The use of Artificial Intelligence (AI) and machine learning is becoming more and more frequent in a range of industries. One of the most promising areas where this new technology can be implemented is customer Engagement and Loyalty programs. Engagement and Loyalty programs are key in the prediction and shaping of customer behavior. At the foundation of these programs is data. Data is collected, analyzed and leveraged and can then effectively help achieve desired results.

Loyalty programs are a reliable source of customer information and are well suited for collecting data that is driven not only by the brand, but by the customer as well.  However, regarding an Engagement and Loyalty program as simply a tool for driving and increasing purchases is short-sighted. We consider these programs as an effective data-collection funnel: more effective at clustering, targeting, and influencing future shopping behaviors.

Only considering the Engagement and Loyalty program from a data-driven perspective is not enough. Brands need sufficient technology in order to accumulate, analyze and link the data to other sources of collection. Ultimately leveraging these insights in order to drive customer satisfaction, loyalty and a satisfactory customer experience.

Firstly, AI and it’s findings allows ways for a brand to better use customer data: Every interaction, feedback or transaction that customers generate in turn generates data about them. For example, a brand is able to deduce what type of products a customer prefers by collecting information on their purchase history. AI is able to then take this collected data set and build a customer profile. This information can then give a brand a greater insight into their customer demographics.  They can then decide to make alterations in their products or services where necessary, to better cater to this group of customers. 

Secondly, AI is able to acquire knowledge on which particular offers a brand’s customers would be most interested in. It can then use that information to craft communications in order to appeal to a select group of customers or even a specific individual, helping increase sales and brand awareness. Better crafted communications will in addition assist brands in developing relevant and meaningful relationships with their customers: 

When a specifically crafted message is sent, the recipient will more likely feel as if a meaningful interaction has taken place instead of just more “spam”. This feeling can then lead to the idea that the brand understands their wants and needs. By forming this connection, brands are able to build better brand engagement, distinguishing them from other companies in the same vertical. 

Thirdly, AI technology can be utilized to help safeguard customers from hackers. Hackers are able to find and exploit vulnerabilities in a company’s defences. This gives them the ability  to defraud customers of Loyalty and Rewards points. This action has the potential of costing a brand a significant amount of resources in addition to a damaged image. AI technology can help prevent this exploitation. By understanding a customer’s behavior, an alarm can trigger if irregular activity is detected. A company can then choose to investigate the issue further, taking action to halt the efforts of hackers if and when necessary. 

Finally, AI can be used to create a better customer journey and experience. For example, if a customer encounters difficulty on a brand’s website, has a query or should require support for (purchased) products, AI can be utilized to help them. 

The most common use of AI in customer service support is the use of chatbots. Customers increasingly prefer to use online chat services rather than call a customer service call-center. This is due to the fact that online chat services are found to be more convenient, quick and affordable to use. 

If a brand chooses to use an advanced version of an AI chatbot, customers may not even be able to distinguish between a genuine person on the other side and an AI driven chatbot. Because of the used data sets, chatbots can be highly knowledgeable. This makes certain that an AI chatbot will better be able to solve most problems and questions easier and faster than a customer service employee.

One of the most significant emerging technologies of the fourth industrial revolution is AI. This extraordinary technology has already started its global impact on several sectors of business. As we mentioned, there are a number of advantages to incorporating AI into an Engagement and Loyalty program. These benefits vastly justify an investment of resources into the integration of AI into such programs: leading to the generation of unseen advantages in the communication and servicing of a brand’s customer base.