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AI Technology in Market Research: Is It the Key to Understanding Customer Needs?

AI technology in market research

Customer data is an essential part of business, helping to inform everyday decisions and reshape plans. After all, there’s no point in trying to provide services for your customers if you don’t know what they want in the first place. With the rise of AI technologies, gathering, analyzing, and acting upon customer data is much easier now. But, these new market research methods raise some serious privacy concerns you must consider. This article will explore the benefits and challenges of AI technology in market research. You’ll also learn how to mitigate potential risks with simple tools, tips, and tricks to help you reap all the rewards AI offers.

The growing need for AI technology in market research

AI technology is changing market research significantly, leaving traditional research methods like focus groups, surveys, and data analysis in the past.

Research from Gartner has found that 79% of strategists see AI as crucial to predicted success over the next two years. If you want to stay competitive, you need to embrace these changes.

Don’t fret, though. As sophisticated and fast-moving as AI is, it is surprisingly easy to get a firm footing in the space.

Some of the benefits of using AI in market research include the following:

Interactive data collection

AI technology has revolutionized how marketers can collect data. You no longer need a paper trail of surveys—almost all your data can be collected and analyzed in real-time, 24 hours a day. Some exciting ways to use AI in gathering data include:

Chatbots: These can be a great way of engaging customers while asking and answering the questions that matter. AI technology can adjust the tone of replies, ensuring that any conversations mimic an actual conversation.

Social media: AI tools can monitor your online channels. They can also analyze interactions, demographics, reach and impressions, click-through rates, and more.

Quizzes & polls: AI technology can help brainstorm, schedule, and analyze fun interactive polls and quizzes that are not only fun to complete but also collect valuable data on customer demands, popular products and services, and more.

Personalized marketing campaigns

What good is data if you don’t act on it? Research from Salesforce found that 88% of customers say that the experience the company offers is as important as its products or services.

As more and more businesses move online, AI technology can be used to recreate the magic of in-person experiences in an entirely new way—through personalization.

Personalization is when a business engages with its customers’ needs, interests, demographics, and buying behavior and encourages brand loyalty by providing them with a one-on-one experience.

Ways in which AI can be used to create personalized experiences include:

  • Creating tiered loyalty programs that incentivize repeat purchases
  • Providing discount codes on products that customers have a genuine interest in
  • Customizing mailing lists to target customers with tailored suggestions
  • Addressing each customer by their name in correspondence

Predicted Customer Behavior

Market research is all about anticipating customer behavior. Thankfully, this is something AI technology can excel at.

AI technology can analyze all the collected data and predict variables that can be used to enhance customer experiences. For example, it could shift through customer feedback, identify common vocabulary used, and predict the emotion of the customer in question.

In this way, AI can provide a more comprehensive understanding of customer satisfaction. You could train the tool to focus on everything from behavior to brand loyalty, short and long-term purchasing intent, and more.

The challenges of using AI in market research

There are, of course, valid concerns over the speed at which AI technology is being used. Marketers must realize these to keep information safe. Consider the following:

The potential for data breaches

One of the biggest concerns with using AI technology is the potential for a data breach. After all, market research involves using vast amounts of sensitive information about your company, customers, and competitors.

By feeding AI tools this information, you could be giving up sensitive information to criminals exploiting the technology. Research from IBM found that the average cost of a data breach in 2023 was $4.45 million, proving it’s not just your reputation at stake but profits too!

Thankfully, various cyber security tools can make a difference in reducing risk and avoiding a costly cyberattack altogether. Two of the most effective include:

A virtual private network (VPN): A VPN encrypts your internet connection, masking your online activity. This allows marketers to work on sensitive work files, such as customer data, without the fear of being monitored.

Antivirus software: Antivirus software is essential to defend your business against cyberattacks. Regularly scanning for and removing infected files will prevent malware from corrupting research or stealing information and holding it to ransom.

Complying with privacy laws

As technology becomes more sophisticated, marketers must ensure that whatever AI tools they use to collect data align with legislation. Remember that you must follow the laws of the country where your customer is based.

The European Union follows the General Data Regulation (GDPR), which puts strict regulations on data collection. Legislators have agreed that, in many instances, the use of AI technology falls under GDPR.

The US, on the other hand, doesn’t have a one-law-for-all approach. But, the US President did issue an executive order on using AI. This aims to set standards to ensure AI systems are ‘safe, secure and trustworthy’ and that laws ‘support workers with ethical data protection.’

A human touch is still required

As exciting and revolutionary as AI is, marketers must remember that human input is still required to use these tools safely and achieve the best possible results.

Humans are more socially aware of changes in the industry and have critical skills needed only to collect relevant market data. AI tools are only as useful and successful as the initial prompts.

Human marketers are the brains behind the machine, being able to minimize workloads by asking the right questions. A blended approach works best—where technology does all the heavy lifting, and the people do the thinking.

Featured image provided by Pavel Danilyuk; Pexels; Thanks!

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