The Term A.I. Increases Willingness to Pay
This episode might reference ProfitWell and ProfitWell Recur, which following the acquisition by Paddle is now Paddle Studios. Some information may be out of date.
Originally published: August 13th, 2018
In the last two decades our conception of A.I. has essentially been that of a Spielberg script or a Robin Williams performance - robots taking over the world. Yet, artificial intelligence and its baby cousin machine learning have actually had impressive advancements for everything from cybersecurity and healthcare to marketing and robotics.
Some of us use AI for evil though - not in creating bicentennial men and women, but as puffery in our marketing to confused consumers who just buy into the hype. So to answer Kevin’s question, we designed a pricing experiment with 10 and a half thousand software buyers.
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A.I. Drives Willingness to Pay
We asked a control group their willingness to pay for a fake sales automation product. We then asked a demographically congruent group about the same sales product, but with a variation of “with “Artificial intelligence” in the marketing copy. We changed nothing, but the marketing copy.
We found that if you include A.I. in your copy, it will boost willingness to pay by essentially 10-15%. For better or for worse, when just mentioning machine learning, willingness to pay basically didn’t move.
What does this say about humanity? I don’t know if I’m qualified to answer that question, but this isn’t really anything new when it comes to marketing speak. There’s hype and over time consumers will get more educated and the impact of the marketing speak will diminish. So, for now if you’re using AI or machine learning, put it in your marketing copy, but make sure you have the product to back it up and you’re not just selling snake oil.
That's all for this week. Want to learn more? Check out our latest episode on How Case Studies and Customer Stories Impact Willingness to Pay and subscribe to the show to get new episodes.
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You've got the questions,
and we have the data.
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This is the ProfitWell Report.
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Hey, Patrick. It's Kevin
at Refract. I'm curious.
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How does AI and machine
learning affect the willingness
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to pay for a product
and the pricing?
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00:00:18,270 --> 00:00:19,470
In the last two decades,
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00:00:19,470 --> 00:00:22,110
our conception of
artificial intelligence has essentially
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00:00:22,110 --> 00:00:25,615
been that of a Spielberg script
or a Robin Williams performance.
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00:00:25,615 --> 00:00:27,455
Robots taking over the world.
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00:00:27,455 --> 00:00:30,255
Yet artificial intelligence
and its baby cousin machine
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00:00:30,255 --> 00:00:32,870
learning have actually had
impressive advancements for
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00:00:32,870 --> 00:00:37,330
everything from cybersecurity and
health care to marketing and robotics.
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00:00:37,350 --> 00:00:41,865
Some of us use AI for evil
though, not in a bicentennial
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00:00:41,865 --> 00:00:43,465
men and women sort of way,
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00:00:43,465 --> 00:00:46,905
but as puffery in our marketing
to confuse consumers who just
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00:00:46,905 --> 00:00:48,350
buy into the hype.
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00:00:48,350 --> 00:00:49,790
So to answer Kevin's question,
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00:00:49,790 --> 00:00:52,270
we designed a pricing
experiment with ten and a half
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00:00:52,270 --> 00:00:53,870
thousand software buyers.
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00:00:53,870 --> 00:00:56,910
We asked a control group their
willingness to pay for a fake
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00:00:56,910 --> 00:00:58,275
sales automation product.
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00:00:58,275 --> 00:01:01,395
We then asked a demographically
congruent group about the same
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00:01:01,395 --> 00:01:04,275
sales product but with a
variation of quote with
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00:01:04,275 --> 00:01:06,970
artificial intelligence
in the marketing copy.
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We changed nothing except
for the marketing copy.
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00:01:10,410 --> 00:01:12,890
We found that if you
include AI in your copy,
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00:01:12,890 --> 00:01:17,105
it will boost willingness to pay by
essentially ten to fifteen percent.
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For better or for worse,
when just mentioning machine
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00:01:19,665 --> 00:01:23,280
learning, willingness to
pay basically didn't move.
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00:01:23,280 --> 00:01:25,840
So what does this
say about humanity?
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I don't know if I'm exactly
the right person qualified to
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answer that question marketing
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speak will diminish.
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So for now, if you're using AI,
marketing speak will diminish.
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00:01:40,800 --> 00:01:43,680
So for now, if you're using
AI or machine learning,
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00:01:43,680 --> 00:01:45,280
put it in your marketing copy,
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00:01:45,280 --> 00:01:48,005
but make sure you have the
product to back it up and
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you're not just
selling snake oil.
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Well, that's all for now.
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If you have a question,
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ship me an email or video to
p c at profit well dot com.
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Let's also thank Kevin from
Refract who is good at AI for
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sparking this research by
clicking the link below to give
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him a nice little shout out.
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We'll see you next week.
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This week's episode is
brought to you by ThriveHive.
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ThriveHive has everything you
need to market your business
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00:02:11,560 --> 00:02:15,160
online from advertising to
guided digital platform.
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00:02:15,160 --> 00:02:17,060
ThriveHive dot com.
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