Netflix’s AI-assisted recommendation system is estimated to save $1 billion per year for the media behemoth. If an Artificial Intelligence (AI) and Machine Learning (ML) system can create customer personas for you, how much can your business save?
A customer persona is a fictional representation of your customer. This is the textbook explanation of what a customer persona is. It is one of the greatest tricks that a marketer can pull to get closer to the thoughts of a potential customer.
A company’s communication strategy and marketing budget can be determined by knowing its personas. The lack of understanding of your customers, or in other words, not knowing your customer personas, can spell trouble in a variety of ways. The business will never know the kind of content or communication that might appeal to their potential customers or from which part of the world they are from and where their interests usually lie.
It is expected that by 2025, worldwide data will grow 61% to 175 zettabytes. AI has the ability to provide sense to massive amounts of data in near real-time. It is this capacity of being able to provide meaning to data and pass them off as actionable information which makes AI powerful in this scenario.
Each piece of information that you use to size up your customer with the help of customer personas brings you closer to them. That’s what matters. To create traditional personas, it usually takes countless hours of data collection, interviews, rummaging through a multitude of corners in the Internet, collating all of this data and analyzing them.
The AI market is expected to grow to a $190 billion industry by 2025, based on research by Markets and Markets. One of the biggest drivers for this growth is AI’s ability to analyze consumer data from different sources and understand the customers.
Marketers can further refine their communication strategy and create personas much more quickly by using Artificial Intelligence and Machine Learning.
Oh wait. Did we just say that Personas have problems? As useful as they are, they do have some disadvantages when compared with what AI-powered consumer personas can offer. Let us see some of the problems with the normal Customer Persona that is developed without the use of AI and Machine Learning.
Most of the traditional buyer personas concentrate on data which are collected from interviews, demographic data, etc., There is little to no information about their online behavior. Most people these days are available online and also contribute a lot of content and share about their life in different social media networking platforms. There is a terrible disconnect with most prospects at this juncture.
If you want to get the full benefits of persona, you need to keep updating it as your customers keep evolving. It might be possible if your target audience is not a huge pool, but that’s rarely the case for most companies. Unless you have big budgets, traditional persona creation will be difficult for you, especially given the fact that you need to keep updating them which means more costs to your company.
In the traditional method of building buyer personas, there was no structure to it. There were a bunch of methods that could be used and its effectiveness totally depends on the processes that you chose. Does the process work for each and every company that applies it? Unfortunately, that’s not the case. If you are lucky, the process you followed and the methods you used might have been the best choice.
Even when there is ample research involved, unless the information you collect is directly from the audience themselves, then the data isn’t foolproof. So this effectively means that there is a lot of guesswork involved in the creation of traditional personas.
People are more accustomed to receiving personalized recommendations and content that anything less than it seems unsatisfactory to them. If company A sends laser-targeted content to a potential customer while company B sends generic content, guess who would be preferred by the person? Even if price is an issue, the chances of company A closing the deal is high. While traditional personas are effective in helping the business understand the kind of content that potential customers want, the effect fades off because people and markets change.
Most personas concentrate on the designation of the people. While it is possible to get some information about the people, you are limited by that data. Also, titles can be totally misleading. Someone whose title reads ‘Director’ might not really have any power when it comes to taking decisions.
A customer persona, as the definition says, is a fictional representation that is supposed to be resembling your actual customers. Based on this, you will be able to ascertain the kind of content that you need to create, the strategies that you should use, channels you should frequent and work on your messaging.
AI based tools and systems often analyze both publicly available data and internal data to generate personas for your company.
Here are some of the data types that it uses to create personas:
With the help of AI and ML, you will be able to capture a much more refined customer persona. Using this, you will be able to create personalized content for different segments of customers, thereby increasing the chances of closing them into paying customers. Here’s how AI and ML based customer persona does it:
By automating persona-building with the help of AI, not only are you saving costs, but also increasing the efficiency of the entire exercise. This is exactly why marketers and sales teams prioritize AI and ML higher than any other department in enterprises today.
Note: How does its recommendation engine save money for Netflix?
We thought the Netflix example will help you understand the importance of AI and the customer persona it creates. The brief answer is that it keeps subscribers from cancelling their services.
"Consumer research suggests that a typical Netflix member loses interest after perhaps 60 to 90 seconds of choosing, having reviewed 10 to 20 titles (perhaps 3 in detail) on one or two screens. The user either finds something of interest or the risk of the user abandoning our service increases substantially,” says a source from Netflix.
What can Netflix do in those 90 seconds?
Do you realize that the points we mentioned are closer to how AI’s customer persona can help businesses?
Marketing is about enthralling the audiences in such a way that they keep coming for more while mentally deciding to buy from you when the need comes. You do not ask your prospects to buy from you in the first interaction. You nurture them with content that will hit the right spot. Trust gets built and only then the rest falls into place. A lot of ingredients go into creating impactful marketing. Finding customer personas is the first step towards creating that impact.
Without buyer personas, you will be taking arrows from your quiver and launching them into mannequins when your aim is the infantry. When you are spending a significant amount of money into writing content, paid ads, designing creatives, etc., would you want all that effort to go to waste?
If you are not using customer personas, you are doing exactly that. By creating data-driven customer personas, you are building a strong foundation for your success. Do remember that every strand of data that you get with the help of AI and ML in creating an AI generated persona comes in near real-time. That’s powerful. It will help you understand your potential customer in a way that your competitors cannot.