superficial.
The big data problem also represents my concerns with AI. While I agree AI could improve CX, it won’t succeed without consideration of how customers feel during the experience. AI programming in new technology must address WHY people do what they do.
The Importance of Understanding the WHY of Customer Behavior
For years I have said emotions account for more than half of a CX. Emotions influence customer behavior in a myriad of ways. I always explain that people do what they do because of principles revealed in behavioral economics.
Our psychology and resulting reactions affect customers decision-making process. People make irrational decisions all the time. We conserve our energy by using cognitive shortcuts to make decisions that work pretty well most of the time. These processes are influenced by our irrational feelings, which we then tidy up afterward with rational thinking.
For AI and CX, one must also understand the psychological, emotional and subconscious influences involved. One must have a robust understanding of how customers felt when they acted to predict with accuracy what action they will take next time.
I am a Star Trek fan. “The Next Generation” had an AI robot called “Data.” He was intelligent – far more than most humans – but he could not understand why his fellow space travelers did what they did. Why? Emotions were not programmed into his software. For “Data,” emotions did not compute. We need to understand that people buy emotionally and justify with logic. Unless AI can start doing that, it is doomed for failure in CX.
AI Must Learn from Behavioral Economics
Most organizations don’t have a skill set for understanding all of the influences on customer behavior. Companies relying on big data don’t realize that no one has information on customer feelings. So they suffer from a superficial analysis of their customers’ behavior. It’s big data, but with little depth.
AI could suffer the same fate if it also doesn’t embrace the irrational nature of human behavior. Assuming humans make rational decisions the majority of the time, discounting the emotional state that people are in when they make buying decisions, and forgetting that people are at their core intent on conserving energy could leave AI with the same analytical holes big data fails to fill for CX. AI will also have the same shallow understanding of the WHY of human behavior, which can lead to a CX that leaves people thinking “WHAT?”
However, if AI programming begins to include the principles revealed in behavioral economics pertaining to CX, it could succeed where big data and humans have failed. In other words, AI needs to embrace the irrational nature of human behavior – even if it does not compute.
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Colin Shaw is the founder and CEO of Beyond Philosophy, one of the world’s first organizations devoted to customer experience. Colin is an international author of six best-selling books and an engaging keynote speaker & also recognized as one of the original top 150 Business Influencers by LinkedIn. Beyond Philosophy provides consulting, specialized research & training from their headquarters in Tampa, Florida, USA.
Follow Colin Shaw on Twitter @ColinShaw_CX