There’s no doubt that artificial intelligence has become more than just a buzzword, with the technology making its way into business processes across industries. In marketing, AI is fast becoming a game-changing force that is revolutionizing the customer experience. In fact, procurement of MarTech, the various software tools used in marketing campaigns, is now focused on generative AI tools, applications, and analytics, with 60 percent of marketers viewing this area of investment as bringing in the most value and ROI, according to the CMO Intentions 2024 study.
Such initiative aligns with what customers expect from businesses these days. As Deloitte notes in its latest analysis, 62 percent of customers are open to the idea of companies using AI if this entails improved processes and level of service. After all, it is all about the personalized experience, with brands recognizing and responding to the distinct needs and interests of their customers. All this can be efficiently done with the help of AI-powered tools.
But in what areas can marketers use AI to elevate and deliver that personalized customer experience? Deloitte lists three ways to utilize AI.
Identify The Target Group
One key element of all marketing activities is target group segmentation. Traditionally, marketers manually estimated the optimal target audience for their campaigns, guided by a general goal—are they aiming for a higher level of awareness, commitment, retention, or profits?
These days, AI-enhanced predictive analytics enables marketers to swiftly and accurately identify the best focus group for a specific campaign. AI performs this precise customer segmentation by:
- Summarizing the characteristics of the main target audience
- Performing deeper analysis and identifying new personality types
- Treating the new personality types as sub-segments and delivering personalized content.
Among the big-name brands that leveraged AI for enhanced customer segmentation include:
- BMW—AI analyzed customer data from various touchpoints, and then the automaker tailored its marketing messages and car recommendations to individual preferences.
- Airbnb—The company employed AI to segment its market based on renter behavior and preferences and then optimized pricing strategies for hosts.
- Sephora —The beauty retailer used AI to improve its Beauty Insider loyalty program. The technology segments customers based on their buying habits and preferences and delivers tailored product offers.
Meanwhile, AI customer segmentation tools used by organizations included Google Analytics, Segment, and SAS Customer Intelligence 360.
Establish Relationships With Customers On Their Terms
While detailed market segmentation is a good start, Deloitte points out that marketers need to communicate the right message through the right channel and at the right time. Organizations can reach their intended audience and make sure their message is well-received by using AI tools that:
- Verify to who, when, and via what channels to send messages
- Gather information about customer preferences related to frequency, channels, and time of sending messages
- Run A/B and multiple-choice tests to gauge the effectiveness of AI-powered campaigns.
Starbucks tapped its house-blended AI, Deep Brew, to generate personalized messages to boost its rewards program initiative. Deep Brew reviewed the purchases of customers who ordered through its app but were not members of its loyalty program. It then used the generated data to create personalized offers and other interactions to encourage customers to sign up for the loyalty program. The AI-driven initiative resulted in over 4 million new loyalty members.
Provide Each Segment Of A Target Group With Tailored Content
After identifying the target audience and when and how to reach them, the next step is creating engaging content. The traditional way of generating content is a time-consuming, manual task. With AI, organizations can swiftly come up with different offers for each segment of their target audience. AI sifts through tons of customer data – from online interactions to purchases to customer queries – and creates hype-personalized content. Additionally, marketers can leverage AI to:
- Use multiple tags or metadata to determine the groups for which individual campaigns should be intended
- Insert dynamic fields in content associated with tags and metadata.
Audi used AI to generate personalized ads for potential buyers based on their browsing behavior. The offers would include the types of cars its clients are interested in and their current location. The content would be delivered at the time of the day that is most likely to grab their attention.
Eye On the Prize
According to a McKinsey & Company report, a customized customer experience brings a host of advantages, including a reduction of customer acquisition costs by as much as 50 percent and an increase in marketing ROI by 10 to 30 percent. In this rocky economic climate, businesses need all the help they can get to minimize costs and maximize profits. Marketers can leverage AI as a high-return strategy and, at the same time, enhance customer satisfaction and deepen brand loyalty. It’s a win-win scenario.
