What Does Artificial Intelligence Mean For Loyalty Marketing?

Without hyperbole, the magic of artificial intelligence in marketing is its pattern recognition, particularly when it comes to very large data sets. This ability to analyze and unpack behavior patterns empowers your loyalty marketing, which is by itself, already magic, too. 

Today’s marketing trends all revolve around customer satisfaction, engagement, and connection, in the hopes of fostering customer loyalty and avoiding customer churn. Think about it: your inbound marketing efforts attract your target audiences, then you nurture them with personalized marketing and keep them coming back with loyalty marketing. 

Loyalty marketing isn’t just rewards programs

It’s about building a relationship (actually, lots of them). Loyalty marketing, also called artificial intelligence marketing because of its necessary use of AI, uses machine learning (a form of artificial intelligence) where human abilities simply can’t achieve the same results at the same efficiency—accelerated pattern recognition, social listening, sending the right offer to the right person at the right time, and doing all this at scale. 

Loyalty or rewards programs build the foundation of data you can use to guess at what your program member might buy, based on their established buying habits and preferences. 

But using AI gives you accurate insight based on more robust data in addition to your loyalty program data, enabling you to personalize your customer’s experience further through behavioral targeting, and therefore influence the next buying decision. 

For example, AI gives you insights learned from countless customer behavior patterns and data so you know when a customer might be running out of their night serum and you can make it so easy for them to re-order and receive their new bottle the next day. This is what Kiehl’s is doing for customer loyalty

You might entice your customers with rewards, but AI helps you gain rewards by understanding how to effectively influence your customers’ buying behavior. 

Loyalty marketing is more than accepted: it’s expected

Today, customers are more and more familiar and comfortable with experiences that have been streamlined using their data, and therefore more willing to exchange their data for easier, smarter retail experiences. Customers expect marketers to use AI technology and their captured data from store activities and interactions: 

  • To deliver personalized interactions
  • To provide omni-channel support and services
  • To listen on social media 

Using AI helps you send effective, personalized incentives: the “right offer to the right person at the right time in the right channel” because AI gives you data on what your customers are saying about you or their needs relevant to what you can offer, through digital breadcrumbs like their purchases, searches, reviews, posts, and website visits. 

It’s no longer about what you want to sell, but what your customers want. That’s what drives customer loyalty. And social listening isn’t just about your product—it’s about values and beliefs. Technology has made the world smaller, and what are you doing to adapt to it? 

Customer loyalty through brand values and shared beliefs

Technically, marketers are here to sell, but the rising generation of Millenials and Gen Z, not to mention the “woke” Gen Xers, believe they’re here to make this world a better place, and that you should be, too. 

So you need to know what your customers are passionate about. 

50% of consumers worldwide are belief-driven buyers: They will switch away or toward a brand based on that brand’s stand on societal issues. You want loyalty? Listen to your customers and speak up. Again, AI can pick up patterns of discussions and help you determine the values and beliefs most relevant to your customers. 

Don’t think you can just skate by without taking a stand. 65% of consumers say they would NOT buy from a brand who stays silent about issues the brand should actually participate in. 

On the flipside of that, speaking up will earn you customer loyalty and advocacy. 48% would not only defend you but even criticize your competitors, and 51% will stick with you and buy from you exclusively and frequently. 

Acquiring and keeping customers through collecting and using data

AI-driven hyper personalization will only be as good as the human experts that put the personalization engine together. Even the most beautiful mansion can’t survive a shoddy foundation and construction, no matter how great it looks on the outside. 

There’s still a lot to figure regarding how AI can best deliver premium user experiences for long-term relationships and loyalty programs. But we can keep the momentum going, and keep collecting the information we need to personalize incentives, truly connect, and build a relationship with each customer, and improve collecting practices and machine learning. 

The evidence is already out there: AI and deep learning are keys to marketing success, and they also boost loyalty marketing. 

Sarah Cooper

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