Experience-giving pioneer RedBalloon was never intended as an IT service delivery company, but its newly formed parent group will be just that, after it picked up exclusive distribution rights to an artificial intelligence (AI) marketing platform that blew away expectations literally overnight.
That platform was Albert, developed by US and Israel-based firm Albert Technologies and applied with great success at firms like Harley Davidson, Cosabella and Made.com. Fruit giant Dole, for one, used Albert to ready 5.7 million new potential customers and drive an 87 percent increase in sales.
Those results convinced RedBalloon co-founder Naomi Simson to look into the potential of AI to improve marketing for the company. Customer acquisition costs – which used to sit around 5 cents when Simson was “mucking around with” Google AdWords years ago – had shot up to as much as $50 due to the cost and varying success rates of different forms of creative, engaging content.
“That’s unsustainable for any business,” Simson explains, “and you have to look at different ways of attracting customers. We’ve tried lots of things, but without an effective way of approaching all digital marketing, there was just so much waste. You would do one thing one day and it would work, and then it wouldn’t work the next. It’s never set and forget.”
Having heard about Albert from colleagues, Simson sourced the platform and in June linked it to the company’s customer relationship management system. The results were astounding: “Literally as soon as we plugged it in, on the day that it launched, it produced 6400 pieces of new creative for us,” she says. “Even with a team of 10 people that would take a long time.”
By analysing RedBalloon’s customer interactions and transaction history all the way back to its first AdWords campaigns in 2003, Albert’s AI engine was able to quickly learn which campaigns had been successful and which had not. It would then extrapolate that to develop new models tailored to particular customers, continually reviewing its learnings and tweaking its recommendations for the maximum chance of delivering against key performance indicators.
With “absolute focus and energy” the RedBalloon team had previously succeeded in cutting its customer acquisition costs to $28, Simson said. But within the first month using the platform, Albert reduced this to just $11 per customer, cutting the firm’s overall spend by 25 percent. By the 60-day mark, Simson said, “it had paid for itself 10 times over – and with it typically taking 90 days to get its rhythm, I’m excited to see what it can do.”
Simson is so excited, in fact, that the newly-launched Big Red Group (BRG) – an umbrella organisation that manages Red Balloon as well as Redii.com, Wrapped.com, and The Huddle – has secured exclusive distribution rights for Albert in Australia and New Zealand. The company is building up its roster of skilled staff to support the new line of business, and Simson says many have jumped at the “massive career opportunity” to work hands-on with AI in real-world deployments.
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