Sustainable CX is the fifth customer experience trend examined in our new report ‘Where AI and Marketing Collide: 2024 CX Predictions’. For some people this might be a bit of a puzzle. There’s an intuitive link between sustainability and energy use, product design, or packaging…but CX?
Perhaps surprisingly, the report confirms there’s a lot that can be achieved in the CX arena to drive sustainability – with a little help from generative AI. In fact, insight from the 200 brands and 2,000 consumers surveyed for the report shows that the importance of sustainability to customers (and thus its commercial value) may be a lot more significant than some organizations currently appreciate.
So let’s dig into this commercial agenda, how AI can supercharge CX sustainability, but also how brands need to stay mindful of the potential environmental impact of data-heavy AI martech.
Quantifying the commercial upside to sustainability
Many brands have been adopting ‘greener’ practices – spanning environmental, social, and economic agendas – and positioning themselves accordingly for years.
However, the degree to which this impacts buyer behaviors has remained unclear. Until now. The aforementioned CX report provides significant, tangible insight into the commercial importance of sustainability. Of the consumers we surveyed:
- 41% say the environmental impact of a company is a key factor that influences their purchasing decisions (38% say the same for its social impact).
- 52% would avoid purchasing from a company about which they had ethical or social concerns.
- 47% would avoid purchasing from a company if they had concerns about their environmental impact.
- 44% are willing to pay more for a product or service if they think it’s more sustainable than an alternative.
- 45% feel it’s hard to find products that are truly sustainable.
These figures show that not only does sustainability have a big impact on consumers’ buying habits – including which brands to avoid – but also that they would be willing to pay more for sustainable products.
The final statistic suggests that brands are missing out on commercial opportunities. It suggests they need to turn up their marketing volume to help would-be customers find sustainable wares.
As we said, it’s not that brands are unaware of the phenomenon. Our report confirms that 70% of brands consider sustainability to be important to their organization’s overall strategy – with 66% seeing it as important to the marketing and customer experience strategy.
Nevertheless, there appears to be a gap in understanding (or appreciation of scale) regarding sustainability’s importance to their customers. Or how they can capitalize on it. For example only:
- 46% brands agree that their customers have become increasingly concerned with sustainability.
- 54% provide information to help customers make more sustainable purchasing decisions.
With sustainability, brands have a real opportunity to build stronger relationships with their customers, relationships built upon shared values, while enhancing their commercial performance. One potential key to unlocking this opportunity in the coming months is AI.
The environmental cost of big data
Before we get into the sustainability benefits AI can help deliver, it’s important to understand that there’s another side to that coin: environmental cost.
The storage and processing of data inherent in any software requires energy – and so has a carbon footprint. The greater the intensity of processing or volume of data stored, the more energy is required. Our CX report shows that many brands currently overlook data-driven factors that negatively impact the environment.
For example, whereas 74% of organizations factor in the sustainability cost of their office energy use, only 29% consider the energy requirements of their martech software and operations. Furthermore, only 25% of brands include the amount of data processing required to train and operate AI in their environmental thinking.
But how much damage could running martech systems, addressable ad campaigns, or AI implementation really do? You might be surprised. A typical online ad campaign is estimated to emit 5.4 tons of carbon, approximately a third of what a US consumer generates every year. Also, according to Gartner, “If current AI practices remain unchanged, the energy needed for ML training and associated data storage and processing may account for up to 3.5% of global electricity consumption by 2030.”
These are not reasons to avoid embracing the data / AI revolution. Instead they are factors to consider in the context of business-wide sustainability, and areas in which to seek sustainable options or providers.
How AI can drive sustainable CX
For the purposes of this article we’ll look at sustainable CX specifically – leaving aside AI’s sustainability contributions in business functions such as energy optimization, process optimization, increasing product longevity, or reducing waste. Here are three ways AI can drive sustainable CX:
Reaching the right audiences
Mass marketing campaigns require a great deal of data processing and are energy-intensive as a result. But even addressable campaigns can be energy hungry when they involve real-time bidding at inventory auctions across multiple SSPs or DSPs.
AI platforms can optimize these processes.
Firstly, by analyzing brands’ customer data, AI systems can identify the most valuable and most engaged audience segments. Such platforms can then use predictive analytics to hyper-personalize marketing communications. Orchestrating the campaign to ensure budgets are weighted towards the most effective channels, AI systems will also analyze customer responses in real-time, updating their preferences to ensure maximum interest and relevance. By enabling precision marketing at scale, unnecessary or wasted communications are minimized – along with their energy requirements.
More sustainable end-to-end CX
By harnessing the power of AI, businesses can empower their customers to make more eco-conscious decisions. This can include offering a range of delivery options along with the environmental impact of each choice or providing customers with estimates of the carbon footprint of their purchases.
Additionally, personalized recommendations can be tailored to not only align with customer preferences but also consider local product availability, further promoting sustainable consumption.
Automated, intelligent, proactive customer service
Generative AI has started to enable chatbots and intelligent virtual assistants to evolve past the narrow confines of static responses to the most frequently posed inquiries. Advances in how conversational AI and large language models (LLMs) use natural language processing (NLP) enable AI systems to handle more complex queries. This drives energy efficiency through the reduction of customer service touch points and reliance on escalation to human counterparts.
In addition, ML algorithms can inform and tailor on-site customer experiences, using previous behaviors – such as interest in more sustainable products – to create relevant recommendations and remove any obstacles in the sustainable purchase journey.
An open and honest way forward
Leaving all other considerations aside, pursuit of sustainability in CX, operations, and beyond – supercharged with AI – has huge commercial upside potential.
However, brands need to be clear that unsubstantiated sustainability claims – or ‘greenwashing’ – will be identified quickly by an increasingly savvy, well-informed consumer. Based on our report results, this would likely result in those brands being relegated swiftly to the brands-to-avoid category.
For further insight into AI-enabled sustainable CX (along with four other key CX trends ‘Shoppable Ads’, ‘Proactive Customer Service’, ‘Healthy Acquisition and Retention’, and ‘Predictive Personalization’), make sure you download the full report ‘Where AI and Marketing Collide: 2024 CX Predictions’.
