Artificial Intelligence (AI) and marketing company, Datasine, recently conducted research into how brands have managed to react to issues such as COVID-19 and Black Lives Matter, and pivot their marketing to show more empathy.
Here, Chris Loy, CTO at Datasine, shares his views on the findings with a specific focus on the continued challenges for SMEs and how data and AI can help them use empathy to their advantage.
2020 will probably be looked back on as a significant year of change in our history books. The economy is still feeling the aftereffects of lockdown, including potentially the largest economic recession in recorded history. At a time when businesses are fighting to keep their doors open, it is more important than ever to ensure that a brand responds empathically to highly emotive and unprecedented events, and SMEs are no exception to this. Despite being the lifeblood of the UK economy, many SMEs are facing the excruciating question of how they can keep their head above water as they become increasingly worried about the country’s economic outlook. Its never been more important to show your customers that you understand and care.
Many consumers are dealing with acute emotional distress, brought on largely by the pandemic, but also exacerbated by events such as the tragic killing of George Floyd and its subsequent civil rights movement. The prevalence of digital and social media means single societal events can trigger a wave of global consciousness in days, that the business world must react to quickly. This means there is extra pressure on brands to react to current social issues with empathic communication, or else risk causing major long-term damage to their business.
It’s something that can be extremely challenging, not least for smaller businesses that may be working with limited time and resources. While it is often seen as the job of big brands to show empathy, it is important to remember all businesses have a brand and if they’re not empathic to their customer’s needs and feelings, they will more than likely lose out.
SMEs should be looking to larger companies for a view on what lessons can be learnt. Our research shows that four in five marketers surveyed had to pivot their campaigns during the COVID-19 pandemic. Of these, 75% found doing so rapidly to be very challenging. In terms of SMEs, 63% found pivoting rapidly very challenging, while 39% felt the same about pivoting with empathy. Although SMEs may not have taken a complete 180 degree turn during the pandemic, a rapid response in some form is a crucial part of remaining able to trade. Highly emotional customers have a long memory for how brands act during times of distress and while trust can take years to build, it can be lost in the blink of an eye if a customer feels a brand doesn’t align with their views on major social issues.
2020 has been financially challenging for most businesses. Overall, marketers are achieving a 19% annual ROI on their campaigns, 6% lower than their average hopes of 25%. SMEs follow closely behind at 18%. With the pressure of mass shutdowns and staff layoffs happening around them, there is a real need for SMEs to be achieving as much ROI as possible in today’s financial climate.
Brand empathy plays a huge part in this, as overall, 3 in 4 marketers surveyed say their customer base is more sensitive to creative in marketing now, compared to six months ago. In response to the same question, 58% of SMEs agreed, while 22% of SMEs don’t have enough data to know. Creatives need to reflect the correct empathic message which can be extremely challenging to get right at a rapid pace, especially for SMEs competing with limited budget and resources. While it may be tempting for smaller business to make assumptions, it can be detrimental at a time when ROI is so critical. This is why marketers should not rely on creative alone.
While creativity is key to brand empathy, in order to get it right, SMEs should be investing in AI and data analytics from the early stages of their business. It is clear that some SMEs are catching onto the value of AI, with 34% claiming they consider it to be very valuable in terms of improving marketing performance. However, on average SMEs are using less than half of available data effectively to inform future campaigns.
The ability to capitalise on data insights and analytics can make or break a company. There is clearly still a lack of confidence within the SME sector, with 21% of SMEs claiming to have little to no confidence in their current capability to make better marketing decisions using AI. SMEs need to be talking to data experts to gain a clear understanding on the benefits AI can bring. This includes the ability to test campaigns prior to going live, something that 71% of SMEs stated they would like to be able to do.
While SMEs are competing against bigger brands, as well as having to deal with limited budgets and resources, AI can offer the framework to help them punch above their weight. One advantage SMEs have is that they are able to be agile, this gives them more scope to respond to big issues while showing empathy, provided they have the initial insight to guide them. Because of this, SMEs should see these situations as an opportunity and not just a challenge.
Responding to current events like COVID-19 and Black Lives Matter means companies must be able to adapt their message fast and try new ideas. Having access to accurate and timely data makes it easier to try new ideas, while removing the risk, allowing businesses to test and analyse what their brand should be saying, before saying it.
Traditional methods of testing, such as focus groups or A/B tests, may have been out of reach for SMEs as they require a large amount of time and resources. Data is something that almost all brands are already sitting on, making it accessible for all businesses to gain an answer right away and respond quickly to the conversation. Couple this with AI, which can pull insights out of the data and offers testing capabilities, and SMEs can then create a solid foundation for creatives to play with.
Now is the time for SMEs to fight to stay in the market. As such a crucial part of our economy, SMEs need to recognise the advantages they have over larger businesses and play to these strengths. By using data and AI, SMEs can capitalise on their agility and show empathy in a way that allows them to keep up with the competition.