Artificial Intelligence and Customer Retention

We all know the eighty/twenty rule. “Eighty percent of your profit comes from twenty percent of your customers.” According to Small Biz Trends, lowering your customer churn rate by five percent can increase your profitability by 25 to 125 percent. And repeat customers spend thirty three percent more than new customers. So, a ten percent increase in customer retention levels results in a thirty percent increase in the value of the company.

It’s a no brainer that companies need to concentrate on customer loyalty. Brands need to inspire loyalty to increase repeat business. Customers increasingly expect a personalized experience when shopping online or in a store. In order to encourage repeat purchasing, businesses need to personalize their marketing efforts to appeal to individual consumers and their unique buying habits.

Personalized Marketing

Artificial Intelligence (AI) is the future of personalized marketing. AI is highly developed computer programming that captures data and analyzes it in a way that resembles human thinking. AI can take a vast amount of customer data and provide predictions on future purchasing behavior by recognizing and remembering trends; problem solving; and performing tasks based on learned results.

Marketers can harness the vast amount of data from website browsing and social media to gain a deeper understanding of their customer and then quickly modify messaging for maximum effectiveness. AI can provide solutions, without the manual human labor, inexpensively and with speed that manual efforts will not match.

Many companies don’t take advantage of the behavioral data available on their customers.  Behavioral data is more relevant than segmenting customers by such traits as age, gender, income, etc. You can only guess at a customer’s interests based on their age or gender, but gathering data on previous choices that specific customer has made in the past will provide more accurate information to use in marketing campaigns.

AI can track the time of day when a customer often shops, and send emails during that time to encourage purchasing. By placing content in front of the customer that is targeted around their interests at a time when they are likely to click through, AI allows marketers to initiate conversations at the critical “decision-making moment” to directly influence consumer buying decisions.

Losing Customers

Customers often leave a brand due to an unsatisfactory experience. AI can help create a better customer experience by recommending products they would likely enjoy based on past purchases. This encourages the customer to stay with that brand because it is easier than a prolonged online search for a new, untried product. AI-driven technology will allow consumers to find products and place orders faster than ever. Convenience and speed will be the norm and companies will need to keep up with this technology.

AI and Print

AI isn’t only effective with online campaigns, or email campaigns. T/O Printing has designed solutions that combine personalization with a print marketing campaign. Due to the print on demand technology, unique versions of print marketing material can be created for individual customer segments based on behavioral data. Personalized pieces yield higher ROI than generic pieces. And blended campaigns that combine print and digital with high levels of personalization create higher customer loyalty.

The key to retaining customers is an enhanced, convenient and positive customer experience. AI is the only way forward to harness the value in the vast amount of consumer data; to create value for the consumer; and to positively impact sales. Whether receiving online or print content, consumers are expecting a personalized message about products they care about. Anything else is going in the trash.