Machine Customers: A Brief Introduction

What is a machine customer? A machine customer is a non-human entity that autonomously engages in transactions, like purchasing goods and services. Unlike traditional automated systems, machine customers do not strictly follow predefined rules; they can make decisions based on a variety of factors and can adapt their behavior over time. They can make transactions on behalf of a human, or even for themselves. The rather unfortunate phrase “custobots” is also used to describe machine customers, but there doesn’t seem to be much active use of this portmanteau.

In this blog post, we'll take a look at the future of machine customers and they impact they could hold.

Current State and Near-Future Growth

The presence of Machine Customers is already noticeable. For example, screen scrapers, initially used to extract data from web pages, represent early forms of Machine Customers. As technology evolves, these forms will become more sophisticated, leading to the development of bots and other frameworks capable of interacting with digital platforms. This evolution suggests that businesses need to adapt to cater to these non-human customers, which might involve providing Application Programming Interfaces (APIs) for more efficient interactions​​.

Some prognosticators believe Machine Customers will have one of the greatest impacts in economic transactions among all emerging technologies by the end of the decade.

ZDNet suggests that Machine Customers will account for a staggering trillions of dollars in revenue by 2030. Gartner, meanwhile, has reported that CEOs believe that by 2030, up to 20% of their companies’ revenue will come from Machine Customers. Gartner further projects that within two years, more than 15 billion connected products will have the potential to behave as a customers.

Gartner suggests there will be three phases of machine customers:

1. Bound Customer: Human leads, machine executes (today)
2. Adaptable Customer:  Human and machine co-lead, machine executes (2026)
3. Autonomous Customer:  Machine leads and executes (2036)

Major technology corporations are laying the groundwork for the rise of Machine Customers. The necessary technologies, like IoT and AI pattern recognition, are already in place. These technologies will be central to creating a Machine Customer economy, revolutionizing digital commerce and creating new market spaces far beyond the complexity that traditional business models can handle​​.

How Machine Customers are Different from Human Customers

There are great benefits to having Machine Customers rather than, or in addition to, human customers. Some of the traits that make Machine Customers different include:

• Efficient and methodical. Machine Customers are poised to be more efficient and effective than human customers. Human customers are often inconsistent and forgetful leading to suboptimal purchasing behaviors. In contrast, machines are observant, tireless researchers who apply logic and reason, ensuring that they are better at buying what’s necessary and avoiding unnecessary or impulsive purchases​​.
• Removal of emotion and sensory manipulation. Machines are focused on completing tasks, and won’t be influenced by the music being played in a store, odors and scents that impact human sales, or the wide variety of psychological manipulation taking place in facilities like casinos and grocery stores.
• Make use of massive amounts of data. Even with computer assistance, humans can only account for a small amount of data for decision making compared with a Machine Customer. Machine Customers can access and process unfathomable amount of data, as is becoming clear with Large Language Models.
• Mitigate the paradox of choice, decoy effect, and decision fatigue. Humans suffer from manipulative pricing strategies, nudging them towards suboptimal choices. They suffer from the effects of making too many decisions in a day and when presented with a selection of options they can end up frustrated. Machine Customers are able to avoid all of these natural tendencies of human beings.

Interest Growing in Machine Customers

Google Trends shows a clear rise in interest in the phrase “machine customers” over the past year or two, while “custobots” remains basically unused. Google Trends data is relative and represents search interest over time – there is always a “100” value, which is the peak of interest. A “50” value means the term is half as popular as the peak.

Source: Google Search Console, 12/1/2023

Meanwhile, according to Google Ads the phrase “machine customer(s)” has seen remarkable growth over the past year, especially in October 2023 when it jumped from around 200 global monthly searches on Google to around 1k. This represents a growth of +376% in the past three months. Google Ads does not use relative search interest like Trends – instead showing a more accurate representation of the actual volume of interest of Google users.

Source: Google Ads Keyword Planner, 12/1/2023

Machine Customers in the Hype Cycles

Throughout each year, Gartner publishes a variety of different hype cycles. Machine Customers has been appearing frequently in different hype cycles since 2021, although it seems mostly to be found in the Innovation Trigger phase at this point. While very few technologies move all the way from Innovation Trigger to the Plateau of Productivity – its quite possible that Machine Customers is able to achieve this distinction.

Regardless, with the recent popularity of ChatGPT and other Large Language Models, it’s almost certain that Machine Customers will rise into the Peak of Inflated Expectations (and further grow in search interest as a result).

The August 2023 Gartner Hype Cycle for Supply Chain Strategy has Machine Customer positioned in the Innovation Trigger phase, just ahead of the Digital Twin of a Customer and Generative AI.

The Gartner Hype Cycle for Artificial Intelligence back in 2021 also had Machine Customer positioned in the Innovation Trigger phrase, although somewhat further advanced than the more recent 2023 Supply Chain Strategy chart.

Interestingly, the most recent version of the Hype Cycle for Artificial Intelligence – published in August 2023 – has completely dropped Machine Customers from the analysis. This is not terribly uncommon, as concepts move in and out of different hype cycles – sometimes appearing or disappearing completely.

In an almost identical fashion, Machine Customer appeared, and then disappeared from the Hype Cycle for Customer Service and Support Technology. In this case, the technology appears to be approaching the Peak of Inflated Expectations in the 2021 version of the analysis.

In the most recent 2023 version of this hype cycle, Machine Customer is no longer present.

It will be interesting to continue watching for Machine Customers to move in and out of these and other hype cycles, and potentially into further phases, in the coming years.

Wrapping Up

The development of Machine Customers is reaching a tipping point, driven by the need to free humans for more valuable tasks and the capacity of technology to support this shift. This evolution demands that business strategists view the rise of Machine Customers as an inevitable trend and plan accordingly. The potential for improved efficiency and smarter purchasing decisions points to a future where Machine Customers play a pivotal role in shaping market dynamics and consumer behavior​​.