Gaining clients’ trust in Africa can be laborious, as most transactions occur offline through unofficial retail channels. Then generative AI appears, upending businesses and consumers worldwide. The critical question that every business owner in Africa is wondering is how generative AI might increase customers’ trust in a continent where customers are primarily offline. You have good reason to be concerned if you are asking this question.
Consider Rozy, South Korea’s first computer-generated influencer that has generated over 1.8 million dollars for brands. The same year, when three South Korean television presenters were dismissed for incompetence, Rozy’s popularity soared. She claims to be a pretty 22-year-old singer, model and sustainability champion. Rozy is Calvin Klein’s brand ambassador; she responds to social media comments and holds Q and A sessions. Like other virtual influencers, Rozy is cheaper to hire and does not bully her colleagues. Similarly, South Africa has recently introduced ‘Kim Zulu,’ a much-talked-about avatar featured in new campaigns for PUMA, Kangol, Mini Cooper, and Mercedes Benz.
Yet, brand owners are right to worry about the influence of generative AI in the African consumer landscape. These platforms sometimes misrepresent customer information through fabricated content in videos, images and texts. Privacy is a big issue as African customers stay anonymous and must determine how AI uses their data. The biggest drawback is the absence of the human touch, which African customers tend to value, especially when making large ticket transactions.
Generative AI has come to stay and will disrupt business models worldwide, including in Africa. Yet, it’s not a magic pill that can deliver a customer’s trust on a platter of gold. Generative AI can erode trust among African customers; thus, it is essential to understand how to use the technology to achieve desired outcomes strategically.
So, how can brand owners in Africa use generative AI to build their customer’s trust? Insights from in-depth case studies and teaching experience reveal that the starting point is debunking three misconceptions about trust. Here are the misconceptions:
Loyal customers make trustful ones: It’s easy to think that customers who stick with or purchase a brand frequently trust it. The reality is quite different. Moniepoint Bank, a mobile banking platform in Nigeria, onboarded 215,000 users [1]into its platform in three months but later found that these users avoided making large transactions through the platform due to the fear of being victims of fraud. The brand had loyal but seemingly distrustful customers at the same time. African brands often assume loyal customers make trustful ones, but the two concepts are distinct. Loyalty expresses a customer’s commitment to a brand reflected in repeat purchases and long-lasting relationships. Conversely, trust manifests a customer’s belief that a brand will deliver its promise while acting ethically. Understanding the difference between the two concepts can assist firms in deciding on what generative AI technology can achieve or not achieve.
Trusting a brand digitally is the same as trusting it physically: Customers who trust a brand when buying offline can switch to distrusting the same brand when buying online. The perceived risk of product misrepresentation, fraud, and price manipulation when shopping online in Africa can force customers to think twice before purchasing. Some brands attempt to alley customers’ fears by supporting digital purchases with offline purchase channels. However, establishing physical outlets to support digital ones does not automatically translate to boosting a customer’s trust in a virtual platform. Few African brands understand how the blend of offline and online channels can drive customer trust. Generative AI can seamlessly integrate offline and online channels to boost a customer’s brand trust.
Premium and bottom-of-the-pyramid customers have similar trust expectations: Customers on the continent have varying aspirational levels, and their trust expectations vary with their income levels. Premium customers don’t necessarily have the exact trust expectations as bottom-of-the-pyramid customers. Brands often put all their customers in the same bucket when evaluating trust, which can be misleading. Generative AI can aid customer profiling in a way that identifies the different types of trust expectations for each segment.
Once brand owners can debunk their mistaken assumptions about consumer trust, it becomes easier to understand where generative AI can enable or hamper trust. The next step is to develop a trust-building strategy powered by generative AI technology. Here are five steps to building the right approach.
- Define your trust drivers: Trust means different things to different types of customers. Loyal customers can also be distrustful at the same time. It is essential to understand the trust expectations of the customers you serve and how they differ from loyalty expectations. Build metrics to assess your trust performance regularly. Don’t fall into the trap of thinking that trust is only built in the long run. You can use leading indicators daily to develop your customers’ trust in your brand.
- Use your distribution channels to build trust: Earning a customer’s trust is a collective effort. Don’t think you can go alone without working with your distribution channel partners. Retailers, distributors, agents and salespeople have a huge role in building trust. Each distribution channel member can deliver trustful experiences based on clearly defined indicators. Generative AI can assist distribution channel partners in achieving efficient order processing, fraud detection, stock optimisation and insight generation. Ensure you hold your channel partners accountable for driving trust by defining the right incentives and contracts that place a premium on trust.
- Communicate transparently: Brands use integrated marketing communications to apply their reach and project their propositions. A common mistake is to say many things about the brand using multiple channels rather than aiming for simplicity and transparency. Customers more easily trust brands that repeat the same clear message across various channels. Being transparent in communication is hard work, but it is an often overlooked trust builder. Generative AI can facilitate transparent communication by aggregating all the communication content into simple, clear messages that can be replicable across multiple platforms.
- Consistently meet service expectations: Offering a consistent service experience is arduous for African brands. Customers of the continent often complain that brands don’t walk their talk. For example, the authors studied petrol purchasers in Nigeria. The study found varying service standards in customers’ experience when buying petrol from stations owned by the same brand. The inconsistency in service standards fuels mistrust and can lead to reputational damage. Effective monitoring and service level agreements can support brands to deliver consistent standards. Virtual reality and other technologies can automate or even simulate service delivery standards that train and onboard customer-facing staff. The virtual reality lab of Lagos Business School offers simulation experiences that aid African brands in achieving this objective.
- Be customer-centric: Brands must demonstrate empathy by swiftly addressing customer complaints. Behind every complaint is a trust expectation and must not be taken lightly. Generative AI can personalise the customer experience by analysing customer feedback and sentiment data to improve trust-building initiatives.
There is a wise saying that artificial intelligence is tremendous, but native intelligence is more significant. It takes native intelligence to understand how generative AI can power customer trust in Africa. It is time for brands on the continent to embrace the collaborative opportunities that generative AI offers.
Authors
Uchenna Uzo, Professor of Marketing and Academic Director of the Africa Retail Academy, Lagos Business School
Ephraim Nwokporo, Research and Teaching Assistant, Lagos Business School
[1] In the press: Moniepoint: Building Trust through Routes to Market in Africa , Lagos Business School Case, December 2023
