There has been much talk about customers lately as a result of the pandemic.
That is right and understandable, given the fragile nature of business and society today. Customers are your path to recovery.
But the future may hold something different.
What if your best customers in the future aren’t even human? Will they be better for your business?
Consider the emergence of “Machine Customers” – non-human economic actors that obtain goods or services in exchange for payment. Think of smart appliances, Amazon Alexa, and autonomous cars as the leading edge of this trend.
Mark Raskino and I explore this question in Why Machine Customers May Be Better Than Human Customers, the latest in an ongoing series of research notes and presentations exploring the topic of machine customers (also known as Things as Customers).
Yes, of course – in two key ways:
Machine customers will buy based on data and logic, which will upend traditional sales and marketing practices. A large amount of conventional marketing and sales excellence relies on human initiative, emotion, and personal contact or relationships. How will this work if you are marketing to or selling to machines? Machines don’t have feelings. They will behave logically and rationally based on rules and programming.
Machine customers may be better than humans in some cases. They can process large amounts of data from a large variety of inputs, based on today’s experience with AI. They will carefully collect and weigh the data to make informed decisions for their human owners based on logic and rules. In the case of toilet paper, a human may just be looking for a familiar brand, value, comfort, availability, and maybe even images of babies and clouds. A machine would be more logical. They would analyze dispenser compatibility, enzyme/skin sensitivity information, hard water performance, and cost per foot. Machine customers don’t need to be delighted, so resources usually spent on exceeding human customer needs are used to make the machine transactions seamless.
Machine customers will be more reliable than human customers, resulting in more consistent financial benefits for companies. At home, do you forget to buy laundry detergent or bring your car in for a check-up? Does a competing demand at work push a planned purchase lower in the priority queue until you have to request emergency delivery? In truth, the purchase journey for us as human customers may not be as linear as we think. We are all guilty of these lapses at one time or another (see diagram below).
Machine customers may be better than humans where reliability is essential. Much like auto-replenishment is today. But it is more than that. We think machine customers will minimize waste by ordering exactly what customers need at the right time and be more predictable. This could have a positive impact on sustainability. Purchases could take the form of smaller sizes or just-in-time replenishment, depending on availability from the provider. We also believe machines are better able to find substitute products that may be geographically closer with lower shipping costs.
The possibilities (and risks) are endless, but the growth potential is real. We believe machine customers will be a viable growth opportunity for organizations as they emerge from the aftermath of the pandemic and into the next decade.
What will other ways machine customers be better than humans? We’d love to hear your thoughts.
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What is the scale for purchase behavior? What data set was used to determine human behavior? Is this really a Gartner graphic?
Hi Philip – the diagram is an illustration, not based on a set of purchase data or behavior. We know that human purchasing behavior is often not linear. The “bumblebee” line is an exaggeration.
While I agree with the positive aspect of sustainability, I am not too sure if machine customers bring bigger financial benefits to companies. To stick with your example: If a person does forget to buy laundry detergent they will go back to the store- and then (most likely) buy not only the missing item but other things as well, which results in greater financial benefits, doesn’t it?
Fair point – retailers make money on the impulse or unplanned purchases. This is something that will need to be followed over time. Thanks for commenting!
Thanks for sharing this. But Just because automation is disrupting for example in customer service doesn’t mean that the fundamentals of customer service have changed. People want to deal with real people, and they always will. But that doesn’t mean automation technologies can’t play a role, particularly with tasks most agents are happy to handoff. Get the balance right, and everyone wins especially the customer.
Thank you for your comments and could not agree more on getting the balance right. Automation has been impacting customer processes for years. If you truly are customner-centric, you will see the role machine customers will play in your business and plan accordingly.