Why ChatGPT is a Real Threat to Businesses

The biggest problem that comes with the spread of AI assistants is that they change the way customers make purchasing decisions. In the past, customers would typically start by identifying a problem or need. Then, they would research different solutions and compare prices. Finally, they would make a purchase. This chain of customer actions is conveyed in a framework called customer awareness ladder.

AI assistants disrupt the customer awareness ladder by providing customers with immediate solutions. For example, if a customer is looking for a car service, they can simply ask ChatGPT for recommendations, and it’ll find several options that will work best for them.

With the help from AI, customers no longer have to go through the traditional research process. The user skips searching, comparing, reading reviews, and watching tutorials. Instead, they go straight to selecting a solution suggested by the AI assistant.

Businesses used customer awareness ladder to understand how they can reach customers and convince them to buy a product. Traditional marketing channels included search engines, social media, and paid marketing.

These channels were effective because they helped businesses find customers who were searching for a solution and information on how to make a choice. By creating valuable content about their products or services, businesses generated traffic and drew in those new customers.

AI assistants are changing the game. These chatbots are able to provide customers with the information they need without them even having to search for it. This means that businesses are no longer able to rely on traditional marketing channels to reach their customers.

AI assistants are having a profound impact on a wide variety of businesses. The most vulnerable are small and medium enterprises, followed by newly opened companies without an established client base.

Impact on service-based businesses

Automotive service. A customer can now ask an AI chatbot for recommendations for car service providers in their area, without having to search through online reviews or ask friends for recommendations.

Language learning. ChatGPT can provide personalized language lessons to customers, without the need for traditional tutoring services. This is a great option for people who are busy or who live in areas where there are not many language tutors available.

Travel planning. AI assistants help customers plan their entire trip, including booking flights, hotels, and activities. This saves customers time and effort, and it also ensures that they are getting the best possible deals.

Impact on product-based businesses

Businesses selling products will also feel the pressure. AI assistants already help customers choose a washing machine or a screwdriver. In the future, customers will not only choose products, but buy them using the interface of ChatGPT or Gemini.

Searching for sports equipment. Whether one is an experienced surfer or a newbie, AI chatbot can work as an informative guide. Customers get lists of essential equipment that aligns with skill levels and budgets, and find nearby locations for trying on and purchasing the gear.

Comparing home appliances. If a customer needs a new washing machine, an AI assistant compares ten top-rated models based on user requirements and preferences.

Choosing a gift for a friend. By narrowing down options based on friend preferences and past purchases, AI assistants help customers in discovering the present that speaks to their loved ones.

We’re exploring AI not just because ChatGPT is The Economist’s word of the year. With our 11+ years of experience in helping businesses thrive online, we believe that from now on, every digital strategy will involve AI in some way. That’s why over the last 2 years, we’ve followed AI evolution and how it changes business landscape.

What are your thoughts on the rise of AI assistants? What strategies do you think will be most effective in addressing these questions? If you are a business owner or a marketing professional, feel free to share your thoughts with us. We will reveal the gathered views during a live online event.

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