Christopher S. Penn – Marketing AI Keynote Speaker

Almost Timely News, April 14, 2024: πŸ—žοΈ Generative AI Needs Better Data, Not Bigger Data

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Christopher S Penn
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Almost Timely News: πŸ—žοΈ Generative AI Needs Better Data, Not Bigger Data (2024-04-14) :: View in Browser

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Almost Timely News: πŸ—žοΈ Generative AI Needs Better Data, Not Bigger Data (2024-04-14
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What’s On My Mind: Generative AI Needs Better Data, not Bigger Data

A lot of people have made a lot of commentary about Tom Davenport’s HBR article recently on generative AI and your company data. Some of those takes have been good, some less so. But let’s dig into a bit of the nuance behind the headline.

TLDR on the article itself: companies need to have their data in order to unlock its value with generative AI, and most companies aren’t ready. That’s not a terrible surprise. Davenport (who was one of my professors at Boston University many moons ago) said:

“For generative AI to be truly valuable to companies, they need to customize vendors’ language or image models with their own data, and do the internal work to prepare their data for that integration. The relatively unstructured data that generative AI uses needs to be well-curated for accuracy, recency, uniqueness, and other attributes if generative AI models employing it are to be highly useful. Poor-quality internal data will yield poor-quality responses from genAI models.”

Broadly, this is true. But there’s a bit of nuance, a twist in this statement. The reality is that today’s models – language models in particular – are so robust that you don’t need a ton of data to make them operate well. You need enough to evoke a response from the model that fits the situation you’re using it for.

Today’s language models have read literally the entire public Internet plus books, code, news, and YouTube. They’re well versed generalists with knowledge about everything, so we don’t need to overwhelm them with lots of data. What we need to provide them is the right data to activate those models and have them provide precise, specific results.

Let’s look at a very concrete example of this. Inside your marketing organization, you probably have a CRM. Inside that CRM, you have data about your customers and their interactions with you. Do you need all the data in there to make generative AI work well for you?

No.

What you need is data about the best customers or prospects you have. And this is the linchpin: there will ALWAYS be very little of that data. Most organizations follow a normal distribution when it comes to customers. You have a small number of really amazing customers, a big selection of okay customers, and a small number of terrible customers that you try to get rid of as fast as possible.

On the marketing side, you have the same thing. You have high quality prospects, middle quality prospects, and low quality prospects – and there you may have a Pareto distribution. You might have, in aggregate, a whole bunch of terrible quality prospects, looky-loos who are never, ever going to buy anything from you and will be a complete waste of your time to market to.

When it comes to using generative AI, you don’t need a ton of data (that’s already baked into the models), you need the best data.

Suppose you wanted to build an ideal customer profile to use with your generative AI systems. Should you put all your customer data in it? Absolutely not. You should put just your best customers into the ideal customer profile – hence why it’s called ideal – and that’s probably what, ten customers at most? You could literally copy and paste that little amount of data into the consumer version of your favorite language model and get great results from it.

In fact, if you are too focused on the technology integration and you pour all your data into a generative model, you’re going to tune and train it on all your customers – including the ones you don’t want. That’s going to give you subpar results and deliver no value from generative AI.

Try this exercise. If you’re B2B, go to LinkedIn and find the profile of someone who’s a decision-maker at an ideal customer and copy the contents into a text file. If you’re B2C, go to the social media channel of your ideal customer, find their profile, and copy their last few dozen posts into a text file.

Then, with the generative AI model of your choice, have it help you build an ideal customer profile. There’s a good chance just that one customer’s data will be enough to populate a profile that will apply to 80% of your overall ideal customers because our ideal customers all pretty much want the same thing. Repeat the exercise 4 or 5 times and you’ll probably have 90-95% of the data needed for a really good ideal customer profile.

Do you need the entire enterprise’s data to do that? No. And even if you had it, a lot of it wouldn’t be the best data.

That’s key takeaway 1: your generative AI data strategy should be all about better, not bigger.

Next, let’s talk about the neural network that stores the absolute best data you could possibly have. It’s a complex network that requires some specific prompting skills and a relatively slow, inefficient way of accessing the data, but the data is the highest quality data you could possibly ask for. What neural network is this?

It’s the one between your ears, the OG neural network, the natural intelligence that begat artificial intelligence. You and the team at your company have all the information and data you could ever want trapped inside that neural network, and all you need to do is prompt it to get the data out and into an AI tool.

Here’s how: you get the beverage of your choice, sit down with the voice memos app or AI meeting assistant/transcription app of your choice, and you answer questions out loud about your current customers. You do this with a couple of people from every part of your value chain, then take the transcripts, merge them together, and feed it to the generative model of your choice. Boom. You have an ideal customer profile that’s built on data straight from the humans who work with your prospective and actual customers every day.

And then you repeat the process with your actual best customers if you can. You spend some time with them, get their permission to record the conversation, and ask them what they like about your company, what they don’t like, what they would improve, and what they would never want to change. Do that with the people at your customers, feed it into a language model, and you’ve got all the ingredients you need to have today’s modern language models turn that into actionable, useful data.

Davenport is right that the time to start preparing your data for AI is now, but it’s not about technology, not really. It’s not about CDPs or CDOs or databases, though those certainly can be situationally helpful and useful. It’s about the people you interact with – the people who work at your company, and the people who buy from your company – and what’s stored in their heads.

This, by the way, is why it’s a generally poor strategy to try firing as many people as possible and replacing them with AI. It’s short-sighted not because of the technology, but because of the vast databases of knowledge inside the heads of people that companies have largely neglected – and once you let those people go, that knowledge decays rapidly. The moment something’s not our problem any more, we mentally stop remembering what was important at an old job as we focus on what’s important at the new one.

This is key takeaway 2: your generative AI data strategy should be all about people, not technology. If you’re not putting people – and the data they carry around in their heads – first, you’re going to get very poor results from generative AI.

Finally, if you focus on people, you’re going to get less resistance to generative AI adoption. We’ve all been giving lip service to things like the voice of the customer and listening to the customer for decades. Very few people and organizations actually do. Generative AI is a good excuse to get started with this practice, and the data you gather from people will pay dividends far outside of just generative AI.

For your employees, it will show that you value their perspective, their experience, and their human relationships they have with each other and with the customers.

For your customers, it will show that you’re actually listening to them and doing something with the data you collect to make their experiences with you better.

Work with people to get the relatively small amount of best quality data your organization and customers can provide, and you’ll be able to leverage the power of generative AI right away. Yes, data governance and getting your internal data in order is vitally important foundational work, but you don’t have to wait three years, two consulting firms, and five million dollars in projects to start reaping real value from generative AI while you get your data in order. Start today with the best of your data while you clean up the rest of your data.

And shameless plug, this is literally what my company does, so if getting started with this use of generative AI is of interest, hit me up.

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ICYMI: In Case You Missed it

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4 Generative AI Power Questions: Use these four questions (the PARE framework) with any large language model like ChatGPT/Gemini/Claude etc. to dramatically improve the results. PDFs are available in US English, Latin American Spanish, and Brazilian Portuguese.

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See you next week,

Christopher S. Penn

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