AI is getting better at finding patterns in your marketing data.
That doesn’t mean you’re getting better at making decisions.
MarTech recently made an important point: AI can identify patterns, but people still have to decide what those patterns mean.
https://martech.org/ai-can-find-patterns-but-marketers-must-figure-out-what-they-mean/
I’d take it a step further.
A pattern isn’t proof of cause. And even knowing the cause doesn’t guarantee that acting on it will improve your results.
Before acting on a pattern, I ask two questions.
“And do what?”
“And then what?”
Say AI identifies customers who respond well to discounts.
And do what? Send them more discounts?
First, find out whether the discounts actually caused those purchases. Some customers might have bought anyway. If so, you didn’t generate additional sales. You gave away margin.
And then what?
I saw exactly what can happen when nobody asks that question.
I had a client who wasn’t happy with his Monday sales. It was consistently his slowest day, so he decided to offer coupons every Monday.
The data showed customers responded well to discounts. What could go wrong?
At first, the campaign looked like a success.
Monday was no longer his worst sales day.
Sunday was.
His former best sales day had become his worst.
He hadn’t simply boosted Monday sales. He’d trained existing customers to wait until Monday to buy at a discount.
Profit margins collapsed. The promotion nearly ruined his business.
He solved the problem he was measuring and created a much bigger one he wasn’t.
AI will keep finding more patterns, faster. But faster analysis doesn’t produce better decisions.
Better questions do.
Before acting on the next pattern AI identifies, write down three things that could happen afterward.
Then test your idea on a small group while holding back a comparable group that receives no promotion. Measure incremental profit across the whole week, not just the day you ran the promotion.
If the additional profit doesn’t justify the cost, you have your answer.
Finding the pattern is the easy part.
Understanding the consequences of acting on it is where the real work begins.
Rock on.
Responding to AI can find patterns, but marketers must figure out what they mean, MarTech