The buzzword right now is AI, but it is not just buzz, it is a real opportunity to change the way things are done. Let us investigate one specific challenge called the customer loyalty process and discover why AI would be a significant game changer.

Customer loyalty facts

• The customer loyalty process is the idea of interaction aiming to enhance customer lifetime value (CLV) by making them spend more money over a longer period.
• Loyaltycould be measured in different ways depending on the nature of the offer but is usually seen as a preference for a particular company, brand, or service over time.
• Loyal customers are typically less likely to switch to a competitive offer and more likely to recommend the products to friends or family.
• The key is to make the offers individually relevant in order to provoke the desired behavior.

Challenge

Companies want to be relevant to the customers and that means the right message through the right channel, at the right time.

The ability to communicate individually with each customer using different channels has been available for quite some time, many companies still communicate the same to all customers, regardless of relevance to the individual. Some companies have implemented retention activity flows, but there is still a lot of untapped potential in the diversified interaction with individual customers.

Some key issues

• The manual process is still present in many customer journeys. It is simply not possible to handle all potential interactions manually.
• The lack of real-time data in the process. It is not enough to communicate based on yesterday’s data if you want to be relevant.

Solution

A solution is an automated process, using AI, where real-time decisions are made. AI models should be updated continuously with new data, and generative AI models create new data based upon previous learnings. AI solutions should be seamlessly integrated with relevant business systems.

Interaction with the customer should be based on descriptive data about their demographics, preferences, and previous purchase history, as well as predictive information of possible future behaviour. The next level could involve a prescriptive analysis - an automated decision of what to offer next. A combination of all, will make the customer journey more relevant and thus increase the probability of loyal customers.

With AI, it is possible to put automation in the process of analysing customer preferences and behaviour, as well as predict purchase patterns and the risk to churn.

Capture the potential of loyalty, using AI

Relevance and a great customer journey are the ground elements to create loyalty. With an AI-powered sales funnel, the available data can be used to craft a relevant journey for individual customers. Large volumes of data can be evaluated, and decisions can be made in seconds. AI functionality combines all historical information with real-time browsing behaviour making it possible to create a personalised experience for each customer. This could include a tailored add-on offer, a guide for timely payments, or an optimal online customer service flow.

AI-powered customer journeys are self-enhancing, meaning every interaction with the customer makes the process smarter and faster. Customer loyalty potentially increases when the journey is personalised.

And of course, your AI possibilities are not limited to customer loyalty processes. It could, and should, be used to optimise any processes and workflows, where data enables continuous improvement over time. AI can help identify patterns and provide insights for adjustments in product and service development, maximising profit and minimising costs. Additionally, AI can be applied to optimize payment flows and detect fraud, significantly impacting your PNL calculation.