After interviewing key industry CEOs, Jim Kramer of Mad Money thinks that AI is "like steroids for businesses". Here's 2 simple reasons why he's right.
Companies using AI for pricing dramatically outperform rivals
In experiments we have done, companies using AI to manage their pricing increase revenue by 10-20% and profit by as much as 27%. If you think about low margin industries like car rental or retail, that is astonishing. Competitors can hardly hope to keep up.
Here's just one example, of how much more money a specific car made with AI than before:
In other applications–and Kramer mentions Amazon, Netflix and Spotify in his piece (only Amazon uses it on pricing)–the impact of AI is just as profound. Pandora can't keep up with Spotify; Walmart is losing to Amazon and Netflix has changed TV and movies forever.
There's more to it than just A.I.
What else do Netflix, Amazon and Spotify have in common? They're exceptional companies–led and staffed by the world's best and brightest. They approach challenges differently and achieve more than your average company.
If you're at a company who isn't willing to use AI, have you wondered what that says about your company's culture and mindset?
Why we spend our lives building an AI for pricing
Pricing is the most, or perhaps second most important factor in the success of a business–only after the products it sells. Behind price for most businesses is math–lots of very complicated math. Math problems have answers, and artificial intelligence can solve math problems faster and more accurately than any number of humans. They can therefore sell more products, more profitably, to more consumers.
We believe AI applied to pricing will change every business and consumer it touches. Eventually, maybe the world will change as a result. But we're having fun getting it right one customer at a time.
And if f I wake up one day and realize I'm running the Skynet pricing department? I'd still start by drinking a coffee.