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Artificial Intelligence (AI) has enormous promise in terms of increasing client loyalty. Most firms place a high value on customer loyalty. It's one of the most important aspects of client retention because it decreases turnover.

Reduced churn is desirable since it costs four times as much to acquire a new customer as it does to retain an existing one. You also have a 70% chance of selling to old clients against 20% for a new customer.

As a result, increasing client loyalty is a simple decision—but how can AI assist?

The State of AI Right Now

AI is utilised in products like virtual assistants (Apple's Siri or Google Home), chatbots, and self-driving cars because it simulates human intellect.

Natural language processing, machine vision, and machine learning are examples of current AI technology.

To evaluate massive datasets, these technologies often employ complex algorithms and distributed processing capacity. These datasets are significantly greater than anything a human could handle, and they were gathered by the myriad digital products and services we use today.

This AI analysis can start a chain of replies, allowing you to predict what actions a person will take in the future. Being able to correctly predict client wants has numerous ramifications for large-scale personalization and customising of a product or service.

Factors That Influence Customer Loyalty

So, in terms of loyalty, how does this look? Customers are more loyal to the firm that provides the best experience than to a famous brand or a particular name. In terms of distribution, availability of the product, customisation possibilities, and options, we may assess the quality of the experience.

Consumer loyalty is the possibility that a customer will stay with your brand in the long run, whereas customer experience is the sum of a customer's encounters with your brand.

Customer loyalty is influenced by the following factors:

  •  Product quality
  •  A simple, painless experience
  •  A sense of being acknowledged and heard
  • A personal interaction

However, putting these variables in place is difficult. These advantageous scenarios are more difficult to arrange for businesses since they must function on a wider scale than at any other period in history. It's simply not practical to dedicate a single agent to each consumer interaction.

Furthermore, while technology has advanced our efficiency, it can also generate issues and make clients feel alienated. Customers are frustrated by systems that don't work as they should, and they feel as if companies don't care about them.

In addition, digital encounters differ from in-person experiences. In a physical store, friendly and helpful employees are more vital, whereas, for e-commerce businesses, quickness and product availability are critical.

When working on a big scale with limited resources, AI can provide the best of both worlds.

How Artificial Intelligence Encourages Loyalty?

Customer service encounters, according to Gartner, are four times more likely to result in disloyalty than loyalty. This means clients are more likely to have a negative experience with your brand than a positive one.

In the following ways, AI can improve the likelihood of customers having a positive connection.

Self-service enhancements

By improving the self-service experience, AI can increase consumer loyalty.

Setting up a static system and forcing clients to perform all of the efforts is not what self-service is all about. It's all about giving customers the tools they need to help themselves. And, by incorporating AI, you will be able to better anticipate client demands and meet them without the need for further human intervention.

Creating a seamless customer experience by increasing your self-service offering allows agents to be more productive. Artificial intelligence, for example, can propose appropriate knowledge base articles to consumers who are having issues. Customer service representatives can save time and focus by dealing with fewer minor issues.

When we understand the scope of the data, we can better listen to customers.

When a machine has access to enormous volumes of data, it may occasionally provide a more tailored service than humans. On the basis of this data, we can make predictions. AI is built on information gathered about people, but not from a single client, but tens of thousands or millions of them.

The sheer number of data available has always made analysis difficult—at least until AI has progressed to the point where it can take over some of the work. Because of this pattern-seeking behaviour, AI can forecast what a person will do next.

For example, if a software subscriber hasn't used it in the last two weeks, they may be about to turnover. AI can send them re-engagement emails or alert an agent, allowing them to intervene before it's too late.

AI will drive business analysis for loyalty programmes in addition to consumer service. Marketing departments, for example, can utilise AI to better understand customer behaviour and customise campaigns.

AI is already being used by organizations

Despite the obvious benefits of AI, according to McKinsey's most recent report, just roughly 20% of organizations are utilizing it.

Amazon and other customer-centric digital natives are using AI to set the bar for the customer experience. In its warehouses, the e-commerce behemoth uses artificial intelligence to automate much of the order fulfilment process, with robots transporting things faster than any human.

With Amazon Prime, the corporation can fulfil purchases the same day they are placed, and this astounding logistical accomplishment is made possible by AI.

Streaming service on the internet Netflix builds client loyalty by forecasting the types of shows that people want to watch with a 75 per cent accuracy rate. Netflix also customizes the app's home screen based on a user's previous viewing habits and choices.

It also creates bespoke artwork for each show depending on what the data indicates will elicit the best response from that particular user.

Netflix's 2017 revenue was 11.69 billion dollars, up from 150 million in 2002. When you consider that neither of these companies existed 20 years ago, their tremendous success is even more astonishing.

The Problems With AI

The problem with embracing new technology is that they don't always work as we expect. Chatbots that appear to be robots will irritate your customers more than if you didn't employ them at all.

While AI might boost client loyalty, it can also drive customers away if utilised incorrectly.

If you let AI contact your customers directly, there's a chance that one or more of these interactions will go wrong. Google, for example, was fined after its messaging app's "Smart Reply" feature was discovered to be sending out obscene comments.

The bottom line is to thoroughly test your AI strategy before deploying it in the world.

So, can AI be used to increase customer loyalty?

If used effectively, AI, like any other tool, can increase consumer loyalty.

You can increase customer loyalty by using AI to:

  • Listen to your users when they are dissatisfied
  • Iterating and refining your service through data collecting
  • Use it to streamline and improve your core services while keeping your consumers at the center of everything.


Artificial Intelligence will continue to be essential, and its possibilities are endless. As AI pervades more processes, businesses that wish to gain a successful marketing advantage will need to provide consumers with unique experiences, which will enhance customer loyalty and retention.

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