AI-Powered Personalization with David Edelman of Edelman Advisory

David Edelman, Executive Advisor and Senior Fellow at Harvard Business School, joined Jamie Flinchbaugh on the People Solve Problems podcast to discuss personalization and customer strategy in the age of AI. As the founder of Edelman Advisory Services, David brings over 30 years of experience as a thought leader in marketing, personalization, and technology.

David emphasized that AI in personalization goes beyond marketing to transform the entire customer experience. He explained the distinction between mass customization of the 1990s and today's AI-powered personalization. While mass customization focused on modularity and customer selection, modern personalization uses proactive data analysis to anticipate customer needs and create new value.

To illustrate this, David shared the example of Sysco, the food delivery company. Their app uses customer data to identify a restaurant's menu style, price points, geographic considerations, and purchasing patterns. Within 300 milliseconds of opening the app, Sysco can provide personalized recommendations, even suggesting new menu items that incorporate discounted ingredients from nearby warehouses. This approach has helped Sysco grow 50% faster than industry averages since launching the app.

When discussing how the C-suite should approach AI and customer engagement, David noted that while organizational structures vary, many companies now designate someone to lead customer experience initiatives. This might be a Chief Marketing Officer, Chief Experience Officer, or Chief Digital Officer. He stressed that whoever takes this role must prioritize empowering customers rather than merely manipulating them or cutting costs. Companies growing fastest through personalization consistently start with the goal of addressing customer challenges.

For executives who didn't grow up in the AI age, David recommends getting "hands dirty" with the technology. While having a strong sense of strategy remains essential, leaders need to pair this with understanding the art of the possible in AI. He shared his experience as CMO at Aetna, where he identified that customers struggled to understand their health insurance. By partnering with a digitally savvy team member, they implemented personalized videos explaining each member's specific plan. This resulted in 70% of people watching the videos and a 20% reduction in call center volume.

David addressed the challenges of integrating AI with legacy systems and data quality issues. He explained that generative AI is increasingly able to integrate disparate databases, but organizations must still prioritize data as an asset. At Sysco, for example, salespeople must input detailed account information, including menus and prices, before receiving credit for signing a new customer.

On the topic of data privacy, David noted that perceptions vary widely – "one customer's creepiness is another customer's 'wow'." He recommends small-scale, rapid-cycle testing to determine appropriate boundaries for different customer segments.

David concluded with advice for leaders looking to explore AI: spend 15 minutes daily using Large Language Models as assistants, experiment with image generation capabilities, and challenge functional teams to improve throughput by 30% using AI – not to eliminate jobs but to scale operations and create new customer value.

For more insights from David Edelman, visit his website at https://www.edelmanadvisoryservices.com, learn about his book "Personalized: Customer Strategy in the Age of AI", or connect with him on LinkedIn at https://www.linkedin.com/in/daveedelman/.