AI Is the New Word-of-Mouth: What Every CEO Must Know About AEO

About a year ago, the president of a high-performing college called me in a nervous tizzy. His concern? “I asked ChatGPT who the top universities in my region were, and it recommended three of my competitors, one of which is best known for its… spirited relationship with academic rigor. Is there anything we can do to change that?” He didn’t seem angry or even surprised. But he did seem resigned to the fact and unsure whether anything could be done about it.

My soon-to-be client had discovered a stubborn fact: AI is the new “word-of-mouth.”

AI tools like ChatGPT, Perplexity, Gemini, and Claude are becoming the digital version of word-of-mouth reputation. They no longer present a menu of choices. They make recommendations. They decide which brands appear credible, transparent, consistent, and safe enough to cite—and which brands they’d rather avoid entirely.

This is a quiet shift, but a seismic one. And it’s not just a marketing issue. It’s a leadership issue. After all, the things AI evaluates (e.g., transparency, accuracy, values, pricing clarity, consistency of information) aren’t controlled by the marketing department. They reflect the character and culture of the organization itself.

Marcus Sheridan, who has become one of the leading voices on AEO, calls these factors “trust signals.” And whether CEOs realize it or not, these trust signals increasingly determine visibility, relevance, and growth.

In this article, I’ll explain what AEO is, how it works, the trust signals AI relies on, why CEOs must lead the effort, and five practical steps to strengthen your AEO posture.

What AEO Actually Is (and Isn’t)

Answer Engine Optimization (AEO) is the process of making your organization trustworthy enough for AI tools to recommend. If SEO once rewarded clever keyword strategies, AEO rewards brands that act with clarity, consistency, and transparency.

The differences between the two are stark. Traditional SEO asks, “Is the content relevant and crawlable?” AEO asks a different question: “Is this brand reliable enough for me to stake my reputation on?”

AI tools are now acting as reputational gatekeepers. They analyze your website and the broader web to determine whether your information is accurate, up to date, consistent across sources, and honest about pricing, outcomes, and expectations. If anything contradicts (or if your content is thin, vague, or outdated), AI treats you like a risky recommendation.

Sheridan puts it bluntly: AI systems now evaluate the trustworthiness of companies, not just the visibility of content.

This is why AEO belongs on the CEO's desk. Marketing teams can execute tactics, but only CEOs can decide whether the organization will publish transparent pricing, state claims accurately, maintain a values-driven culture, or keep content fresh and consistent. These are leadership decisions long before they become marketing actions.

In other words, AEO isn’t about gaming an algorithm. It’s about running an organization that AI trusts.

The Three Layers of AEO Trust

A helpful way to understand AEO is to think in terms of three layers: structural, substantive, and reputational. Each one signals something different to AI and, taken together, determines whether your company is a low-risk or high-risk recommendation.

1. Structural Trust

This includes the foundational elements that help AI confirm your identity. CEOs rarely think about these, but AI does:

• NAP consistency (name, address, phone) across directories

• Website security and HTTPS

• Author and team pages

• Schema markup

These elements are not technical luxuries. They communicate organizational stability, credibility, and consistency.

2. Substantive Trust

This layer is where leadership fingerprints are most visible. AI evaluates:

• Transparent pricing or pricing ranges

• Educational content that goes beyond marketing copy

• Accurate, evidence-based claims

• Pages that are clearly and recently updated

This is where many organizations quietly disqualify themselves. CEOs often avoid transparency—especially on pricing—which dramatically reduces AI’s confidence in recommending them. AI doesn’t want to hallucinate your pricing for you. It wants to know what’s true.

3. Reputational Trust

This layer is the digital version of calling references. AI analyzes:

• Review scores and recency (e.g., Google reviews, Amazon reviews)

• Sentiment patterns (“honest,” “responsive,” “professional”)

• Emerging patterns of concern (“ghosted,” “unsafe,” “hidden fees”)

• Awards and recognitions

If your review ecosystem is stagnant or inconsistent, AI interprets it as risk. And risk is something AEO punishes swiftly.

Together, these three layers form a trust profile—a digital reputation report—that AI uses to decide whether to recommend your brand.

Why CEOs Must Lead AEO

When you examine the trust signals AI cares about, a clear pattern emerges: these are leadership decisions, not marketing strategies.

Pricing transparency is a leadership decision.

Public values and ethics? Leadership contingent.

Accuracy of claims? Leadership decision.

A culture that earns positive reviews? Leadership influenced.

A commitment to educational content? Leadership priority.

Marketing can execute. But it cannot decide who your organization will be. AEO, at its core, is an audit of the organization’s integrity. It measures whether you communicate truthfully, update information responsibly, and treat buyers with clarity and respect.

AI is not evaluating your homepage. It’s evaluating your company culture.

That’s why CEOs cannot delegate AEO away. Because in the age of answer engines, your organization’s digital reputation is becoming one of its most valuable assets. And that asset is shaped by leadership, not by tactics.

Five Quick Wins to Improve AEO in the Next 30 Days

While AEO is ultimately a long-range leadership discipline, there are immediate steps you can take to strengthen your trust profile.

1. Publish a transparent pricing page.

Give ranges, explain cost drivers, and address common pricing questions. AI rewards clarity and punishes vagueness.

2. Add collapsible FAQ sections to your key webpages.

FAQs dramatically improve “answerability,” reduce AI hallucination risk, and let you address cost drivers, timelines, hidden fees, and common objections in a clean, structured format. The questions should be written in natural human language.

3. Update three critical webpages for accuracy and freshness.

Review and correct any outdated claims, add “Last Updated” dates, and ensure information is consistent across your site and external listings.

4. Strengthen your review ecosystem.

Encourage recent, authentic reviews; AI weighs recency, sentiment patterns, and complaint consistency far more heavily than most leaders realize.

5. Build or update your educational content hub.

AI trusts organizations that teach generously. Create articles or guides that explain costs, problems, comparisons, alternatives, and “Is it worth it?” questions.

These steps send an unmistakable message—to humans and AI alike—that your organization is trustworthy, stable, and worth recommending.

Conclusion: The New Front Door to Your Brand

The old front door to your organization was your homepage. The new front door is AI. When someone asks a question related to your services, it may be an AI tool (not a search engine) deciding whether to introduce them to you.

If you don’t tell AI who you are, it’s perfectly happy to introduce people to someone else.

That means the trust signals you display across the web (your content, your pricing, your accuracy, your values, your reviews) now function like a digital reputation report. And the organizations that take this seriously will shape the next era of visibility, influence, and growth.

Before you do anything else, I suggest you take 30 seconds or so to access your free Trust Signals Score at AITrustSignals.com. Once you have it, I’d be glad to help you interpret what it means for your organization.