In these times of Covid-induced restrictions, changing customer habits are creating tough competition in the retail industry. To be a cut above the rest, enterprises must leverage digital technologies like artificial intelligence, machine and deep learning to enable customer retention, motivate consumers to continue buying from your brand and prevent them from switching to a different brand.
Loyalty programs are a great way to increase customer retention. They not only elevate brand awareness, loyalty programs boost consumer interest, order frequency, average order value and ultimately drive profits. According to a KPMG survey, 85% of an establishment’s growth comes from loyal customers. It is 70% likely for customers to recommend brands with rewarding loyalty programs and 63% said they modified their average spend to maximize loyalty benefits.
Importance of artificial intelligence in customer loyalty programs:
An intuitive and well-strategized loyalty platform helps companies to increase customer engagement by building and maintaining strong relationships. A successful loyalty program must connect with the customer emotionally. It is said 95% of purchasing decisions are made by emotions. With a strong customer relationship in place, enterprises can enhance personalized services, offer rewards and cashbacks to strengthen brand loyalty.
It is necessary for brands to check if they possess the tools to connect with customers in a deeper level, do they have specific personas and customer journeys prepared to respond accordingly and if they understand customer motivations and needs.
It is vital to track customer shopping habits across all their touchpoints to understand customer needs, behavior & patterns and provide a tailored loyalty program. Enterprises need to leverage the power of artificial intelligence and machine learning to make sense of the humongous amount of customer data in real-time.
Establishments using AI as the backbone of their customer loyalty programs witness increased customer relations, satisfaction rates and overall spike in sales through rich data-driven insights. Delivering innovative customer loyalty programs are only possible with artificial intelligence.
How can you build customer loyalty with artificial intelligence?
Predict what customers want: Positively impact customer behavior with predictive marketing analytics. Understanding the requirements of the target audience is at the core of every brand’s marketing strategy. AI will help you foresee customer needs based on the insights derived from their shopping behavior. Machine learning algorithms go through shoppers buying patterns, their past purchases to predict their future actions. AI can help brands to plan how to target a shopper proactively. Sephora predicts when a product is likely to run out by keeping track of their purchase history and targets them with personalized offers to encourage customers to re-stock products.
Give personalized experience: Delivering a personalized experience is now mandatory to improve customer experience as nearly 56% shoppers say they would return to a brand only if it offered an individual experience. Discover customer preferences easily with AI and serve customers quickly. Starbucks gives its consumers a unique experience by processing their purchase data and allowing them to collect bonus points when trying an item. For example; Starbucks tells a customer that every time they order a Turkey Pesto Panini, they will get 25 bonus stars, knowing it is the customer’s favorite. This way, it is a win-win situation for both the consumer and the enterprise. Customers are encouraged to order their favorite item and gain benefits while the company too makes a profit.
Innovate & create new products: AI gives brands invaluable data on customer patterns and behavior. Companies can use this data to analyze what customers are actually looking for and create new products suited to their needs. Tommy Hilfiger used NLP, computer vision and deep learning to scan through massive databases to identify main themes in colors, styles and silhouettes of their products and implemented the changes in their collection to drive sales. After all, customers are bound to repeat business when they get exactly what they desire.
Optimize prices with self-learning algorithm: Prices are a crucial factor for customers when making a purchase. Even if your products are leading the quality in the market, if you do not get the price right, you may lose customers. Deriving the right product cost is an art. Self-learning algorithms can examine different price scenarios based on supply and demand, past trades, make a win/loss analysis, check what the competitors are offering and come up with the right price indicators. Also, with tailored experiences, enterprises can predict the purchase cost range of customers and offer them products in their price range to boost sales.
Engagement & communication: Building an emotional connection with customers is paramount for any brand. Chatbots these days have near-human capabilities and can be designed to have empathetic conversations. It can address customer complaints and listen to them when they are dissatisfied with the service and rectify negative experiences. Consumers trust a brand more and stay loyal to them when they feel they are heard.
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