AI in loyalty program

The future of AI in the making of a successful loyalty program

According to a Loyalty Census report of 2016, there are 3.8 billion members belonging to a loyalty program. (Source) With so many memberships, it becomes difficult to reach each and every customer through E-commerce. In such a challenging landscape, marketers can only rely on data and the use of artificial intelligence to boost brand affinity and conversion. The use of AI will not only transform member experience but also ensure that loyalty program delivers positive results for the brand.

AI enables brands to create engaging experiences using deep learning which is just an advanced form of machine learning.

Since loyalty programs are a goldmine for data, AI uses deep learning to record and analyze every action performed by the customer – store visit, product view, rating, referral, purchase history etc. This analysis is utilized to benefit loyalty programs using segmentation and personalization.

Brands can create segments that can be built with information such as gender, location, shopping behavior etc. to further categorize into machine learning generated ‘user profiles.’ The segmentation can be utilized to create bespoke customer experience and offer accurate product recommendations, promotional discounts, individualized rewards and more.

AI can be used to craft a better experience for customers using personalization. It is often challenging for brands to attract millennials and fulfill their expectations that change more frequently and quickly. AI helps brands understand customers at the moment they are making the purchase. This information is utilized to understand how context impacts purchasing behavior and simple data analytics can’t do this work alone. Deep learning provides the capability to use data analytics and understand what drives customers and their intent. By knowing what triggers customers’ buying intent, AI modeling can help determine further the right mix of promotions that will lead to higher customer engagement and retention.

Real-time engagement and location-based marketing have been made effective using AI to reach every customer with personalized offers. Retailers are also using geolocation-based apps to better analyze customer behavior and improve retention rate. Geolocation offers precise targeting and gives crucial insights into customers’ interaction with mobile devices. Brands can use this information to enrich customer experience by anticipating their needs and bring value to the loyalty program. Brands can also run campaigns to promote the loyalty program to non-members and encourage them to join.

AI offers a powerful set of technologies to automate loyalty campaigns for marketers. With capabilities such as image analysis, semantic reasoning, language processing, data aggregation, predictive analysis, etc. AI can supplement loyalty programs by improving their marketing strategy – gaining a competitive edge in the market. AI is set to transform the complete loyalty membership experience and ensure that loyalty programs are profitable for both customers and the brand.