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Digital Avatars Could Cut Costs for Businesses, Paper Finds

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According to an associate professor of marketing at The University of Texas at Arlington, digital avatars could be used by businesses to replace salesforce and customer service employees. The use of avatars, which are computer-generated representations of people, can also greatly reduce costs.

That professor is UTA Associate Professor Fred Miao, who is faculty fellow of the John Merrill Endowed Professorship in Consultative Sales in UTA’s College of Business. 

“An Accenture survey of online shoppers shows that 62% never completed their purchases because there was no real-time customer service or support. That Accenture survey also shows that 90% of those shoppers wanted some sort of interactive assistance during the shopping process,” said Miao. “Avatars, used in the right way, can fill this void at a fraction of the cost of hiring and training human salespeople and service employees.”

Miao’s paper titled “An Emerging Theory of Avatar Marketing” was published in the Journal of Marketing last month. 

Form and Behavioral Realism

In his paper, Miao argues that businesses that utilize avatars need to be careful of misalignment between the form and behavioral realism of their avatars. Form realism is how much an avatar looks like a human being, while behavioral realism is an avatar’s “intelligence” and whether its behavior matches a human being. 

“Getting those two parts of an avatar matched is difficult,” Miao said. “When the physical and the behavioral aspects don’t sync up, the effectiveness of using avatars can be inconsistent and at best contingent upon the context, such as perceived financial risk.”

Avatars are often most effective in complex relational exchanges with customers when they appear highly realistic and intelligent. But when avatars are used for privacy-related tasks, they are better off being less realistic with intelligence. 

Five Areas to Consider 

According to Miao, there are five interrelated areas businesses should consider when using avatars:

  1. Timing
  2. Form realism
  3. Behavioral realism
  4. Form-behavioral realism alignment
  5. Situational factors and context

“The bottom line is that with budgets being so constricted among businesses, using avatars for marketing or customer service could not only be a worthwhile management tool to consider using, but also a means of increasing sales through consistent service quality,” Miao said.

Elten Briggs is chair and associate professor in the Department of Marketing. 

“Avatars and other forms of artificial intelligence are increasingly being employed to deliver services to customers,” Briggs said. “Dr. Miao’s paper provides much needed guidance on how businesses can utilize avatars to improve customers’ service experiences.”

Alex McFarland is a historian and journalist covering the newest developments in artificial intelligence.