Can Artificial Intelligence Drive Customer Loyalty?

If you are greeted by name next time you enter your favorite store, don’t worry, it is not a prank, you might be witnessing AI at work.

Customer Service Rep providing personal service

The efforts companies make to customize the experience are triggered by the need to secure existing clients and attract new ones by positive word of mouth. Brand loyalty is hard earned and easily shattered by just ignoring a tweet. In the speed age, people crave for attention.

Customer-Centric Culture

There is a recurring feedback loop between clients’ expectations from a provider and the level of service. Due to customer-centric companies like Amazon and an increased personalization of offers, now people accept nothing less than playing the role of captain in the retail journey. The mass-production, one-size fits all era is being replaced by highly customized products and services.

Innovative companies have dropped traditional ways of getting more customers like price wars and incremental improvement of products in favor of investing in big data powered AI systems that can offer a personal touch, create tailor-made experiences and are safe from identity theft and cyber crime.

Personal with an AI twist

The paradox of this approach is that powerful, cutting-edge technology is striving to replicate a genuine human touch in the relationship between the company and the client. Algorithms are gradually learning to offer that cozy small-town feeling to customers. A dedicated personal account manager is no longer an option, considering the scale of operations. Just as in your father’s time the bank clerk recognized him by voice when he called in to clear a check, AI development can now do the same by speech recognition, natural language processing, and dialogue management.

By knowing all about your purchasing history, searches, and even GPS-based location, the system can compare your profile to thousands of “people just like you” and make recommendations, like Netflix. This is, in fact, a granular market segmentation focused on behaviors and preferences instead of considering demographics.

Personalization begins in the market scanning phase and continues down the sales funnel at each stage. Advertising is served on the potential customers’ preferred environments, at the most likely times they can pay attention, displaying products that are considered most suitable by the algorithm about previous searches. Tapping into the influence potential of the client is done by offering carefully chosen incentives, determined by behavioral cluster analysis. This is a consistent step forward from redeeming coupons for a free product and Tupperware parties.

Leverage Experiences

Customer experiences can mean anything from a website visit to an in-app purchase, attending a corporate-sponsored marathon or dealing with unresponsive customer support. Every experience shapes the client’s perception of the company and triggers a response to continue or stop. Given the decreasing attention span, organizations cannot afford to waste any interaction.

Engagement from the brand usually makes the client feel important and well catered for. In the “good morning texts” era, companies are expected to show interest and respond within a few hours, especially to undesirable comments and complaints. If the client shares a negative story on social media, it is a cry for help. Ignoring it means both wasting opportunity and more work to get new business. Almost every client will switch to a competitor after a poor customer experience.

AI can help with these problems by employing multiple strategies at once. Unstructured data analysis, like e-mail scanning, can identify problem areas and speed up solutions. Keeping a customer interaction history that creates profiles, saves the company from the shame of not remembering a past problem. A step forward is to propose incentives for the client to stay when they want to end the collaboration due to recurring trouble.

Social media channels are both data mining sites to take the pulse of the client sentiment towards the brand as well as strategy tools to reach the consumers in their natural environment. Loyalty is built on trust and trust is created by dialogue and mutual values. Show customers that you listen to understand and react to their communication and needs. AI can now take on simple tasks as responding as a low-level customer agent. Implement code that automates responses to simple inquiries and passes on to well-trained humans the more complex ones. Aim for zero open threads (make a dashboard and keep it visible).

Ensure Safety & Privacy

Although most clients are ready to trade their data in exchange for a better rate, customization options or a more convenient interaction (think Amazon 1-Click buy), the concerns regarding safety and privacy are real and increasing. Cybercrime and identity theft not only produce material damages but shatter a client’s trust in a company’s ability to protect their data.

Financial institutions and healthcare organizations are entrusted with some of the most sensitive data and should counteract malicious attempts with equal force. Investing in AI that can detect attacks is no longer optional, but a requirement to remain credible in the minds of customers. Algorithms blacklist IPs, alert customers via their preferred contact method and ask for human verification of quarantined actions. Customer loyalty is given in exchange for the peace of mind of knowing your data is only used to improve your experience and to offer you the best deals.

Tech Challenges

To engage AI in building customer loyalty, companies must collect and put to good use impressive amounts of data or make sense of existing data repositories. Many enterprises already have vast and diverse data which remains untouched due to lack of structure and know-how.

Capturing and properly organizing data is the first challenge of a company looking to be more customer-oriented through AI. A subsequent challenge includes using a unitary system to have an overview of data coming from different sources such as invoices, e-mail, social media, CCTV and CRM. The biggest problem remains to turn data into actionable insights, if possible, in real-time.

Loyalty towards companies emerges from similar mechanisms that work in personal relations. Trust, consistent positive experiences, and the same values are the foundation of a long-lasting and fruitful collaboration. AI can play multiple roles, including a personal advisor, brand ambassador, dedicated marketer and data protector, all based on the same set of information.

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