Will Your Business Survive the Custbot Revolution?

While robots, chatbots and machine learning technology are being rolled out at scale on the sell side of transactions in many global industries, the idea of using the same technology on the buy side of the equation is gaining momentum.

We are about to enter the era not just of the AI-powered robot salesperson but the era of what is being called the machine customer when intelligent AI programs or machines buy on behalf of an organization or even for themselves.

According to Gartner, more than 50% of sales and service centers will be fielding calls from machine customers by 2027, while 50% of people in advanced economies will have AI personal assistants working with them daily.

At the same time, Gartner forecasts a world where machine customers—or “custbots”—will be directly involved in, or have some influence over, trillions of dollars in purchases by 2030. The research firm says this is one of the significant new growth opportunities in global business technology.

Diagnosing problems

Take, for example, an autonomous car. From the IoT sensors fitted into that vehicle, it will know when it needs to be repaired or if it has a flat tire.

Technology is moving fast enough that it is possible to imagine a vehicle that can diagnose such problems, source parts and servicing and deal with the entire transaction autonomously.

You might be working late and realize you won't make it home to cook the family dinner. An AI personal assistant may understand this too and suggest what you might buy from a takeaway restaurant you have used before. It can then place the order, pay for you, and arrange delivery so dinner arrives just as you get home.

“More than 50% of sales and service centers will field calls from machine customers by 2027."

Some of this is happening today. Amazon has its Dash Replacement service, integrated with its Alexa digital assistant, which can be added to connected devices to simplify the re-ordering of supplies and replacement parts.

Customers track supply levels through Alexa, which sends notifications when supplies are running low, and this integrates with smart re-ordering and Amazon's payment systems and fulfillment network.

Customer experience

Gartner sees three phases to the maturing of this trend. Today, humans lead and create clearly defined choices, like business rules, which drive specific purchases.

By 2026, the forecast is for the machine customer to have more autonomy with the machine and the human sharing the decision-making. Gartner calls this the 'Adaptable Customer', which makes "optimized selections among competing products based on rules.”

The third phase of maturing, forecast for 2036, is a landscape where the ‘Autonomous Customer’ acts on inference based on rules and context. In this world, the machine customer acts autonomously.

“They have enough intelligence to act independently on behalf of humans with a high degree of discretion and own most of the process steps associated with a transaction,” according to a Gartner Insight report from a book by analysts Mark Raskino and Don Scheibenreif.

“This is not a sentient machine, but it will have its own needs to meet as well, such as maintenance and software updates, which it will address on its own.”

The report gives some examples of where this might go. It points to Aidyia, an AI-enabled automated hedge fund founded in Hong Kong that can operate with complete autonomy from human intervention.

“Aidyia reads news, analyzes large amounts of economic data, identifies obscure patterns, makes predictions about market trends and makes investments accordingly,” the report says.

So, will these machine customers be any different to humans, and will they do more for an organization beyond simply saving time?

Logical customers

Gartner identifies three ways in which they are different.

Unlike many human decisions, the decisions made by machine customers should be more logical and transparent. Human choices are often informed by bias.

A caveat here is the opacity of algorithms, which may need to be the subject of regulation and standards.

Then, there is the ability of the machine customers to process vast amounts of data in making their decisions. Their ability to do this, and do it without emotion, will lead to a world of very different choices.

Finally, the rise of machine customers has implications for customer experience.

So much effort has gone into delighting customers through investing in innovative customer experience, much of it delivered through technology.

Machine customers don't need to be delighted. They only need service-level agreements and a smooth ordering and fulfillment process.

The implications for the whole area of customer experience will be huge.

With more time on their hands, the range of customer experience in which human customers can be delighted will narrow.

This can create a two-tier world of service as machine customers do the grunt procurement, and the human customers focus on what delights them.

Lachlan Colquhoun is the Australia and New Zealand correspondent for CDOTrends and the NextGenConnectivity editor. He remains fascinated with how businesses reinvent themselves through digital technology to solve existing issues and change their business models. You can reach him at [email protected].

Image credit: iStockphoto/AndreyPopov