AI Personalization Improves ROI?

Executive Advisor & Fellow at Harvard Business School, David Edelman, delves into the realm of AI personalization and its impact on improving ROI. Exploring the significance of leveraging artificial intelligence for personalized marketing strategies, David sheds light on how tailored approaches can enhance return on investment. Discover how AI personalization strategies can revolutionize marketing outcomes in this insightful discussion with David Edelman from Harvard Business School. Show NotesConnect With:David Edelman: Website // LinkedInThe MarTech Podcast: Email // Newsletter // TwitterBenjamin Shapiro: Website // LinkedIn // TwitterSee Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

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  From advertising to software as a service to data, across all of our programs and clients, we've seen a 55% to 65% open rate.

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  Getting brands authentically integrated into content performs better than TV advertising.

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  Typical life span of an article is about 24 to 36 hours.

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  If we're reaching out to the right person with the right message and a clear call to action, then it's just a matter of timing.

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  Welcome to the Martech Podcast, a member of the I Hear Everything Podcast Network. In this podcast, you'll hear the stories of world-class marketers that use technology to drive business results and achieve career success. Here's the host of the Martech Podcast, Benjamin Shapiro.

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  Welcome to the Martech Podcast. I'm your host, Benjamin Shapiro, and today we're going to discuss customer strategy in the AI era. Joining me is David Edelman, who is a senior lecturer at Harvard Business School and the executive advisor to Edelman Advisory Services. He is also the author of The Personalized Customer Experience in the Age of AI. And today, David and I are going to talk about the history of personalization. All right, David, I want to move on to our lightning round. This is where we're going to answer some Martech questions that are specific to the topic that we're covering this week, which is personalization and artificial intelligence. Are you ready for a couple of questions?

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  Of course.

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  All right. First one, trend or trash? Artificial intelligence personalization improves ROI.

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  I think that's definitely trend. And what I have seen in companies that use it well is that they are using it to drive more personalized experiences versus overwhelming people. So it can be trash if it's just leading to a tragedy of the commons where you're just throwing more crap at people. But if you're using it smartly, I have seen companies like Shopify, for example, the example I just said, get a 400% improvement in the ROI on their conversion rates by using AI to manage the way they're going to market.

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  You hit the nail on the head. Trend could be trash, right? It depends on the usage. And to me, an understanding of how to use artificial intelligence is very important before you start to try to use it specifically for personalization, because it can be a very powerful tool, but also when misguided can lead to some horrendous user experiences. And I'm interested to hear, you mentioned Shopify, like, how do brands think about the right way to use artificial intelligence for personalization instead of floundering, trying to figure out what works and what doesn't?

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  What we have looked at as part of the research for the book that we wrote, I did that together with a guy named Mark Abraham, he's the head of the marketing practice at BCG, we researched 200 companies who were more advanced in doing personalization. And what became very clear is that they don't start from the data, they actually start from the customer value they want to create. What is the use case that they want to enable by using AI and personalization to create value for the customer as opposed to just manipulating them? They start from that, they're taking the customer's point of view.

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  Nespresso was not taking the customer's point of view. So you have to think about how you want to actually change that experience. So I'll give you just another example of a company that may be over dit- A few years ago, Howard Schultz said he wanted Starbucks to be the most personalized brand in the world. He said this at an investor meeting. He said personalization is going to be one of the keys to our growth. And they created an app that is incredibly personalized. You open that app and 300 milliseconds, it knows where you are, who you are, time of day, are you at work or somewhere else? How many loyalty points do you have? What

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  do you tend to order at that time of day? Do you get food? Do you buy on discount? All of that. And it dramatically simplifies your ability to just simply place an order of what could be an endless, complex range of variables. And well over 40% of their orders now are coming in through that app. Now, you have to have the backend operations and the stores have been overloaded from that. But he was thinking about the customer and simplifying the whole ordering experience. That's the mindset.

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  All right. And that wraps up this episode of the Martech Podcast. Thanks for listening to my conversation with David Edelman, the executive advisor and senior lecturer at Harvard Business School. If you'd like to get in touch with David, you could find a link to his LinkedIn profile in our show notes, or you could visit his company's website, which is edelmanadvisorieservices.com. You can also find his book at personalizedthebook.com. If you'd like a summary of this podcast, or if you'd like to be our next guest speaker on the Martech Podcast, head over to martechpod.com. You can also find us on YouTube, Twitter, Instagram, or even on TikTok now. And if you'd like to contact me, let's connect over on LinkedIn. My handle is Ben J. Shap, B E N J S H A P. And if you haven't subscribed

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  yet, and you want a daily stream of marketing and technology knowledge in your podcast feed, hit the subscribe button in your podcast app, and we'll be back in your feed tomorrow morning. All right, that's it for today. But until next time, my advice is to just focus on keeping your customers happy.

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  Thanks for listening to the Martech Podcast, an I Hear Everything production. Looking to launch or scale a podcast like this one for your brand? Then visit iHearEverything.com.