How AI Is Changing Customers, Trust, and Leadership | Mark Schaefer & Susan Drumm

Most leaders are asking how will AI change their business, but Mark Schaefer says the better question is how AI will change their customers. I'm Susan Drumm, and this is The Enlightened Executive, where your personal evolution sparks your leadership evolution. Each week we spotlight cutting-edge strategies to help executives and entrepreneurs grow in leadership and in life. Today I am honored to speak with the amazing global marketing and AI superstar, Mark Schaefer. Mark is a serial author, keynote speaker, futurist, and business consultant who has one of the top 5 marketing blogs in the world. He teaches graduate marketing classes at Rutgers University and has written 12 bestselling books. Mark's new book, How AI Changes Your Customers, describes the framework for businesses to stand out and be seen in the AI world. Mark's many global clients include Pfizer, Cisco, P&G, Dell, and the US Air Force, and he's appeared as a guest on various media channels, including CNN, CBS News, The Wall Street Journal, and The New York Times. Well, welcome, Mark, to the show. I'm excited to have you here.

Thanks for having me, Susan. I've been looking forward to it.

Yes. Well, your book is fascinating. The research is fascinating. So I want to pick off a couple of different pieces. Well, wait, let's just start global here. What do we need to know about how AI is changing our customers?

Well, it's a very interesting idea. I think it's a very profound idea because a lot of people obviously are aware of how AI can generate images, how it can change our processes. It can sort of give us new insights and, and cut a lot of time out of our work. But what we're not talking about are the psychological aspects of how AI is literally rewiring people before our eyes. And it's not a temporary thing. It's like this gonna create this permanent change and we're not gonna go back. So in the book, I talk about 8 different ideas, but I think the biggest one in terms of the implications on business is how AI is transforming the decision-making process. And the way I describe it is that we are all in the diaper business now. And what I mean by that is I have a beautiful new grandchild. He is a lovely boy. He's bright and amazing, and he is an expert pooper. He really goes through the diapers. Now he is the end user of the product, but to market to him, you've gotta go to the decision maker. Who's mom and dad. That's where the marketing is. Now, increasingly, AI is the decision maker. So we're, we're used to marketing to our end users, right?

Yes, right.

Through communications, through advertising, through branded content or whatever. But that's not really where the decision making is beginning to take place. And it's not just small things. People are beginning to use AI to try to decide what kind of car to buy, where to go on vacation, where to go to college, even who to marry. And so it, it's, it's really quite an interesting idea. And trust in AI is really increasing to quite an amazing degree, to the point where many people are beginning to have trusted, meaningful relationships with non-human entities. I'm sure You've seen in the news, right? Yes. I think the number's actually 8% of Gen Z has, like, some sort of significant romantic relationship with an AI or, or has—

Romantic.

Or has had one. Yeah. Wow. I mean, there, there have been now talk about people wanting to marry their chatbots. I, I, I predict maybe in the next 12 to 18 months, we'll start seeing a movement where we'll want to protect the rights of some of these AI avatars just like humans. So this might seem—

that is wild—

it's wild.

Let me just—

it might seem wild, might seem crazy, but the, the main point here is that represents an incredible level of trust, and this is what we're turning to to help us make our decisions in life. And there's big implications there for businesses.

It's fascinating too, because, you know, when I'm working, let's say with ChatGPT and I've moved on from ChatGPT as well. I do a lot with Claude now, but the agreeable factor of it is so high and I might point out flaws in— but that's not right because they're like, oh, right, great point. You— and it's sort of designed to continually affirm you as like you know, you're awesome, you're really good at this. Like, that's a great point. And it can be dead wrong on something. And you might point out like, that's a great point. Didn't think of that, you know? And so when it was interesting, you had the research suggests that customers rely more on AI for answers. The more they do that, their capacity for independent judgment actually declines.

Yeah, that's right. So it's this idea called cognitive offloading and I'm actually beginning to use the term cognitive surrender. There was a— one of the people featured in the book calls this self-imposed dementia. And I want to emphasize, I don't want to give the impression that I'm negative about AI or negative about technology. Because, for example, you look at AI, something like Google Maps, all right? I never want to fumble with a paper map again in my life. Go ahead and tell me where to go. That's fine. That's cognitive offloading.

Yeah.

We'll have a generation of people who will never be able to read a map. That's probably okay. But there are certain parts of this cognitive offloading or this cognitive surrender where we are going to lose, you know, very critical aspects of our humanity. You know, one of the lessons I, I learned in this book is that I think one of the most important soft skills going forward and it's related to this point, is curiosity. Because if you're curious, AI will feed you. AI will fill you with ideas and you'll go down these deep rabbit holes. It can educate you. It can teach you anything you want to learn. If you're not curious and you just get the answer, you're going to wither. And one of the things I learned, Susan, was a new term called phoresis. Phoresis is a term that it refers to what you acquire when you do the hard work. So for example, I could have used AI to write the book. Many people are. I recently learned that Amazon has put on a, put a new limit. You can only publish 3 books a day. That's the new Amazon limit.

Oh my God.

Because so many people are using AI to publish books now. However, by doing the work, by interviewing people and thinking about it and, and really like losing a lot of sleep because I'm so obsessed with these ideas, I gain wisdom. I'm doing the hard work. That's phoresis. You acquire discernment. I am able to talk to you with this new level of competency. I can talk to my customers, as in consulting. I can give a speech with a high level of confidence because I've done the work. I've acquired this wisdom. And that doesn't happen if you are not curious and you just get the answer. And unfortunately, we see that happening to an excessive degree with a lot of young people today. I hear over and over, from business leaders. What are we getting out of our colleges? I'm interviewing these people, they don't know anything because they're over-reliant on AI.

What does that mean then? So much of your book is what does that mean for companies and how they're marketing now? If— is it about trying to get AI to recognize your brand, or what do business leaders do here?

Well, that's a very big question because there are different aspects of psychology that are changing. For this, for example, specifically for this idea of cognitive offloading. Some experts are, are afraid that we're also losing human agency. We're gonna give up and say, AI can do everything better than me, so why do I even care? Now, what does that mean for businesses? That means involve customers in the process. Don't just give them the answer, help them feel like they're involved. Perhaps what you're also interested in, in your, in your question is what does this mean for search and visibility? And I go into that very deeply in the book as well. I think the good news is, Susan Drumm, that let's give it a number of maybe 90%. 90% of the marketing we're doing today is still fine. It still works. Whether you're doing this in a non-AI world or an AI world, it still sort of lands the same. There are a few differences, and one of the big ones is Search engine optimization relies heavily on links. So someone would link to you. Google kind of sees that as a vote. AI seems to ignore that. It's not really that important. What AI is looking for is social signals of proof. So you interviewing me on your wonderful podcast, AI is gonna pick up that up as validation, as social proof. If Susan Drumm thinks enough of Mark Schaefer to have him on the show, he must be okay. We're gonna, you know, we're gonna— so thank you, Susan. My AI thanks you, and I thank you. But I believe in some ways this is like the golden age of public relations, because what AI is looking for is validation from the media, from thought leaders, from academic journals. And so, that's one of the big differences between how AI and how traditional search is seeing the world.

Got it. So PR in, in its sense is really the crux forward versus—

PR is a, is a big part of it. And I'll tell you something else that's, that a lot of people are overlooking. So I recently went to France and I spent 5 days for fun in, in Paris as part of my speaking trip. And I went to ChatGPT and I said, I love art, history, nature, music. Plan a trip for me for 5 days. And I pretty much followed it exactly except I wanted to fly Delta Airlines because that's my airline, right? And I wanted to stay in a certain hotel. So brand preference is an override to AI. and we can't overlook that. The brand is more important than ever. Also, a friend of mine said, Marc, I, I, I live in France. I heard you're visiting Paris, and I know you have to eat gluten-free. Here's a bakery that I recommend. So of course I'm gonna go to that. Word of mouth marketing, more important than ever. I'll consider what AI tells me. I'll definitely do what a friend tells me.

Right.

So branding, word-of-mouth marketing, those are AI overrides that we can't overlook in our businesses today.

Can you give an example? You said something earlier about involving your customer in the decision-making. First of all, why is that important and what is an example of a brand doing that?

Well, it's in some cases I think it's gonna be important. In, in, in some cases I think a lot of customers, they don't wanna do the work. They just want the answer. But I do think there's gonna be this element of involving people in the answer, having AI come alongside the customer and involving the customer, you know, saying, oh, okay, well, let's work on this together and come up with the answer. Or just having activities that kind of build human agency. An example would be Home Depot. Home Depot is a big American chain, specializes in like DIY projects. They have workshops on the weekends that you can bring your children and learn how to build things. So that would be an example of helping your customers feel meaningful, helping them build agency in a world where they might feel disheartened and displaced in the AI world.

Yeah, great. Yeah, I had heard experiences are going to be everything.

Oh yeah.

Treats.

I'm a huge fan. Huge fan.

The human actually experiencing things.

Yeah.

And there is a pride in learning something or building a skill in this instance versus AI can handle all of it. I actually created this and it's tangible and I can hold up this painting or I can hold up this DIY project that I did.

Yeah, there's a— I saw something in the newspaper yesterday, Susan, about how young people are beginning to have parties where they're they get a vinyl album and they listen to it all throughout, you know, both sides, and they sit there and they listen to the music. So I mean, there's this idea, I think, of shared experiences that's bubbling up again, and there's big implications for businesses there too.

Yeah, yeah. Well, you also talk about for brand loyalty, you need to have a shared meaning. It's one of the most important paths going forward. What do you mean by that, having a shared meaning, and what does that strategy look like?

Yeah, that's a big, big topic today, and it's one that sort of bothers me a little bit. There's sort of an element on the web that says every business should create some, you know, political stand. We need— we want to know, you know, where you show up on a certain you know, political issue, or, you know, are you, are you woke or are you non-woke or, or whatever. And there is research that shows that connecting with customers around shared meaning can be very, very beneficial. It's one of the last ways we really see building loyalty. And there are lots of examples of brands. You know, example would be, might be Patagonia. So when I say Patagonia, you immediately think this is about environmental stewardship of responsible possible outdoor recreation. It's a very, very strong stand. That brand, you know, connects to the customers in that way. When you connect that way, customers can literally belong to the brand because they feel so strongly. Now, that can be a very, very important strategy. But one of the things I, I teach in my classes, because there's a lot of, you know, energy around this, especially with young people, I'll do this thought experiment. I'll say, all right, I want you to think of everything you've purchased in the last 2 weeks. Could be a coat, could be a sandwich, could be a plant for your office or whatever. Maybe, you know, you got your hair done or something. Now, of all those things that you purchased, how many of those things do you know where they stand on some political issue? The answer is almost always zero.

Yeah.

All right. So, I mean, you've gotta be judicious with it. It's a big decision because it obviously, it can cut both ways. Now for the hamburger, for the coat, for the haircut, there's still a lot of marketing that goes behind the scenes on, on those things. So shared meaning. Yes. The research shows, you know, if you stand behind a product because what they believe in, you can get more loyalty. They will defend your brand. They'll even pay more. But it doesn't work for every product and it doesn't need to.

Yeah, I'm gonna take a little bit of a, maybe you call it left turn here, and it's not something you covered in your book, but I have a sense that you might have a view on it, which if I'm in the field of leadership development, I wanna know for leaders, what do they need? You write about how AI is changing us, literally changing us. What do leaders need to know about how AI is changing their teams and their workforce?

I do have a very strong opinion on that, and it's this. I've grown up in big companies. I've worked with leaders of every, of every kind. And there's sort of a tradition in leadership where the leader creates strategy and thinks big thoughts. And that is true. You're responsible for the vision. You're responsible for the, you know, for the budget, the direction, and ultimately the success. And you delegate a lot of the learning, a lot of the new things to the people underneath you because you must spend your time thinking big thoughts.

And I do believe leveraging that wisdom. Yeah, yeah.

But, but, but I do believe there, there is a difference here. One of the great leadership lessons I've learned in my life is I had a great opportunity when I studied to get my MBA. I studied under Peter Drucker. Who is arguably the greatest management leader, the father of modern leadership and management. And one of the things he would talk about, he taught by the case study method, and he'd say, your job as a leader is not to have all the right answers. You can't be an expert in everything. You have to have the right questions. And I believe that is true. His wisdom has really informed my consulting style and, you know, and how I approach the world. Now, to have the right questions, you have to know what's possible, and you can't do that if you're letting other people use AI. I think this is a big difference, Susan, that to be an effective leader today, you have got to roll up your sleeves and try this stuff. You've got to immerse yourself, yourself in it. If you need to get some help, get some help, but test these models. Use voice synthesis. You try making a video, play around with it, try to break it. Look at what are the differences in the models. Really don't use it just as some sort of glorified search engine, but really manipulate it and try to break it. And you'll find someone in your organization who's immersed in this, who's geeking out on this stuff, and have them, you know, kind of shepherd you on how to use some of these things because you're not going to be able to lead your organization effectively unless you know the potential. The other difference I think is we've got to be obsessed with the bottom line. We've got to be obsessed with the return. And one of the big mistakes I think leaders are making right now is looking AI strictly through the filter of What is the ROI? This is like someone in Dubai saying, what's the ROI of air conditioning, right?

You just can't—

you just— this is like electricity. This is going to change how everyone works. And as we just talked about, you know, for almost 30 minutes, it's going to change how everybody thinks, how everybody acts in the world. And so we have got to be in the middle of this. Just no exception. No matter what your business is, no matter what kind of organization you're leading, you've got to roll up your sleeves, you've got to learn, you've got to experiment, and just encourage people to start adopting it and see what happens. Of course, you've got to look at the legal guidelines, you've got to look at the security of your data, you've got to look at, you know, your customer integrity and security and so forth, but experiment with it. And lead that sort of cultural change in your organization.

Yeah. And I've also found that there's a little bit too much of directive, like, you should be using AI. Why aren't you people using AI? How much are you using? And I go to the leader, how much are you using AI? What are you doing? Because without you seeing what those opportunities are, also, the use of AI isn't necessarily something to delegate. In this day and age, I actually believe you've got to be as connected to it and as others are getting.

Yeah, there's no such thing as a grassroots cultural change. If you're going to change the culture of the organization, it's got to come from you. You've got to show it. You've got to act on it. You've got to ask questions about it. You need to make people accountable in their performance reviews. You've got to— when you have a staff meeting, that's the first thing that's got to be on the agenda. When you walk around the plant floor, you've got to be asking questions about it. You've got to look at every organization and see, you know, how they're using it and show that how that it's important.

Yeah, I love that because even, you know, we've been doing in our team meetings, what's one thing that you created using AI? Did it save you time or it created something new? Like, let's showcase that with each other. So that's spurring ideas for other team members to create some of that. That's where the curiosity can get to, and it can really highlight, look, we want to celebrate those that are using it in this way to include the creativity or the time savings, those two aspects of it. So I'm curious, you know, looking also here, you, you mentioned the most dangerous marketer of the future is the one who uses AI and still knows when to push it side. And boy, do I believe that in terms of content creation out there. Because, you know, like we said before, this, this idea of discernment and wisdom. And like, I can tell, I've done so many design agendas before, detailed ones, like 20-page documents. When I have AI start to craft it, like, that's not going to make sense because I'm— I have the experience of knowing what's going to work in the room and what doesn't. That's from my experience. But Now when we talk about, let's, let's extrapolate that to marketing. What do you think in terms of how people are reaching their customers? They know like when that's good to take that AI thing and when they should push it aside.

It's a topic obviously that's very deep in, in my heart. I wrote a book a few years ago. It's my, it's actually my bestselling book called Marketing Rebellion. And the subtitle of that book is The Most Human Company Wins. It sort of forces you to reflect right now. On, well, if AI is doing all this stuff and it can do it better than us, is that still really true? And I think it is. I think in the future, the most human company might be a combination of real people and AI, and that's okay. But my fear, Susan, is that we're going to over-index.

Mm-hmm.

And we have to remember that marketing our brand is everything we do and everything we don't do and every customer touchpoint becomes what people are gonna be talking, you know, about our company and our, and about our brand. And we have to be careful that if you over-automate and people can't connect with a human when they need to connect to a human, you are destroying your brand. This actually just happened to me. It just happened to me where I had a problem with a hotel. It's a long story, but the short part of it was I had a reservation at a hotel in an airport. And I couldn't get to the hotel because of the security gates were closed. So I had to sleep on a bench in the airport.

Oh my God.

Now I wrote to the hotel and I said, I want a refund because nobody told me I couldn't get to the hotel. And I just kept getting this automated response over and over and over. And I said, please, please, please, if a human being could just see the situation they'd understand. And I kept getting the same automated response. You were a no-show. Your credit card has been charged. So finally I wrote an article about it on LinkedIn and it's got thousands of thousands of views. And finally someone from the hotel wrote a note on the LinkedIn post and wrote me an email. Finally, I got a human being. That's all I need is a human being. Cause I know That human will say, wow, Mark, we really blew it there. Of course we'll give you your money back. So I mean, they're ruining their brand. People on the LinkedIn post said, I'll never stay at this hotel. You've got to know when to automate and when to keep a human in the loop.

And at least if it's automating, are you reading the data? Are you, is there some oversight or is it just off making decisions for you all the time? Right?

Yeah, one part of the feedback is, please, please, please let me talk to a human.

There should be a clue there that there's something else. So if you could leave one idea in every leader that's listening right now that they can carry into their next strategy session, thinking about either their team or their brand or how they're marketing, what would that be?

I think it would come back to this idea of the most human company wins. I think we're moving toward an age where humanity is going to be a luxury. And I think if we look for opportunities, Susan, in every touchpoint to show our smile, to show our eyes, let them hear our voice, let them show our passion, let them show our compassion, right? All I needed from that hotel was to say, oh, you had a really bad night sleeping on a bench in the Amsterdam airport. You poor guy. What could we do for you? We're going to refund your thing. And oh, here's a free night, you know, on us. Take your, or, you know, take your wife out to dinner or something. Just a little bit of understanding. And I, I would have become a fan. I would have become a fan of the brand, right? Because, you know, stuff happens. But just show your humanity in every meeting, in every complaint, in every sales call. The most human company wins. I think that's a really great mantra to go forward.

Excellent. Well, Marc, how can people learn more about you and your work?

Well, it's really easy because nobody can remember how to spell Schäferi, so you don't have to. If you can just remember businesses grow, that's my website. You can find my, my books. You can find my blog, all my social media connections there. And I'd love to hear from your fans.

Well, thank you. I found this fascinating. I can't wait to delve into more of the research that you uncovered. And if you liked this episode, you're not going to want to miss my interview with J.P. Newman, who talks about how success alone does not guarantee fulfillment. And discover why leaders need a broader definition of wealth to create freedom. Let's all lead the way. Hope you enjoyed today's episode, and I'd like to point you to the next important step. Hit the subscribe button and the bell to get notified when we release new content. I'll see you on the next episode of The Enlightened Executive.