AI and the Ascent of Customer Expectations: From Utility to Convenience

As artificial intelligence (AI) becomes increasingly woven into the fabric of our daily lives, it is reshaping not only the products and services we use but also customers’ expectations of them. In the not-so-distant past, a product performing its basic function and providing utility was enough to ensure customer satisfaction. Not anymore. While attributes such as utility, security, reliability, or usability are non-negotiable, with the advent of artificial intelligence (AI) and other advanced technologies, customer expectations have moved up the hierarchy of customer needs. For today's customers, armed with a wide array of AI-powered products, the bar is higher - personalization and convenience have become the new standards.

Take, for instance, the AI-based recommendation engines of services like Spotify and Netflix. They offer more than just streaming capabilities - they learn from each interaction, personalizing content to each user's taste, thus creating a unique, tailored experience. Or consider voice-activated virtual assistants like Amazon's Alexa or Apple's Siri. These are not mere gadgets but personal aides that make our lives easier by automating tasks, from playing music to controlling smart home devices, all done seamlessly with just voice commands. Similarly, apps like Google Maps don't just provide directions; they predict traffic, suggest the best routes, and even locate services like restaurants or gas stations, helping users stay connected with their surroundings and make informed decisions.

This is the realm of high-level convenience where AI-based products and services are not just tools but partners that help make our lives easier, better connected, and more fulfilling.

This article proposes a Customer Hierarchy of Needs, and how customer expectations have ascended from the lowest level of Functional Utility to the highest level of Customer Convenience.

Customer Hierarchy of Needs

The pyramid below is one representation of the Hierarchy of Needs (Expectations), and there may be others that better represent specific customer segments or product categories. Each level of the hierarchy is important and non-negotiable. However, the lower levels are now a ‘given’ and are not expected to excite customers anymore, while the higher levels are where the current customer expectations lie.

Level 1: Foundational Utility (Basic Needs)

Foundational Utility is at the lowest level in the Hierarchy of Needs. It represents the basic function or benefits that a product or service offers, the core need it fulfills. It's the "what it does" that meets the initial demand of the customer. If a product or service doesn't successfully accomplish its fundamental purpose, it doesn't stand a chance to satisfy the customer's higher-level needs.

The fundamental utility of a physical bulb is to provide light. When you flip the switch, you expect the bulb to illuminate your space. If it fails to perform this primary function, other features like energy efficiency or smart connectivity become irrelevant. In the digital space, the fundamental utility of Gmail is to send and receive messages. If it fails at this, additional features like spam filtering, or integrations with Google Meet and Google Drive, cannot make up for its basic failure. In the context of AI, consider a virtual assistant like Amazon's Alexa. Its foundational utility lies in its ability to understand and execute voice commands. If it struggles with voice recognition, then additional features like music streaming, smart home control, or online shopping capabilities lose their value.

The foundational utility is about ensuring that the product or service executes its core function effectively. It's the starting point, the bare minimum, but it's also the foundation upon which all other customer expectations are built.

Level 2: Safety, Security, and Reliability

Safety, Security, and Reliability is the next level in the Hierarchy of Needs. Customers naturally expect the products and services they use to be safe, secure, and reliable. Any product, no matter how well it performs its foundational utility, will fail to satisfy if it can't provide these essential attributes.

Safety refers to the product's ability to perform its function without causing harm. For instance, a car's primary function is to transport people from one place to another, but if it's not designed with necessary safety features like seatbelts, airbags, or an anti-lock braking system, it won't meet customers' expectations.

Security, particularly in digital products, involves the protection of user data. Consider a digital payment app. Its foundational utility is to facilitate transactions, but if it can't safeguard users' financial details and personal information, it will lose trust and fail to satisfy customers.

Reliability is about the product or service functioning consistently over time. A commuter train that runs promptly as per its schedule, or a video conferencing tool like Zoom that doesn't drop calls, exemplifies reliability. Even if the product offers myriad features, unreliability can lead to customer dissatisfaction.

In the context of AI, consider a facial recognition system. It should consistently and accurately identify authorized users (reliability) without wrongly identifying or granting access to unauthorized users (safety). Furthermore, it should securely store and manage user data, protecting it from breaches (security).

As we ascend the hierarchy, it is important to note that meeting higher-level needs relies heavily on fulfilling the lower-level needs that are more foundational.

Level 3: Usability

Usability is the next level in the Hierarchy of Needs. This level is all about the product or service being user-friendly and intuitive, regardless of the user's expertise or familiarity with similar products. Usability involves the design and interface of the product or service. It's about reducing the complexity of operations, streamlining user interactions, and making the overall experience seamless and enjoyable. It doesn't matter if a product has remarkable features and provides unparalleled security; if it's not user-friendly, customers are likely to become frustrated and abandon it.

Let's take an example of a website. Even if it provides valuable content (foundational utility), ensures data protection (security), and loads quickly and reliably (reliability), if the site's navigation is complex or the design is cluttered, users may leave and seek alternatives with better usability.

In the context of AI, consider a navigation app like Waze. It doesn't just provide directions (foundational utility) and protect user data (security) with reliable performance (reliability), but it also offers an intuitive interface with real-time traffic updates and alternate route suggestions, making the navigation process easy and efficient.

As we move up the hierarchy, the expectations of customers become more sophisticated. They're no longer just seeking functional products and services, but experiences that are easy, efficient, and enjoyable.

Level 4: Personalization

As we ascend further up the Customer's Hierarchy of Needs, we arrive at Personalization, a realm where products and services are no longer one-size-fits-all. In today's age of digital immediacy and advanced technologies, customers increasingly expect experiences that are tailored to their specific needs, preferences, and habits.

Personalization is about creating a unique experience for each individual customer. It's about making them feel understood and valued, about delivering relevance in a sea of choices. No matter how functional, safe, reliable, or user-friendly a product or service is, without personalization, it may fail to make a deep connection with the customer.

Consider online shopping platforms like Amazon. Besides selling products (foundational utility), ensuring secure transactions (security), providing reliable service (reliability), and offering an easy-to-navigate platform (usability), Amazon excels in personalization. It uses customer data to recommend products based on browsing and purchase history, creating a personalized shopping experience for each user.

In the context of AI, look at streaming services like Netflix or Spotify. They leverage AI algorithms to analyze user behavior and preferences, curating personalized content recommendations. This level of personalization elevates the user experience, making customers feel understood and engaged.

Similarly, AI-powered fitness apps tailor workout and nutrition plans based on each user's fitness goals, preferences, and progress. This personal touch makes users more likely to stick with the app and achieve their fitness goals.

Personalization is rapidly becoming the new norm in customer expectations. It represents a shift from mass production to mass customization, driven by advanced technologies and AI.

Level 5: High-Level Convenience

At the apex of the Customer's Hierarchy of Needs is High-Level Convenience. It represents the ultimate goal of customer expectations in our modern, fast-paced world. A product or service should not only fulfill its purpose, ensure safety, be easy to use, and offer a personalized experience, but it should also make the customer's life easier, more connected, and more fulfilling.

High-Level Convenience is all about how a product or service can eliminate complexities, reduce effort, and save time. But it's not just about making tasks easier; it's about integrating the product or service seamlessly into the customer's life, providing value that enhances their overall lifestyle.

AI-powered virtual assistants like Amazon's Alexa or Google Assistant serve as perfect examples. They do more than recognize voice commands (foundational utility), ensure user data protection (security), function consistently (reliability), and learn user habits for improved responses (personalization). These AI assistants simplify various tasks - from setting reminders and playing music to controlling smart home devices - all through voice commands, offering unprecedented convenience.

Consider also the rise of AI-based predictive text and autocorrect features on smartphones. They not only make typing faster and more efficient, but they learn from your typing habits to provide personalized and context-specific suggestions, making communication smoother and more convenient.

Even banking has seen the convenience revolution. With AI-powered mobile banking apps, customers can manage their finances anytime, anywhere, right from their device, without the need to visit a bank branch or even sit down at a computer. It's about offering services on customers' terms, on their schedules.

As we venture further into the era of AI and advanced technology, High-Level Convenience is becoming the defining factor for customer satisfaction. It's what sets apart good products and services from great ones. As we continue to evolve and innovate, the focus will increasingly be on how we can deliver this level of convenience to meet and exceed the ever-rising customer expectations.

Conclusion: Embracing the rising Customer Expectations as the new normal

As we've journeyed through the Customer's Hierarchy of Needs, it's clear that customer expectations are not static, but dynamic and ever-increasing. The rapid advancements in AI and technology have ushered in a new era, where personalization and high-level convenience are not just desired, but expected.

However, understanding these levels is only half the battle. The true challenge lies in applying this knowledge to deliver products and services that meet these expectations. It's about going beyond the basic functionality and focusing on creating experiences that are safe, reliable, easy to use, personalized, and ultimately, convenient. Moreover, as we look toward the future, we need to be prepared for these expectations to continue to rise and evolve. With technology permeating even deeper into our lives, the customer of tomorrow will demand even more seamless integration, hyper-personalization, and unprecedented levels of convenience.

The businesses that will thrive in this new landscape will be those that recognize and adapt to these changing needs. They will harness the power of AI and technology not just to meet these heightened expectations, but to anticipate them and to stay one step ahead. In this age of AI and advanced technology, the Product Bar is constantly being raised. And as we continue to innovate and evolve, one thing remains certain - the ascent of Customer Expectations is far from over.

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This article first appeared in Product Bar Raisers

Author: Aseem Dokania