How to Predict Consumer Behavior Using AI Marketing (2022)
AI has transformed marketing and is only getting better.
Companies are using AI to predict consumer behavior, which can reduce the costs of marketing campaigns and increase the ROI on their advertising dollars.
You might be wondering how this works or why you should put your faith in AI marketing when it comes to predicting consumer behavior.
Let’s break down some of the ways that AI can help marketers get ahead with predictive analytics:
Artificial intelligence is a skill that can create efficiencies in marketing.
Artificial intelligence is a broad term that encompasses many different skills, but the most important one for marketers to understand is predictive analytics.
Predictive analytics allows you to understand your customers better and predict their behavior better.
This can be used for everything from understanding what products are likely to sell well in the future, to identify which customers are most likely to make repeat purchases from you.
This type of insight can help you target your customers better and improve their experience with your brand.
AI marketing reduces the effect of cognitive bias.
Cognitive biases are a tendency of the human brain to make consistent errors in thinking, acting, or judging.
These biases are considered to be deeply ingrained in our brains and affect us in nearly every aspect of our lives.
Confirmation bias is the tendency to interpret information that supports our beliefs as good and valid while interpreting opposing views as bad or invalid.
The anchoring effect is when an initial piece of information influences how we interpret subsequent data points — even if they contradict what we already know.
This can happen either positively or negatively depending on whether it’s positive or negative anchor point you start with (e.g., “I’m going to lose 10 pounds this month” vs. “I’m going to gain 10 pounds this month”).
If someone starts by saying they’re gaining weight instead of losing then there might be other factors involved like changes in hormones or microbiome which cause changes in body fat percentage.
The illusion-of-control effect occurs when people believe they have more control over outcomes than they actually do due to past successes when their success rate was high compared with how often it was low (or vice versa).
Machine learning algorithms improve segmentation and targeting.
Machine learning algorithms are especially important to marketing because they can improve your segmentation and targeting.
These two functions are essential in the consumer journey, and machine learning is a game-changer for how marketers can identify the right consumers at the right time.
Segmenting customers: Machine learning algorithms help you find new segments of customers that you might not have been aware existed before.
This can be done by looking at existing data sets (such as demographics) and running analyses on them with AI tools to find patterns between different groups of people.
Then, after identifying these segments, you can use them as part of your overall strategy for reaching out to people who share similar characteristics or interests with one another.
Targeting customers: Once you know who your audience is, it’s time to target them effectively.
When using machine learning tools in this way, marketers typically look at existing data sets again (like customer demographic information) but then use those sets as inputs into an algorithm that predicts whether someone will buy something based on certain factors like where they live and what products they’ve bought before.
This allows marketers to more accurately predict which ads will work best based on this information alone rather than having someone manually select keywords from lists based solely on guesses about what might work best in each case.
Personalization is key in marketing.
In an age when every customer expects a personalized experience, it’s crucial that you get your customers’ names and other details right, because getting someone’s name wrong can turn off customers just as easily as the wrong company logo.
But personalization goes beyond just getting someone’s name right—it also means understanding what motivates them and then using that knowledge to make sure they’re happy with their purchase from start to finish.
Your AI marketing team should be able to help you customize content based on things like location, gender, and even past purchases or behavioral data (like how often someone clicks on links).
AI marketing makes testing easier, faster, and cheaper.
AI marketing makes testing easier, faster, and cheaper.
You can test different offers, different messaging, and different content for the same offer.
You can also use AI to create content that is optimized for specific audiences (e.g., millennials vs. Gen X vs. Baby Boomers).
AI marketing can help you understand how people interact with your website or app by collecting data from their actions while they’re using it.
This helps you understand what’s working on your site or app and improve it over time so users have a better experience with your brand and company as well as increase conversion rates of sales leads generated from those interactions with consumers visiting your site or using your app in some way (e-mail signups are just one example).
Understanding your customers is essential to success.
To understand them, you need to know what they want and what they don’t want.
You need to know what they think they want, and also what they think they don’t want.
The key here is that this isn’t about opinions; it’s about actual behavior. AI can help you determine specific actions your customer takes—what products or services are being purchased, how frequently these purchases are happening, where the purchases are happening (and why), etc.—and it can help you identify patterns in that data that indicate something new is happening in the market or with a certain consumer group.
Your customers don’t want to be spammed.
It’s a no-brainer that your customers don’t want to be spammed.
They don’t want to be inundated with emails and ads, bombarded with messages, or bothered by every single company in the world who wants them to buy their product or service.
This is why we need to understand consumer behavior if we want our marketing efforts to be successful.
As consumers ourselves, we know how annoying it can be when companies try too hard at getting us on board – whether it’s by using a bad template for their email campaign or by sending you an ad that’s not relevant to you at all. But what if there was an easier way?
By using AI you can get data about what your customers actually want, not just what you think they want.
AI is used to predict what your customers want in the future.
For example: If customers ask for a new feature on the website or an upgrade (like adding more memory space) to their device, then it can be predicted that they will continue asking for things like that in the future.
The same goes with spending patterns – if they spend more money than usual and buy extra stuff (or even upgrade themselves), then it’s likely that this trend will continue in the future too.
- What do they need?
- How can we help them?
By using AI we can predict which products are most likely to be bought together by different kinds of users (e.g., men vs women).
Moreover, we can also use this information to create targeted offers based on age groups/demographics as well as individual needs and wants of each customer group within our target audience population based on their past activity history data collected from multiple sources such as social media platforms including Instagram & Facebook, etc. marketing campaigns run through email or other digital channels like banner ads placed on websites visited frequently by these users – all of these activities help us build up an accurate picture about what exactly each user wants from us when shopping online!
We’ve covered a lot of ground here and hopefully you feel better equipped to use AI in your marketing.
Now that you know how AI can help improve your business, it’s time to get started!
The first step is always the hardest, but once you start seeing results from this new technology then things will snowball from there.
Good luck with your marketing and if you have any questions, you can schedule a free consultation with Barrington Sutherland here.
Thomas Barrington is an American entrepreneur, investor, and philanthropist. By the age of 32, his portfolio of companies crossed $3M in monthly revenue spanning: service, SAAS, and e-commerce. He is widely considered a growth & marketing expert and is a guest contributor on Forbes, Business Insider & Entrepreneur. Thomas now spends his time as the head of Barrington Sutherland where he helps businesses improve their digital presence, scale efficiently & multiply profits.