Augmented Customer Strategy

CRM in the Digital Age

Gilles N'Goala, Virginie Pez-Perard, Isabelle Prim-Allaz, Gilles N'Goala, Virginie Pez-Perard, Isabelle Prim-Allaz

• Publisher: Wiley-ISTE
• Year: 2019
• Print ISBN: 9781786303721
• eBook ISBN: 9781119618263
• Edition: 1
• Topic: Business
• Subtopic: Processo decisionale
• Index: Business

Digital transformation is shaping a new landscape for businesses and their customers. For marketing professionals, advancing technology (artificial intelligence, robots, chatbots, etc.) and the explosion of personal data available present great opportunities to offer customers experiences that are ever richer, more fluid and more connected. For customers, this ecosystem is synonymous with new roles. They are more autonomous and have power alongside the company: they influence, innovate, punish and more. These developments push companies to implement new customer strategies. It is in this context, marked by pitfalls and paradoxes, that the authors of this book reflect on the customer relationship, what it has become and what it will be tomorrow. The book provides practitioners, teacher-researchers and Master's students with a state of the art and a prospective vision of customer relations in a digital world. It is aimed at those who want to gain an up-to-date understanding of the field and find all the keys needed to project themselves into the future.

1
Customer Strategies in the Face of New Technological, Social and Environmental Challenges

The marketing practiced and taught today is light years away from that which was practiced and taught in the 1980s. In a few decades, the discipline has been transformed to provide consumers with a new role, integrating the latest technological advances and possessing a new place in society. The transition from an industrial to a postindustrial era has, in particular, underlined the importance of services and the intangible, knowledge and information, techniques and technology, the environment and individual well-being, globalization and a new organization of work (platforms, uberization, etc.). It thus becomes impossible to talk about marketing without mentioning digital tools, big data, Service Dominant Logic perspective, artificial intelligence (AI), economy of platforms, open innovation, GAFAM (Google, Apple, Facebook, Amazon, Microsoft), NATU (Netflix, Airbnb, Tesla, Uber) and BATX (Baidu, Alibaba, Tencent, Xiaomi in China). Everyone must constantly reinvent themselves to be in direct contact with changes in society, the economy, technologies and managerial practices.

The hot topics identified by a team of researchers from the Association Française de Marketing clearly reflect these developments and the need to produce scientific knowledge that will shed light on current developments¹. In 2017–2018, Amina Béji-Bécheur, Audrey Bonnemaizon, Bérangère Brial, Jérôme Baray, Laurent Bertrandias, Madeleine Besson and Alix Poels effectively identified – based on expert opinions (practitioners and researchers) and calls for French and European research projects – what the urgent and obvious subjects to be investigated in the next few years were : (1) the impact of AI, robotization and algorithms (big data) on marketing practice, (2) the renewal of business models (platforms, blockchain), (3) the responsibility or accountability of marketing, (4) open innovation, (5) the role of marketing in the evolution toward a welfare society, (6) the construction of markets, (7) the place and legitimacy of marketing in companies (identity, skills, etc.), (8) the role of brands in society and (9) new ways of influencing and persuading (e.g. “nudge marketing”).

Without going back to the many facets of marketing, we will address these issues in the context of customer strategies implemented in organizations. By customer strategy, Volle and Delecolle [VOL 12, p 13] mean the organization’s implicit or explicit response to the various strategic issues of customer relationship management and relating to: (1) the degree of customer orientation, (2) the targets of the relational strategy (customers, employees and other stakeholders), (3) relational priorities (customer acquisition, retention, engagement), (4) the focus on customer experience and (5) the deployment of relational processes and tools (loyalty programs, CRM solutions, online communities, etc.).

We will see how much customer relationship management must be renewed to meet these new challenges. In particular, we will focus on the first four topics mentioned above, which, according to the authors, represent a true “tsunami” in marketing thinking and practice. The other five focus on marketing, brands and markets and communication in their societal and environmental dimension. We will discuss them in the last section.

1.1. AI, robotization and algorithms: what are the effects on customers?

If there is one area already impacted by AI, robotization and algorithms, it is the customer relationship. The possibilities for collecting, storing and exploiting data are increasing almost exponentially:

• – CRM (Customer relationship management) has long integrated customer data from transactional systems (orders, etc.), loyalty programs, satisfaction surveys and call centers. The development of digital marketing has therefore provided a more complete view of online customer journeys (opening, clicks, conversion, opinions, etc.). The Internet of Things (IoT) will further increase the volume of data collected, inform us about the real uses of products in private environments (cars, homes, cities) and provide a link between the real world and the virtual world. In retail in particular, Beacon technology already makes it possible to analyze mobile phone users at the point of sale – via Bluetooth or geolocation techniques – and can send them personalized and contextualized communication in real time.
• – The development of remote IT servers (IaaS for Infrastructure as a Service, PaaS for Platform as a Service, SaaS for Software as a Service), mainly the cloud, has made it possible to considerably reduce the cost of storing customer data and to benefit from unparalleled² computing power. The cloud market is growing at an annual rate of nearly 50%, and in this market, Amazon Web Services had a nearly 34% market share in 2018, which is as much as its four pursuers combined: Microsoft, IBM, Google and Alibaba.
• – Data accumulation makes it possible to consider the implementation of AI within companies. Digital and IT players have invested heavily in this field: Google with DeepMind, Amazon with Alexa, Apple with Siri, IBM with Watson, Salesforce with Einstein, Tesla with Tesla Vision, etc. AI allows you to solve problems and perform complex tasks, especially in the field of customer relations. Several concrete applications are becoming available to a larger number of companies: (1) chatbots – or conversational agents – make it possible to automate responses to the simplest requests for information and complaints; (2) predictive analysis makes it possible to predict future customer behavior, such as customer defection, and to plan for corrective actions (appointment scheduling, service recovery, etc.); (3) the personalization of content (advertising, email, SMS, etc.) is increasing according to customer profiles and their online and offline experience; (4) facial recognition can help identify customers online or at the point of sale, for example; (5) improving the user experience, for example through tasks performed independently (autonomous vehicles, for example).

Jérôme Baray provides (Box 1.1) an overview of the uses of AI in marketing and customer relationship management.

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Box 1.1. Artificial intelligence: a marketing tool for customer relations by Jérôme Baray, Professor at the University of New Caledonia and researcher at Larje

Uses of AI in customer relations… Until recently, we were talking about data analysis, multidimensional statistics, data mining, operational research and expert systems, but how would AI differ from these techniques? What will be the consequences for marketing practice and the future of customer relations?

The expression AI was proposed in 1956 by mathematician and science fiction writer John McCarthy at the Dartmouth conference in the United States, although the original mathematical and computer model of the biological neuron was designed by Warren McCulloch and Walter Pitts in 1943. Many scientists have tried to clarify the meaning and scope of AI: for some, it is defined by its works and corresponds to the ability of a computer or robot to perform tasks usually performed by an intelligent being. The AI would recognize itself in a machine simply because it is intelligent. Thus, AI would recursively define itself as the ouroboros that bites its own tail. For others, AI is defined by its tools. A distinction is usually made between weak artificial intelligence, which tends to develop increasingly autonomous digital systems because of engineering sciences, for example in the form of algorithms capable of solving complex problems. The computer program thus simulates human intelligence. Software capable of playing chess is part of this category. Strong artificial intelligence or artificial cognition would have both a true intelligent behavior with understanding one’s own reasoning while experiencing true feelings and self-awareness. These autonomous systems, such as humanoid robots, would be able to communicate with each other and with their environment and develop strategies. The notion of artificial consciousness is the subject of profound metaphysical and philosophical discussions.

Weak AI would be the one with the most immediate applications in terms of marketing and customer relations and can take nine forms of implementation: expert systems, knowledge representation, knowledge management, automatic natural language processing, formal calculation, human reasoning simulation, problem solving, pattern recognition and learning. There is a certain buzz in the media about AI, while researchers in psychology, psychiatrists, neurologists and philosophers do not even agree on the very old notion of intelligence. The writer Om Malik, a specialist in new technologies, noted in an article in the New Yorker newspaper: “Much like ‘the cloud’, ‘big data’ and ‘machine learning’, the term ‘artificial intelligence’ has been hijacked by marketers and advertisers. A lot of what people are calling AI is actually data analytics, in other words, business as usual”. How can marketing and customer relations mobilize AI tools?

The question within marketing departments will soon no longer be only to access consumer data, but to develop new super tools capable of processing this mega data (big data) aggregated with all competitors in the business sectors and centralized to be available to each of them. Only companies that have developed AI coupled with human intelligence and are able to process these continuous flows of data on consumers, their purchases, their profiles, all gathered in huge data warehouses or distributed in clusters on different web servers (nosql architecture) will be likely to win the game by adopting the best strategies and game tactics.

AI covering the many data analysis techniques has already significantly changed the way the four components of marketing mix are approached, particularly in the context of digital marketing:

• – The product: AI has made life easier for online consumers for many years by submitting specific product or service proposals in seconds on the web based on their profile. Thus, customers can both obtain an offer exactly designed as per their desires and the company has the image of a service that responds well to the expectations of its customers. The company gains an undeniable competitive edge by successfully offering the right product to the right people, where competitors are unable to align an adequate offer and thus miss out on sales. AI is not a technology of the future, but it is current and will continue to develop, particularly with the IoT. Connected objects that were once considered gadgets are becoming more accessible. Following thermostats and light bulbs, we are seeing fridges, toothbrushes, augmented reality glasses, bottle openers, sofas, mattresses, contact lenses, forks, interactive mirrors, umbrellas and even connected condoms. Distributors will be able to know in real time the contents of the refrigerator and propose to supply it at the right time from individual stock management. On the other hand, 3D printers interacting with AI will be able to revolutionize manufacturing methods that are close to custom-made, whether it is producing everyday objects, clothing or even homes because of a giant printing robot.
• – Price: various pricing software programs (Paarly, Brennus Analytics) already boast of using AI “pricing intelligence” to adjust prices in real time in different sectors of activity such as e-commerce shops, retail chains, industrial groups, food processing, energy, telecoms, tour operators and insurance companies. They monitor competitors’ prices on the net for hundreds of thousands or millions of references by analyzing trends and developments, promotions, new products, joint products, joint brands, level of competition on brands and product ranges, inventory levels, stockouts and replenishment. Smart pricing uses machine learning and competitive intelligence to practice intelligent and adapted pricing. Some researchers point out that price algorithms could naturally seek tacit agreements on pricing between competitors and therefore call for regulations in the form of audits or liability rules that could also lead to new marketing-related professions such as ethicists.
• – Promotion: the detailed knowledge of consumers through the study of their ...

Table of contents

• Cover
• Table of Contents
• Preface
• 1 Customer Strategies in the Face of New Technological, Social and Environmental Challenges
• 2 Brand Practices Faced with Augmented Consumers
• 3 The Augmented Customer Relationship: the Increasing Importance of the Customer’s Role
• 4 Innovation Augmented by the Customer: from Ideation to Diffusion
• 5 The Customer’s Voice: Toward New Listening Tools
• 6 Redesigning the Customer’s Role in a Connected World
• 7 The Augmented Customer Experience: Between Humanity and Robotization?
• 8 Designing Your Customer Experience
• 9 Customer Relationships and Digital Technologies: What Place and Role for Sales Representatives?
• 10 Engaging Reciprocity from the Complainant Customer in the Digital Age
• 11 The Firm’s Empathic Capacity: a Social Neuroscience Perspective for Managing Customer Engagement in the Digital Era
• 12 Data Marketing for Customer Intimacy
• 13 The Dark Side of Customer Relationship Management Practices in the Data Age: Managing Resistance and Perceived Intrusion for Responsible Practices
• 14 The Legal Basis for a Data Economy Based on Trust
• 15 Information Systems Security: Challenges, Vulnerabilities and Tools
• 16 Organizing the Augmented Customer Relationship
• List of Authors
• Index
• End User License Agreement