Doug Johnson, vice president of products at Acumatica, emphasizes that leadership needs to support a customer-driven innovation approach: Executives need to set a clear vision, drive a customer-centric culture, and allocate resources to continue serving customer needs.
We have entered a fascinating technology era where exciting new possibilities around artificial intelligence are simultaneously met with concern about unforeseen effects and consequences. And the transformative power of new AI capabilities comes with hype that every new product or feature is the next big AI innovation. In this climate of hype and confusion, the fundamental principle of understanding what customers want and giving them what they need remains critical for IT vendors to achieve lasting success.
Let's be clear: AI is coming. There is a lot of business interest and potential value in enterprises incorporating AI-powered solutions into their operations. Delivering solutions that make smart use of the latest technology and capabilities is fundamental to keeping businesses ahead. Research shows that enterprises are looking to 3 times Using these features increases the likelihood of meeting your customers' needs.
So AI can play a pivotal role in driving advanced technological developments. But these innovations must serve a specific purpose and solve real-world problems. By putting the customer first, solution providers can earn trust and be relevant and successful in this new AI era.
Here are some approaches you can take to adopt a truly customer-centric approach to better serve your customers, differentiate your product offerings, and build trust and loyalty in an increasingly competitive environment.
How customer-centricity impacts AI innovation
In January 2024, Forbes contributor David Henkin reported that customer-centric innovation creates value by focusing on addressing real-world needs and experiences. In AI, this means developing technology that solves customer pain points, improves user experience, and provides tangible benefits to businesses.
Vendors need to realize that the cost and delivery of their solutions must be designed to align with customer use cases. For example, a solution that highlights potential data and process anomalies is only useful if the cost of highlighting the problem is lower than the benefit of detecting errors earlier. An AI solution that makes sales suggestions is useless if it takes 10 minutes to process the data. And if a support chatbot makes incorrect or inappropriate suggestions, it may cost more in brand loyalty than it saves in support time.
Solution providers that put AI innovation at the core to address the real problems facing businesses today will ultimately be able to build long-term customer relationships and establish a stronger, more trusted brand.
Consider supply chain management, which involves complex challenges such as forecasting product demand, optimizing inventory levels, and streamlining logistics. Amazon employs AI algorithms Predictive inventory management forecasts product demand based on factors such as buying trends, seasonality, and market shifts. The AI system enables Amazon to make adjustments in real time, reducing operational costs and improving customer satisfaction with timely stock and delivery.
see next: How digital innovation is transforming customer experiences in manufacturing
Addressing customer concerns
Investing in AI-based solutions Top priority For many organizations, concerns remain about the impact and implications of these technologies on privacy and security. As companies strive to deliver personalized experiences through AI, they must prioritize compliance with data privacy and security regulations such as the General Data Protection Regulation (GDPR) and the California Consumer Privacy Act (CCPA). Complying with increasingly strict guidelines protects customer trust and brand credibility.
Technology vendors must also design AI-powered solutions that ensure inclusivity and accessibility. Similarly, companies that serve customers across multiple industries must consider how their solutions address the unique needs of each industry. For example, retail use cases will be different from manufacturing or distribution use cases.
Solution providers must address these concerns by continually improving and adapting the products they create. Rapid advancements in technology and ever-changing customer expectations mean that AI solutions need to be regularly updated and refined based on ongoing customer feedback.
An example of this can be seen in the home, where streaming services like Netflix can do this process well. In August 2017, Libby Plummer of Wired reported that over 80% of viewership on the Netflix platform is driven by AI recommendations, which analyze users' habits, ratings, and favorites to customize suggestions. Furthermore, Netflix leverages machine learning (ML) to guide content creation and adapt to customer feedback. Through ML algorithms, the platform identifies key attributes that drive viewer satisfaction, giving Netflix a competitive advantage in video streaming innovation and content experimentation.
Beyond this continuous feedback loop, there are additional best practices that can help vendors develop a more customer-centric approach to AI development and deployment.
A smart approach to customer-centric AI development
It starts with cultivating a customer-driven innovation philosophy that is centered around understanding and solving our customers' most pressing challenges. Digital surveys and user testing sessions allow vendors to gather direct feedback from customers and get a clearer picture of their experiences and expectations.
Below are some additional tips and best practices to help modern businesses meet the challenges that come with AI innovation.
- Understand regulations and privacy laws and take steps to keep track. In today's digital age, where data breaches and privacy concerns are rampant, customers are looking for solution providers who are adept at creating advanced AI solutions and are well-versed in evolving global privacy regulations.
- Test it regularly to make sure it's not biased. AI is prone to inherit biases in training data, which can lead to discriminatory outcomes and accessibility barriers. Regular and rigorous testing for timing and prevalence-related biases is essential to mitigate these risks.
- please take it easy: Comprehensive planning is essential for developing and implementing any new technology. The plan must clarify where and how the solution fits into your business operations. Rushing to create and release an AI product can make your business vulnerable to hidden flaws and security and privacy breaches. These issues can ultimately damage your brand's reputation and credibility.
The Leadership Role in Customer-Driven AI Innovation
These best practices can only take root in organizations that have a customer-driven approach to innovation and a customer-centric culture. This culture starts with an organization's leadership team. Leaders are in a unique position to set a clear vision for their employees and ensure that every decision and improvement leads to increased customer satisfaction. Leaders can model customer-first behaviors by encouraging and setting the tone for their teams to think from the customer's perspective, fostering empathy in problem-solving, and soliciting and implementing feedback from customer-facing teams.
The management team alsoIt sets strategic direction, allocates resources, and ensures the organization stays responsive to changing customer needs and preferences. By driving a forward-thinking, customer-centric culture, leadership can drive sustainable growth and competitive advantage in today's business environment.
To navigate the complex and evolving landscape of AI, these rapid advances in technological capabilities must be grounded in a more thoughtful, deliberate approach that addresses customer needs. Companies looking to deliver AI technologies beyond mere hype are paving the way for sustained success with principles of responsible, practical, valuable and customer-centric innovation. This approach differentiates these solution providers in a competitive field, fostering deeper connections with customers and reinforcing loyalty, trust and a strong market position.
