Marketing experts Ming-Hui Huang and Roland Rust wrote an influential article titled “Artificial Intelligence in Service” in which they theorized that there are four types of intelligences needed to perform service tasks: mechanical, analytical, intuitive, and empathetic. A key point made associated with the theory was that to perform some more advanced service tasks, artificial intelligence applications need to be able to move beyond just being mechanical and analytical to develop capacities that require intuition and empathy—and that type of intelligence needed should play a role in allocating tasks between machines/AI technology and human labor. As most of us who have dealt with chatbots for a customer service issue know, human intuition and empathy are more difficult to emulate via AI, leading this theory to make a great deal of sense.
It can be argued that Huang and Rust’s theory applies to marketing tasks beyond customer service. For example, in advertising, Amazon and Google have been masters of good targeting via effective mechanical and analytical intelligence, and AI has helped social media ad targeting immensely. Yet, applications that are more intuitive and empathetic can lead to new territory that may result in better customer response to ads by responding to emotions they are experiencing or intuitive patterns related to purchase behavior appear hold potential.
While time will tell the degree of AI advancement in the “feeling” realm and related functions, there is little question that more AI applications ere being effectively employed by many businesses, including small businesses. According to the U.S. Chamber of Commerce, the 33.5 million small businesses in the U.S., defined as those having 500 or less employees, represent 99.9% of all businesses and account for 4 % of employment and 43.5% of GDP. Thus, it is important to examine whether small businesses are making effective use of AI.
A survey of uses of AI by small business conducted by Constant Contact, a small business-focused digital marketing and automation firm, in conjunction with market research firm Ascend2, clearly documents that AI is not just for large businesses anymore. Results, reported in the company’s Small Business Now report show that 91% of small businesses who are using AI indicate that it has made their business more successful. Moreover, the study finds a strong correlation between a small company using AI and its overall success
Russ Morton, Chief Product Office of Constant Contact indicates that advances in technology have contributed to the ability of small businesses to effectively use AI. “We can’t talk about AI without acknowledging the technology breakthroughs late last year in natural language processing and large language models,” he says, “Almost overnight, it became possible to have two-way dialogue with an algorithm, and that kicked off a dramatic shift in how we use technology to process data and create content. It gave more attention to AI as a whole and made business leaders in every industry take notice. We’re more than halfway through 2023 now, and that paradigm shift has only accelerated.”
The biggest advantages of AI use reported by small business owners who use it include using technology to save time that can be devoted to other tasks, cutting down on manual mistakes, and growing faster. In addition, 28% of respondents who use AI indicated that they expect it to save them at least $5000 over the next 12 months. Notably, just 26% of small businesses say they are already investing in AI, while 44% more say they want to start using it soon, a figure that is suggestive of a sector where AI is poised to grow. The top obstacles among those interested in using AI who are not currently doing so are having only a beginner’s understanding of the benefits of AI technologies along with data security, perceived cost, and the learning curve—all obstacles that appear to be surmountable if the business is given proper guidance.
In the survey small business owners make clear that they value time savings a great deal. Findings also show that AI helps many fill orders efficiently, streamline bookkeeping, interact with customers and manage staff, among other functions. When asked what they would do with an extra hour saved by AI, 37% said they would use the time to plan what’s next for their business, while 31% said they would fine tune their overall strategy and 30% said they would improve their product or services. Notably, just 22% said they would take time for themselves, indicative of the degree to which these individuals are motivated to make their businesses succeed.
Another key finding of Constant Contact’s survey is that small business owners report that customer acquisition is their biggest challenge. In fact, 60 percent of small businesses say attracting new customers is the biggest challenge their business is currently facing, followed by marketing to a target audience (39 percent), and converting leads to sales (35 percent). These challenges point up how AI can be helpful to marketers.
Morton points to the potential of AI to help address marketing challenges, stating:
“Most small businesses are only marketers by necessity, and they are so busy running the show that it can feel overwhelming to find the time to create and manage marketing campaigns. That’s where AI and automation come in. Social media, content, and email campaign creation are the most common areas we typically see SMBs using these technologies.
Automations allow them to put some of the most common marketing tasks on autopilot – like welcome emails, reminder texts, social media posts and campaign sends. That frees up valuable time for them to focus on all the other aspects of running their business. Once they’re a bit more sophisticated, they can use automation to send personalized campaigns that are more likely to increase customer engagement and drive sales. But, automation becomes even more powerful when it’s paired with AI.
AI is smart enough to understand what individual customers are looking for, and it can draw on their behavior and preferences to recommend the best content, channel, and time to send a message. If you’re a small business owner, that type of personalization and recommendation engine is invaluable because it will enable you to send the right messages to the right people at the right time – and in the right channels. Using tools like Constant Contact, AI can even draft that message and send it automatically. “
In terms of Constant Contact’s business model, the company has developed programs for subject line testing, spam filers, automated triggers for welcome emails and abandoned cart reminders. In response to advances in technology, the company has expanded the ways it uses these technologies this year to better serve customer needs. “Think about the work it takes to create an email campaign,” observes Morton, “Our customers sometimes get stuck in that content creation phase, so we launched the first multichannel AI content generator built specifically for small businesses and nonprofits. Now, our customers can create an entire email template in seconds, complete with their unique tone and voice, and they can personalize it for each customer.”
Constant Contact has also created new automations that draw on dozens of different inputs to help SMBs determine the best times and channels to send messages to customers. Both of these innovations can alleviate some of the biggest marketing obstacles for small businesses and help them own their message from end to end.
In terms of whether companies’ concerns about data security, cost and the learning curve are justified, Morton suggests these issues are not new and that they primarily stem from lack of experience with these technologies, which are new to many small businesses in particular. Indeed, the survey found that the more time that SMBs spend with AI and automation, and the more sophisticated their marketing strategies are, the more they start to understand the benefits and want to expand the technology to other areas of their businesses.
Clearly, the table is set for more small businesses to make good use of artificial intelligence for multiple purposes, but the potential to do more efficient marketing is among the biggest opportunities.
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