Today, the price cuts are the most common issue for every industry. What is described in one recent article from my friend John Mello of the E-Commerce Times is that by and large, reducing prices to attract customers is what most vendors are doing. It states in an Adobe report that such companies, more often than not, cut prices, albeit at a loss, just to dump surfeit stocks. The expectation is that the lower prices would result in enough sales to absorb the oversupply.
But while it appears effective for the moment, it has its dangerous downside. Kink into price cuts downwards and soon enough will fade margins to nil-with the added bonus of creating a lower price expectation among customers already. This forms a vicious spiral where the price continues to drop until it might drive the company out of business due to lack of enough cushion to survive the bad stretch. So what alternatives have? Are there clear possibilities of sustaining the revenue stream without compromising the profit line? This phenomenon could consist of generative AI-the future for marketing and customer relations.
The Price War Dilemma
Economic conditions always prompt firms to lower their prices- once the economy suffers recession, inflation or due to fear of going into default by the United States. Lowering the price would hither increase sales and reduce inventories. It is again a risky business. All players in the same market adopt the same strategy; this leads to full-blown price war. Price warfare pushes firms always to slashing prices until their margins disappear, leaving no winner.
However, lacking strategic marketing knowledge aggravates the problem, and companies then resort to the old-fashioned price-cutting game. While it is easy to think that reducing price will sell more volume, experience teaches that the opposite could be true. All good competitors quickly react to lower prices flooding the market with reduced-value goods. Companies engaging in such competition without considerable cost advantages run the risk of being eliminated from the market altogether.
Market textbooks usually recommend increased marketing spending to combat falling demand. This would entail putting demand generation campaigns in the field to attract potential customers via various promotional techniques. These could entail tying products together for purchases. The entire aim designing demand derives into sales.
This looks easy in theory. In practice, however, contrary factors emerge. One is that the impact of the marketing campaign usually takes time to be realized, thus providing a much ineffective countermeasure to instant crises. Other reasons include the rapid fadeout of effectiveness of traditional advertisement channels, which are TV, prints, Google, Facebook, etc. Streaming and digital content change how consumers behave, especially the younger crowd that avoids any form of ad content, leading mush less reliable marketing through traditional channels.
Influencer marketing, which was once touted as a miracle solution, has taken a beating in recent times from scandals and the overrunning of influencers. It has reduced the ROI of influencer-led campaigns. The sheer volume of options flooding the digital space and the loss of credibility in online ads has left several firms chasing after more effective ways to form audience engagement.
Generative AI: The Solution for Marketing
Initially, social networking seemed like the solution to a modern marketer’s troubles. Pages such as Facebook were supposed to have developed an algorithm that served ads only to those who were closely targeted to fit what would interest them. However, with the surfacing of fake news, fraud, and lack of trust in ads, companies have turned away from social media under the pretense that the latter cannot be fully depended on for distribution of advertising messages.
Direct marketing appears, however, easy to do, though there are more than enough challenges awaiting the marketer. Building such infrastructure as call centers is capital intensive, and the outsourcing of operations to lower labor cost countries boomerangs when a customer feels isolated and frustrated. So, what is the solution?
Generative AI may just prove to be the elusive breakthrough that the business world has awaited for long.
Generative AI sounds like a pro at mimicking human interactions and sounding natural while developing relationships with customers at a larger scale. The beauty of generative AI is that it can personalize, have those connections beyond the ordinary, and make so much more out of a marketing perspective. Most importantly, by training an AI to understand requirements and preferences of a customer, one can shape meaningful experiences that feel more authentic and less transactional.
Through the generative AI platform, companies can engage their customers in conversations on an ongoing basis. These interactions bring with them value, be it through helping with inquiries, providing personalized product recommendations, or simply offering a pathway out of a problem. When handled in the correct way, AI-oriented engagement will further give a feeling of satisfaction on the customer’s part, as it will strengthen their link to the brand-the stronger the link, the higher the purchase probability.
In fact, AI-aided marketing can go further than customer engagement. AI can analyze customer feedback and preferences, helping the business to hone its offerings, prototype new ideas for products, and pinpoint issues before they bloom. Opportunities abound, and so does the potential impact on marketing and customer experience.
Why Now for Generative AI
Generative AI is not merely a trendy future technology, but a practical technology that can assist businesses with current market impediments. With sustained economic pressures and a shift away from traditional marketing, businesses cannot afford to wait for generative AI to be normalized. This is the era to put in place this AI-generative tool for marketing applications.
On top of that, AI may help companies in crafting far more personalized and effective marketing campaigns that will connect to the customers. This is the future of marketing, and it is now.
Tech Product of the Week: Surface Thunderbolt 4 DockB. When I switch to the product of the week, my attention focuses directly on the Surface Thunderbolt 4 Dock. The Laptop docks have come from a long way being mainly a security support in the past and keeping laptops from getting removed from desks. Most laptops have been pretty secure these days, so today the dock will soon be used to create an easier way of accessing power, Ethernet, peripherals, and multiple monitors via a single cable-all updates.
The new Surface Thunderbolt 4 Dock is the star in this collection, providing the fast throughput ideal for professionals dealing with large datasets, images, or even AI projects. It is designed to work seamlessly with Microsoft Surface Products like the Surface Laptop 5, Surface Pro 8, and Surface Pro 9, but it’s also compatible with other Intel-based laptops, though at slightly decreased performance.
For those who require additional monitor support, this dock is capable of driving up to two 4K displays, much needed while writing on a limited laptop screen during travel. Priced at $299.99, it is quite an expensive accessory but is worth every penny when used with Surface employ for enhancing productivity and convenience.
Close
The present downturn in the economy has swept away the few companies that did not follow the savage steps of price cuts while letting their profit margins get thinner and thinner. Old-school marketing methods are now all but useless; however, in generative AI, there is hope for companies that require means of connecting with customers and raising demand without incurring price wars. The future of marketing is at this stage-so embrace it before many find themselves on the wrong side of history.