How to Person(ai)fy Consumer Brands
The entire structure and culture of the marketing function has been premised for more than a half-century not on technical innovation, scholarly research, or talent requirements. Rather, it was shaped largely by a restless college-dropout copywriter named Rosser Reeves. His pseudo-scientific theory, which he dubbed the Unique Selling Proposition or U.S.P., bequeathed the world many of the fixtures the world loves to loathe about advertising and commercial media: glib slogans, endless repetition, lookalike ads, and expensive cookie-cutter campaigns that dominate screens both large and small.
Today, nearly three-quarters of a century after Reeves’s heyday, his U.S.P. is meeting its deserved demise. Its terminator: AI, which is finally making advertising and marketing as flexible and differentiated as consumers are themselves.
The early focus in the marketing function has been on AI as an efficiency tool, automating such labor-intensive tasks as media procurement and creative versioning. But its most valuable current deployment is developing and managing complex consumer segmentation schemes, in ways that topple antique marketing conventions like the USP. Indeed, AI solutions already in the market are at last catapulting marketing from its dependence on one-size-fits-all strategies and executions into a more fertile and varied capability that is successfully growing some advanced brands’ revenues by as much as 50 percent. AI is enabling something that wasn’t possible during the decades of network television’s hegemony: heterogeneous content experiences built on the many personas of every brand’s audience.
Reeves’s concept of the U.S.P. was simple. He argued that every advertisement in every ad campaign should rest on “one strong claim, or one strong concept,” and that those ads should be aired repeatedly, unchanged, for years on end. He meant the guidance literally, arguing not just that strategies and slogans like “M&Ms chocolate melts in your mouth, not in your hands” should remain intact, but the specific television and print ads themselves shouldn’t be retired, either. “If 90 percent [of the audience] do not remember, the story is certainly not worn out,” Reeves counseled his clients at the Ted Bates Agency. His understanding of scale economics – under the commission system that undergirded the ad agency industry during Reeves’s ascendency, each airing of the same ad was incrementally more profitable than the last – turned his Bates agency into one of the world’s largest.
Unfortunately, brands have not fared as well from sustained adherence to the U.S.P. Consumers - not in the 1950s, and not now – aren’t the one-dimensional automatons imagined by the doyens of scientific management, reacting in the same way to the same stimuli. Focusing on a narrow, product-centric U.S.P. via mass marketing can leave incumbent brands exposed. This was the lesson taught by the first generation of “new age” brands that rose to prominence (and the S&P 500) in the 1980s and 1990s, such as Starbucks, Southwest Airlines, and Charles Schwab, whose success was built by delivering consumers emotionally engaging experiences, not through formulaic, one-way marketing communications, but through the way their employees connect with customers.
The second generation of new age brands that began flourishing around 2010 took the concept of customer experience (CX) and used digital technologies to make it all-embracing. Warby Parker in eyewear, Glossier in cosmetics, Harry’s in men’s grooming and thousands more “direct brands” flourished because their founders realized that a promiscuously available open-source supply chain had not only significantly reduced the costs of production and distribution across consumer categories but had radically cut the cost of marketing and customer service as well. This enabled them to target and serve consumer segments often overlooked during the era of U.S.P.-driven mass marketing because some potentially valuable segments were too small, too specialized, or too difficult to reach via traditional channels.
As the quality and interconnectedness of phygital experiences – occasions that blend physical plus digital interactions to reinforce greater meaning, sharing, and community that goes beyond the functional benefits of a product or service - steadily improved, brands have been better able to deliver a combination of human-to-human and digital experiences that reinforce their brand promise.
Now, thanks to AI tools already in the market, a third generation of brand innovators is emerging that combines the scale opportunities of the U.S.P. era and the personalization expectations of contemporary consumers to supercharge the returns from their marketing and CX investments.
Central to the new AI-powered capabilities that third generation brand innovators such as Hilton, Mastercard, Intuit, and Bass Pro Shops are building is the concept of personas, but with a new, more data-driven twist that elevates their value across the end-to-end customer journey.
Personas are representations of a brand’s ideal customer, based on insights into its target audience. Personas allow marketers to put the focus not just on consumers’ ability to recall attributes about the brand, but on how consumers’ experience with the brand makes them feel. Personas help marketers go beyond demographics, building deeper insights into what creates peaks along the customer journey where experiences are more memorable. It is the emotional resonance of phygital experiences that fosters meaning, sharing, and community around a brand – essential attributes in a marketing environment where two-thirds of consumers research social media before purchasing products, according to eMarketer.
Using personas to develop marketing campaigns is not new, but their deployment was limited by the cost and complexity of a marketing-media supply chain that constrained brands’ flexibility. Historically, personas were based on qualitative and quantitative research done before launching a product or a marketing campaign in which companies place big bets on the costs to design, develop, and scale them across customers. AI tools significantly lower the cost and organizational complexity of utilizing personas, and have been central to third generation brand innovators’ focus on CX as a winning marketing strategy.
First and foremost, AI tools developed by such pioneers as Qualtrics, Bazaarvoice, WEVO, and Optimove enable product development, distribution, customer service, and marketing teams to continuously ingest, integrate, and analyze so much data from inside the enterprise and from qualified external sources that brands are no longer forced to aim for a single ideal customer persona and develop products, services, and campaigns for it.
In the past, brands were largely forced by economics to target an inner-core of one or two loyal personas, without losing outer-core personas that purchase less frequently. Alternatively, marketers would find ways to stretch the brand to drive growth with outer-core personas without alienating their inner core. Today, AI enables a continuous learning loop that extends beyond upfront design and concept testing, and allows companies to experiment with multiple, distinct customer personas and ways to reach them. Brands can serve a larger number of personas at once, in ways that reflect each persona’s unique needs, motivations, and behaviors, while still providing a coherent brand proposition overall. Brands today can use AI tools to turn multiple personas into actionable segments, where communications, services, and even product variations can be iterated and tested throughout the full customer journey.
What marketers are testing are increasingly “beyond the product” content-based experiences that resonate with their personas by fostering deeper meaning and social sharing. First, marketers can create more valuable solutions that go beyond the functional benefits of a product or service, connecting with their personas’ values and fit with emotionally meaningful occasions and life moments. Second, marketers can leverage deeper insights into how people engage with each other to foster sharing, whether via social media or word of mouth, not only among customers, but between customers and the brand’s own employees. Marketers can take a more holistic approach to how they deliver emotional peaks along the customer journey, both through their employees’ direct interactions with customers, as well as the way marketers’ teams collaborate on the design and activation of emotionally engaging customer experiences.’
Let’s dive more deeply into three mutually reinforcing ways third generation brand innovators are using AI to raise the ROI of creating and optimizing phygital experiences tailored to a broader number of personas.
First, AI tools enable marketers to generate better insights, more quickly, using their own data and other safe, privacy-protected, sources of quality data. As the cost of generating insights falls, marketers are tapping into a treasure trove of otherwise unstructured data signals such as social media, ratings and reviews, in-app and text messaging, call center conversations, emails, chat, and video, combining them with structured data signals for what consumers are doing across their path to purchase.
Third generation brands are moving beyond surveys to mine their unstructured data and integrate it with other data signals, leveraging AI from platforms like Qualtrics. Third generation brands are also engaging more closely with their customers along the customer journey to encourage them to create content and share it with one another. Beyond provoking the creation and syndication of ratings and reviews, brands now leverage AI solutions from platforms like Bazaarvoice to help them to prioritize and better engage influencers, creators, and brand enthusiasts. Brands are also modernizing their approach to user testing, using AI simulation from platforms like Wevo to test how personas engage with new products, websites, apps, and marketing campaigns. Simulation allows brands to get valuable feedback in just minutes at a fraction of the cost of traditional methods for user testing, which can be used as a complement to enrolling samples of human respondents and further validating insights developed from AI simulation.
Hilton has been a brand innovator for more than a century and has embraced phygital experiences to reinforce a stronger emotional bond with guests. From letting guests use their phones as room keys to engaging them via messaging during their stay, Hilton is investing in an AI-powered technology stack to deliver more personalized customer experiences in real-time. For example, Hilton leverages Qualtrics’ AI solutions not only to capture and analyze post-stay feedback, but to turn insights into action across a broad set of unstructured data signals, including ratings and reviews, calls to the contact center, and messaging. Engaging guests via messaging not only provides valuable insights but provides an opportunity for a more personalized experiences. These investments enable continuous improvement for the entire phygital experience, while empowering team members to act and reinforce a customer-driven culture.
Second, AI enables marketers to reinforce a culture of experimentation to optimize how personas engage with an ever-expanding variety of content. Experimentation was anathema in the era of the U.S.P.; the costs of manufacturing, distribution, and marketing were simply too high. Rosser Reeves liked to tell the story of a client he was entertaining on his yacht, who idly inquired of the ad agency leader what the hundred people who worked on his account did. “They keep you from changing your advertising,” Reeves replied.
Insights are the creative spark that allows brands to design experiences tailored for the needs, motivations, and goals of specific personas. Today, leveraging AI as part of an agile playbook, marketers can work in sprints to optimize content through the eyes of their personas. Rather than updating their website, mobile-app, product detail pages, or marketing campaigns in infrequent cycles, they continuously test things to optimize imagery, copy, and calls to action. As AI technology matures and mainstreams, marketers also are leveraging Generative AI tools to create far greater variety of content with far less human effort (but not zero, given the need to keep humans in the loop).
Mastercard is a global brand that engages consumers through emotionally engaging advertising, but its brand’s strength is built on the hundreds of products and services it has launched to reach consumers through banks and other financial institutions. Mastercard engages millions of consumers through its advertising, but is at its core a B2B2C business, engaging its B2B customers on product innovation and experience design for cardholders. Mastercard has evolved its approach to research and testing, leveraging WEVO to test every new product before it invests further in development expenses. Mastercard has democratized access to insights and now takes a more agile approach to marketing and CX opportunities. There are hundreds of employees engaged in innovation and experience design efforts across the organization that contribute to a culture of experimentation.
Third, AI enables marketers to better target the delivery of content to the right personas at the right time and place in the customer journey. In contrast to the way most agencies use dynamic content optimization (DCO) today - employing a winner-take-all approach where what works best in the learning phase is then scaled in the earning phase - marketers are boosting their ROI by matching the right content with the right personas across touchpoints, realizing greater engagement through sustained use of higher creative variety across both the learning and earning phases.
In other words, experimentation isn’t about finding a single-best solution for a campaign; it’s a path to develop multiple adjacent campaigns for the sets of ever-evolving personas that undergird a company’s revenues. As they invest in first-party data and journey-orchestration platforms, third generation brands like Stichfix, leverage AI to continuously experiment with how best to engage customers across all their marketing touchpoints using platforms like Optimove, which combines the capabilities of a customer-data-platform (CDP) to enable analysis of integrated data sets with the capabilities of a journey orchestration platform to optimize next-best content across the customer journey.
Building a winning AI stack for marketing and CX across these three mutually reinforcing ways enables third generation brands to capture savings of up to 30% on research and testing, providing a self-funding pathway to invest in new capabilities that drive growth. Continuous experimentation leveraging these capabilities provides improvement of up to 50% in marketing campaigns.
These advances in AI are enabled by data and technology, but their advantages cannot be fully realized without a sustained leadership focus on culture. It’s critical for marketers to shift their team’s mindset, leaving behind an outdated focus on the U.S.P. and its handmaiden, the “Big Idea.” The latter, in particular, has been the battle cry of advertising for decades, but it, too, is a relic of an era when high costs forced brands to place big bets on inflexible ideas. Marketers’ focus for adopting AI also needs to go beyond automating work, reducing friction, and lowering costs along a single customer journey. Realizing the full benefits of more personalized experiences with AI-driven personas requires a sustained commitment to evolve the way teams work together inside the company and with external partners to capture and integrate the variety of customer experiences that underpin every brand.
AI enables savings on research and testing that can create a self-funding model for capability investments, as well as higher growth resulting from more emotionally engaging experiences for a broader set of personas along their customer journey. For example, one bank captured savings of 30% on its research and testing, which it used to pay for investments in its tech stack and continuous improvement in its website and mobile app. The bank drove several points of growth via higher customer retention, with only a relatively small upfront investment to get its growth flywheel spinning faster.
A travel company applied an AI-powered approach to advertising, resulting in a 50% lift in its ROI based on in-market tests comparing campaigns with content optimized through the eyes of personas to dynamic content optimization (DCO). The company is now extending the approach to other phygital experiences along the customer journey.
AI can be applied to many use cases, from product launches to marketing campaigns to mobile-first experiences. Why settle for a one-size-fits-all approach based on yesterday’s U.S.P. model, when AI enables a substantially higher ROI?
Apply to join our mastermind group on “Experience as a Winning Strategy”
Interested in diving deeper with others on experience in marketing, sales, product development, and customer success? Join the mastermind group hosted by Matt and Randall that meets monthly. In addition to monthly, virtual meetings, members in the mastermind group will receive 1:1 coaching, participation in workshops, and curated event experiences. Go to the JourneySpark’s website to learn more and apply: https://www.journeysparkconsulting.com/mastermind
Matthew Egol is the founder & CEO of JourneySpark Consulting, Podcast Host and author of The CX and Culture Connection: Creating a Growth Flywheel by Approaching Customer Experience and Culture Together. Previously, he was a partner in the Retail & Consumer practice at the consulting firms Booz & Company and PwC, where he specialized in customer experience, culture, and digital transformation.
Randall Rothenberg served for 15 years as the CEO of the IAB, the global trade association for digital marketing, media, and advertising, where he led the industry in public policy, technical standards, marketing, and thought leadership. Earlier in his career, he was the CMO and head of thought leadership at Booz & Company, a reporter and editor at The New York Times, and the author of Where the Suckers Moon: The Life and Death of an Advertising Campaign (Alfred A. Knopf, 1994).
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