How the digital human industry is changing the customer relationship

Digital Reinvention
20/03/2023 Article
profile picture of Laurent François

Laurent François


Managing Partner

Virtual characters are one of the biggest digital opportunities for organisations. In China alone, tech company Baidu said that the “number of virtual people projects it’s worked on for clients has doubled since 2021”.

And the city of Beijing announced in August 2022 a plan to build up the municipal virtual people industry, following a larger plan that coined a new terminology: the digital human industry.

From a business standpoint, virtual characters provide opportunities to scale and ease relationship management what makes virtual characters so relevant at the moment is the ability to leverage three technological and behavioural shifts:

1. A better understanding of customers’ or citizens’ needs and better redirection to the right resources, thanks to deep learning

Frequently Asked Questions (FAQs) used to be limited to text-based web pages with poor user experience (UX); however, thanks to machine learning and deep learning, users today can progressively receive better, more relevant responses to their questions, providing them with the right paths to reach their personalised goals.

Virtual characters can rely on better algorithms for causal reasoning, used in probability trees, driving to better and more subtle answers or interactions. ChatGPT, for example, is a fruit of this evolution. Many early adopters are impressed by the quality of the answers, nearing what one might expect in a 1-to-1 messenger conversation.

Because this technology relies on machine learning, the optimisation of the experience depends on the critical mass of users, feeding the algorithms with more and more nuances. This is not a magic solution, but what used to require a lot of manpower to finesse customer journeys and then train employees, can actually be scaled at a very fast pace.

As the machines literally learn on the go, this creates a long-lasting asset that can be better for return on investment but, first and foremost, for customer experience.

2. Improved avatars and virtual expression

The rise of solutions like Epic Games’ MetaHuman Creator, which allows users to create their own digital characters in an intuitive and accessible environment, has deeply changed the look and feel of virtual characters. The technology leverages full body and facial motion-capture data, creating a hyper-realistic rendering. It goes so far that brands like Dove announced the release of a new course, Real Virtual Beauty Training, with Unreal Engine Education and the Centre for Appearance Research.

The virtual characters industry is booming. For businesses, this means that this kind of technology is more accessible, closer to users’ expectations, and can truly adapt to the audience, depending on the intent we’re trying to convey.

3. Democratisation of virtual/real relationships

Do you remember Tamagotchi’s virtual pets launched in 1996? Though not a new phenomenon, the fact that people start to develop real feelings with objects or virtual characters is on the rise. In Japanese, there’s even a word for it, moe.

For brands and organisations, this opens up a whole new territory for the development of their verbal identities. A brand’s tone of voice is no longer bound to social media posts but must encompass the way a virtual character speaks, answers, laughs, and reacts.

This means that data scientists, UX specialists, and machine learning experts but also sales and marketing teams have to work hand-in-hand around these projects as they can become the first touchpoint between a brand and a customer.

Pioneer organisations are exploring this new marketing approach. They’re hiring video game writers and UX writers. But they’re also auditing in a different way their strength among end-customers by asking the questions: what do people miss about the brand? When do customers fear missing out? When can the brand be a life-changer for customers?

Liveness is a key asset for brands with their customers

What lies beneath virtual characters’ importance is a new paradigm: the notion of liveness, in other words, “the quality or state of being live”.

Applying the notion of liveness to social networks and digital experiences is important to understand the drivers that make users spend so much time together online, and with brands or organisations.

One of the first precise examples of liveness in a digital experience is the Typing Awareness Indicator, launched in 1997.

You know when it says that “someone’s typing” on your Whatsapp chat, even if you don’t really see the person in front of you? This kind of liveness indicator creates a near-physical connection between users. Applying this concept to virtual characters helps in understanding why they’re attracting large audiences.

• Users can start to feel and miss fictional characters they frequently interact with. It creates habits and emotional cues. The key for powerful brands is to develop lovemarks with their communities, by establishing shared rituals for example.

• Virtual characters can leverage digital possibilities. Beyond text messages, they can play with all the creative features digital and virtual worlds have to offer, creating pleasurable experiences that have consequences in real life.

• Virtual characters may also be intertwined with “real” humans. Influencers are starting to mix their representations, in order to be able to automate some interactions with their own communities

Above all, virtual characters can provide a new way to connect with the people that matter most, your audience

Pioneer organisations are exploring this new marketing approach. They’re hiring video game writers and UX writers. But they’re also auditing in a different way their strength among end-customers by asking the questions: what do people miss about the brand? When do customers fear missing out? When can the brand be a life-changer for customers?

Virtual characters aim to bring the best of games – physical constraints can be removed, engagement tactics implemented, and reward system promoted – and the best of customer experience – a very deep knowledge of large and versatile groups of users, and the right messaging or actions to offer them.

It appears that the most sophisticated tech leap is also reinforcing a fundamental of storytelling: a good story depends on actors and actresses but also on the role you give to the audience.

This article was first published on ESCP Business School's media, The Choice

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