Applied AI: The Critical Importance of Recommender Engines and Smart Avatars
The characteristics of online sales are shifting. We examine the importance of a smart, AI-driven, avatar-based front end combined with a strong recommender engine.
- By Rob Enderle
- October 31, 2022
Recommender engines are smart systems that learn about existing and potential customers and provide recommendations based on what the system learns. Simultaneously, the metaverse is being positioned as the next iteration of the web -- the 3D web -- promising web interfaces that are less information-focused and more humanlike. The interaction will be focused on communicating with the user, not just presenting them with monolithic amounts of information.
In this article we’ll examine the importance of smart recommender engines and the coming changes to the web/human interface that will dramatically change how we interact with companies, products, and services in the future.
While I was at IBM, I was selected to be in their Executive Resource program. In theory, this put me in a long line to become CEO for the firm, with the odds of that actually happening being only slightly more than zero. This program gave me access to what was then a unique training program where we were taught by the leading experts in the field at the time, including Grace Hopper, who was instrumental in both applied computing in the U.S. military and helping women break into the computing segment.
One of the sessions was taught by the then-top salesperson in the country. One of the things he spoke about was how top salespeople learn about their prospects. From that knowledge, they learned how to manipulate that prospect and maximize their close rates. What he also shared, though I don’t think he intended to do this, was that if they simply focused on driving sales, they would eventually fail because they’d have an increasing number of customers who regretted their purchases, which would poison the well for additional sales. The lesson was to be true and not break faith with a prospect. You had to assure not just the purchase but subsequent satisfaction with it.
Conversational AIs coupled with increasingly capable recommender engines initially seem mostly focused on closing deals. On properties such as Facebook, this leads to a large number of customers being very unhappy with their purchases. My own experience is that much of what I’ve bought on Facebook either is never shipped or has little relation to what was pitched, so I don’t buy on Facebook anymore.
Amazon, where I continue to purchase, seems to do a far better job of assuring the experience and the quality of the result. For instance, just yesterday I received a package from Amazon where the contents had been removed. I received a replacement with little effort and even received a $5 credit for future purchases for my trouble. This required getting a person involved, but it showcases where an AI system that starts with a recommender engine and ends with an AI customer support tool could, and eventually will, assure a quality customer experience. I think this will be the future of retail.
Right now, recommender engines are front-ended by a typical text-based interface. However, over the next few years, with the advent of the metaverse and the 3D web, that front end will become avatar-focused. You’ll go to a retail site where an avatar will not only already know something about you and what you may want, it will have a conversation with you to determine what you want and be able to help you find the product or service that best fits your needs. That same avatar image (backed up by a CRM platform) will assure that you are happy with the result and quickly resolve, if not anticipate, a resolution to any issues you might have to assure a positive shopping experience.
With large language models, conversational AIs, and increasingly photorealistic avatars, companies will be able to create deeper and more lasting relationships with customers, get stronger indications for more targeted future products and services, and substantially reduce churn by increasing customer loyalty.
The future of online sales is changing. It will be driven by the availability of ever more capable recommender engines backed up by equally capable systems assuring good results and reinforcing customer loyalty while reducing customer churn. We’ll be having conversations with customers through these systems that will help us understand what new features, products or services will be the most successful, and web sites will be fronted by avatars that will become the non-living face of the company.
To suggest this will be a disruptive change would be an understatement. These AI-driven avatar front ends will spread to our devices and particularly the intelligent products we sell (particularly autonomous cars). Those of us who named our vehicles and other products will suddenly be vindicated because those smart products will increasingly interface with us as we do with each other.
Change is coming. This time it may eclipse all the computer-generated changes that preceded it.
Rob Enderle is the president and principal analyst at the Enderle Group, where he provides regional and global companies with guidance on how to create a credible dialogue with the market, target customer needs, create new business opportunities, anticipate technology changes, select vendors and products, and practice zero-dollar marketing. You can reach the author via email.