Trailhead sign in a wooded trail that reads please stay on the trail - customer retention concept
PHOTO: Unsplash/Dan Gold

AI-based marketing enables brands to personalize the customer experience while providing real-time decisioning based on the actionable insights that are obtained through the analysis of massive amounts of historical and current customer data. In fact, according to a report from IBM, 50% of brands that were surveyed are already using AI to quickly access insights, automate campaigns and processes, and they are eager to embed it directly into customer touchpoints.

Additionally, the report revealed that executives indicated that they are very interested in AI-enhanced CX, with 70% believing their industry is ready to adopt AI/CX, and 75% predicting that AI will play an important role in the future of their brands. Not surprisingly, 57% stated that responding to customer expectations for more personalized experiences is their number one reason for adopting AI.

What Is AI-Based Marketing?

AI-based marketing uses artificial intelligence to make automated decisions that are based on data collection, data analysis, along with observations of economic trends that may impact marketing campaigns. By collecting customer data from across all of a brand’s channels, analyzing it, and using machine learning to continually improve, AI is able to use predictive analysis to determine the next best action to present to customers, in real time. These actions may be a targeted email with personalized product recommendations, the presentation of a web page where a customer is shown products that the customer is likely to be interested in based on past purchases and browsing history, a chat conversation that includes shipping information for a product the customer has purchased, or other personalized interactions.

There is a change happening. Salesforce revealed that only 29% of marketing leaders used AI in 2018, however by 2020, 84% were using AI — and according to a forecast from IDC, by the end of 2021, worldwide spending on artificial intelligence hardware, software, and services is expected to exceed $340 billion.

Related Article: 6 Ways AI-Based Personalization Is Improving the Customer Experience

Automated Marketing Keeps Data Current Without Intervention

One of the biggest challenges for brands today is that they are buried in data that comes from various channels, including mobile apps, mobile browsing and shopping, website, brick-and-mortar storefronts, customer service inquiries, chat transcripts, email, mobile voice calls, search history, and more. Consolidating and staying current with all that data is practically impossible without the use of AI. “Automated Marketing is a new trend in the business world that has proven to be helpful in customer retention,” said Baidhurya Mani, CEO and founder of SellCoursesOnline. “This AI-based marketing allows businesses to keep their customer data up-to-date without manual entry, which saves a lot of time that can be used for more productive tasks. This also helps them study customer behavior and engagement to create a personalized customer experience.”

Customer retention is very important to Mani, so his brand tends to focus on customer experience rather than spend money elsewhere. “I have found that 63% of our sales from the past year came from repeat buyers, so we allocated part of those sales to concentrate on customer experience rather than marketing.”

Related Article: Personalization: Where Data and Content Intersect

AI and Machine Learning Can Predict Consumer Trends

Marketers are beginning to understand that the success of their marketing campaigns relies heavily on being able to accurately predict customer behavior. By analyzing historical data from social media, news, purchase history, feedback, searches, and reviews, AI and machine learning applications are able to more accurately predict consumer spending trends and behaviors. “The use of AI marketing allows businesses to anticipate customer behavior before patterns even emerge, allowing them to offer exactly the right thing at the right time. Of course, you have to be sure you’ve gathered the correct data, but AI technology can predict and forecast consumer trends in ways that can hugely increase the success of marketing campaigns,” said Stephen Light, CMO and co-owner of Nolah Mattress

Light said that customer retention is actually based on building personalized experiences — if a brand provides a customer with exactly what they want, they are less likely to leave that brand for its competitors. “AI technology can save you the immense work of sifting through the history of each existing customer to discover their preferences, meaning that you just have to act on the data it gives you. A time and money saver for the ages.”

Related Articles: 4 Reasons Why Explainable AI Is the Future of AI

Personalized Recommendations

Most of us are now used to seeing “you might be interested in…” or “customers who bought that product also bought this” messages as we browse Amazon or peruse Netflix or Prime. Recommendation engines, powered by AI and machine learning, are able to show customers movies, products, or services that they are likely to be interested in based on their previous purchase or browsing history. 

Chelsea Cohen, co-founder of SoStocked, an Amazon inventory management software provider, told CMSWire that by using AI and audience segmentation, brands are able to make product recommendations that are more appealing to customers. “As an Amazon marketer and SaaS leader, I’m keen on using AI as a marketing best practice. Segmented email marketing encourages repeat purchases via personalized post-order journeys. Personalized order sequences keep the customer’s experience consistent with their individual needs.”

By using a customer’s purchase history, AI is able to recommend products in follow-up emails, which encourages customers to continue to purchase from the brand. “Ecommerce brands should consider including ‘Recommended Products’ in their follow-up emails,” Cohen suggested. “This strategy encourages customers to shop again, especially if their initial purchase ran smoothly.”

AI also helps to refine marketing strategies that are based around consumer behaviors. “AI can help you identify trends that pique your customers’ interests. Revenue reporting and marketing analytics capture insights on consumer behaviors, whether positive or negative, that you can use to refine your strategy,” said Cohen.

Personalization that AI is able to provide, based on a customer’s individual data, enables brands to personalize their marketing methods. “A complete understanding of customer demographics is crucial to a successful marketing effort. Even something as simple as recognizing a customer's name or presenting them with tailored rewards based on these consumption patterns, replaces the need for mass marketing and traditional marketing tactics,” said Ouriel Lemmel, CEO and founder of Winit

By using AI and machine learning, brands are able to personalize the customer experience in real-time based on the most current data which comes from the ongoing experience itself. “AI helps to better understand your current customers and focus the majority of your marketing strategy on retention, not acquisition,” said Lemmel. “AI-based systems are able to continually adapt to the likes and dislikes of your customer and react with recommendations in real-time. With a deeper understanding of customers, AI can be used to suggest personalized offers that will resonate with the targeted individuals.”

Customers today have very high expectations that are often based on their previous interactions with the big name online brands, and they expect that level of personalization across all channels when they do business with a brand. “AI makes automated personalization more compelling and drives conversion rates. By understanding your customer's buying patterns and shopping motivation, you can provide a more customized and personal experience that will bring them back to your site again and again,” said Lemmel. 

Final Thoughts

Artificial intelligence and machine learning are an effective and useful tool in the marketer’s toolbox. Used properly, AI is able to automatically keep data current without human intervention, predict consumer trends and behavior, and make relevant, personalized recommendations to customers. By providing a consistent, convenient, personalized experience across all channels, an AI-enhanced experience leaves the customer feeling emotionally connected with the brand, and customer loyalty and retention are enhanced and increased.