AI's ability to trace hidden patterns from the massive customer data sets makes it a value-added application in loyalty marketing.
FREMONT, CA: Marketers have engaged themselves in various marketing techniques in the past. Most of their efforts have been mere attempts of enticing customers, lacking a solid strategy or analytics capabilities. However, the current advancement in technology offers an opportunity for marketers to track and analyze the outcomes of their efforts. Loyalty management is an approach in this regard that focuses on retaining existing customers while expanding the overall customer base via incentives. The main challenge that comes with loyalty management is a thorough understanding of the targeted customers, and it can be efficiently with the help of relevant data sets that offer a glimpse into the buyer's preferences, buying habits, feedbacks, expectations, and other relevant information.
Keeping track of such massive data sets was limited by manual capabilities to analyze and extract meaning from the spreadsheets. However, technologies such as AI and big data have opened the floodgates for marketers. The firms are increasingly moving towards AI-driven systems for the cause of data-driven customer marketing. According to a study, almost 80 percent of the companies relied on AI capabilities for production, while 30 percent considered the enhancement of their AI budget. AI is crucial for data-driven marketing, an approach that forms the backbone of loyalty management.
In the current era, manual processes are increasingly automated. Companies are generating digital footprints via posts, reviews, searches, and others. Brands have realized the hidden potential of these footprints and have collected such data while attaching external metadata to segment the data sets contained in them. The intention is to predict a customer’s future actions and adapt accordingly. As in the case of any data-driven marketing approach, it might not be possible to create a one-to-one relationship for each customer without the use of tools and technology that utilizes AI. A brand that wishes to benefit from the true potential of a loyalty marketing approach must use AI tools to be in line with the highly dynamic customer behavior in the present times.
Segmentation is the primary technique that has been used ever since the marketers moved over to loyalty marketing. It’s a highly effective approach that allows grouping the customers into various categories so as to better understand them as groups rather than individuals. However, the processes involved in segmentation are increasingly getting complex. Moreover, segmentations are rather presenting a static view of the customers than the dynamic one. AI can address this challenge due to its ability to automate simple, redundant tasks while enhancing pattern recognition.
AI is adding immense value to customer understanding and presenting a dynamic view of the customers. Thus marketers can better understand their customers and provide them with the right offer at the right time. Further, AI helps in offering personalized services to the customers. It allows formulating better offers for an individual customer, thereby making the customers feel that the brands are actually sensitive to their needs rather than just focusing on selling products.
Equipping an analytics engine with AI tools allow personalization at the mass scale. AI can also enable hyper segmentation that will involve further categorizing the customers based on various attributes that are based on the desired marketing strategies. The marketers can create dynamic content for each customer segment and can optimize the content dynamically before delivering them across various channels to the customers. Thus, highly dynamic content will certainly result in amazing customer experience and higher levels of customer satisfaction.
Brands are already utilizing customer data with the help of AI tools for understanding the customers and generating higher sales. Customers are also becoming aware of the value of their data and are getting more open to the idea of sharing the necessary information with the brands. A highly personalized experience certainly appeals to any customer, while the brand can benefit from the increased probability of scoring a loyal customer.
An effective loyalty program also focuses on keeping the costs down for the customers. Smartphones are the primary devices that generate significant shares of sales. App-based loyalty programs that allow the customers to search, receive, and use coupons and rewards on their smartphones will increase the chances for sales, thereby resulting in better outcomes for the marketers and their brands.
Retailers can take a step ahead by integrating with card network APIs. The integration will provide the retailers with an insight into their customers' shopping habits and adjust their loyalty programs accordingly. Using AI-driven loyalty apps, marketers can adjust according to dynamic customer needs. Retailers can further invent relevant, useful, and exciting offers without the need to worry about the overheads involved in the processes.
Currently, the available AI capabilities present a golden opportunity for marketers to plan their loyalty marketing strategies exclusively for their targeted audience. The next revolution in loyalty marketing will be AI-based personalization through hyper-segmentation and the delivery of dynamic content. Considering the current global population of 7.7 billion, marketers will immensely benefit from the analytical power to create and deliver highly personalized yet organic offerings to the customers. Brands, which are quick to realize the potential of AI in loyalty marketing strategies and incorporating this technology into their processes, are sure to gain an edge over loyalty marketing.