How to Gain a Competitive Advantage With AI

AI has been adopted rapidly and is often seen as the key to gaining a competitive advantage in business. However, as more AI technology is packaged into off-the-shelf solutions, businesses need to think beyond ‘what’ tools they will use. To gain a real competitive advantage, we also need to imagine ‘how’ and ‘why’ we will use AI.

The AI market is projected to reach $407 billion by 2027. That’s a huge amount of growth from 2022 when it created about $86.9 billion in revenue.

As the market grows, more off-the-shelf AI solutions are becoming available. In the marketing realm, Google’s Performance Max and Demand Gen Campaigns, as well as Meta’s Advantage+ are automating many of the tedious, yet vital, aspects of campaign management. While they help brands achieve audience and message alignment easily, they are also widely available.

Generative AI tools such as ChatGPT, Jasper AI, and Midjourney are also helping brands produce more content quickly, but anyone can use them. So, before using these tools to get ahead, you should consider if they are giving you a real competitive advantage. If any brand can use them, they might just be levelling the playing field.

A competitive advantage should put you in a superior business position.

A competitive advantage is a set of conditions or circumstances that make a brand’s products or services more desirable to customers than its competitors. Out-of-the-box AI tools can’t achieve that for a business. 

AI is as good as the data and prompts that feed it. While it excels at automating routine tasks, it requires judgement, creativity, emotional intelligence, and empathy to make contextual judgements. It also needs high-quality data to make decisions based on nuanced environmental factors. So, when you are presented with AI solutions that promise a competitive edge, think about your ability to use them in a way that creates unmatched value.

If you want to figure out how to gain a competitive advantage with AI, work through the following questions:

• Who will use the technology and what conditions will empower them to use it uniquely?

• How does the tool fit within the broader context of the businesses?

• How might it be leveraged to make your brand more desirable than anything else on the market?

AI should make your business more profitable.

A comparative competitive advantage is achieved when a company can produce something more efficiently than its rivals, leading to greater profit margins. AI is great at creating efficiencies, but brands should develop unique processes and workflows around their technology to gain a competitive advantage. Implementation is just as important as the tool itself. 

AI also needs a continuous flow of the right data to perform. The brands that can obtain the best data and integrate AI with their broader technology stack at the lowest price will be able to create a sustainable competitive advantage.

For example, if you can break down data siloes in marketing, you will gain better insights, create more customer-centric campaigns, and make the most of every marketing dollar spent.

AI should help you stand out.

A differential advantage is achieved when a brand’s products or services are perceived as more unique or of higher quality than its competitors. So, if you want to leverage AI to create a competitive advantage, you should use it to free up more time for market research and improve the customer experience.

AI algorithms excel at optimising advertising campaigns. They can analyse ad performance in real time, target the right audience, and boost return on ad spend. While this does make it tempting to let AI take the lead, it’s important to monitor where your conversions are coming from.

By having a healthy mix of AI-led and manual campaigns, you can keep track of the audience and creative combinations that are delivering the best sales impact. These insights can then be used to guide brand strategy.

Let’s say you want to use marketing automation to deliver personalisation at scale. You could use the results of your campaigns to gain insights about your target market and their interests. These findings could also be leveraged in future product and brand decisions.

Maybe you want to use chatbots to answer customer service requests faster. However, you might not gain a differential competitive advantage because customers already expect quick, helpful, and relevant brand interactions. So, rather than letting customer service become lower touch and out of touch, you could try using AI to handle complex and emotionally sensitive situations in a better way.

Brands can write their own AI narrative.

If you want to leverage AI to create a sustainable competitive advantage, you need to think beyond what tools you will adopt. To unlock the true value of AI, you also need to consider when, where, how, and why it will be used.