Machine Talk: How Verbal Embodiment in Conversational AI Shapes Consumer-Brand Relationships

Abstract

This research shows that AI-based conversational interfaces can have a profound impact on consumer-brand relationships. We develop a conceptual model of verbal embodiment in technology-mediated communication that integrates three key properties of human-to-human dialogue – (1) turn-taking (i.e., alternating contributions by the two parties), (2) turn-initiation (i.e., the act of initiating the next turn in a sequence), and (3) grounding between turns (i.e., acknowledging the other party’s contribution by restating or rephrasing it). These fundamental conversational properties systematically shape consumers’ perception of an AI-based conversational interface, their perception of the brand that the interface represents, and their behavior in connection with that brand. Converging evidence from four studies shows that these dialogue properties enhance the perceived humanness of the interface, which in turn promotes more intimate consumer-brand relationships and more favorable behavioral brand outcomes (greater recommendation acceptance, willingness to pay a price premium, brand advocacy, and brand loyalty). Moreover, we show that these effects are reduced in contexts requiring less mutual understanding between the consumer and the brand. This research highlights how fundamental principles of human-to-human communication can be harnessed to design more intimate consumer-brand interactions in an increasingly AI-driven marketplace.