Staying connected with your customer lies at the heart of all marketing strategies.
While many business owners feel that being connected simply means finding ways to keep in touch, connectedness is a much deeper and wider concept. It goes above and beyond the initial transaction and the goal today is intelligent engagement, and not a series of random, hit-or-miss, one-size-fits-all strategies.
Why stay connected?
Connectivity is the life-blood of your business.
Studies show that it costs five times more to acquire a new customer and explore new markets than it takes to retain an existing one. Building sturdy, loyal customers helps to avoid the higher costs involved in new customer acquisition.
Customer Lifetime Value (CLV) is an important marketing concept for any organization, no matter how big or small, whatever the nature, scale, location, age and extent of its business. Unfortunately, only 46% of companies make an attempt to measure CLV accurately.
Marketers have long known that there’s a 60-70% higher probability of selling to existing customers but only a 5-20% chance of selling to new customers.
Loyal customers spend 31% more on average on your products and services. They are also 50% more likely to try new ventures.
Boosting customer retention rates by just 5% has the potential to increase your profitability by 25-95%.
But customer retention is a mutually beneficial relationship. Your customer seeks and receives quality, information, support and honest business practices in return for the patronage of your products and services, loyalty, referrals and social media recommendations.
It’s important to tread the fine line between over- and under-connecting. Too much communication can be annoying, while not enough can cause stress and anxiety. The information you provide should be useful, current, valuable, relevant and educative.
Prompt response, validation and commitment to the relationship are other aspects of staying connected.
- Connected customers are more engaged with your brand, products and services
- Highly connected customers add to your brand value
- Such customers trust your organization, products and services
- They want and value personalized communication because it makes them feel unique, valued and special
To facilitate connections, it’s crucial that you leverage the latest, most effective and affordable technologies. This ensures that the Big Data that has become available to marketers is correctly understood, analyzed and appropriately utilized. Marketers can then distribute their efforts more efficiently across different channels.
AI and ML in marketing: How they play out
Artificial Intelligence (AI) is one of the very latest trends that’s being purposed as the marketing tool of the moment.
It has opened up an amazing landscape in Customer Experience (CX) strategy, and it’s truly an idea whose time has come.
There’s a lot of hype and data floating around about AI, its benefits and drawbacks. Data is the mainspring of every AI process, but it has to be synced with the right models and algorithms so that its full power can be unleashed. It must also be seen as one of the core competencies required for those who need to use it.
The components of AI in marketing include:
- Analysis of data
- Processing of language
- Media purchasing
- Automation of decision making
- Real-time, authentic and relevant personalization
- Generation of the right content
Machine Learning (ML) is propelled by AI. It enables the use of algorithms to analyze the data that comes in and then use this data intelligently to improve the CX. New information is analyzed in the historical context of older data and this helps to evaluate what has worked or failed in past interactions.
A combination of AI and ML offers the best solution to understand and improve CX.
How AI and ML enhance customer experience strategy
Currently, many companies have adopted AI and ML to increase automation and reduce their operating costs. These technologies have immense potential to automate both knowledge work and manual work.
But the true potential is still under-explored. These technologies are best used in customer-facing jobs such as sales, marketing and customer service. Though AI may not be able to replace the human touch, it can provide enormous support.
AI has the power to handle humongous volumes of data at unbelievable speeds, and ML can learn from each and every interaction. The AI market is poised to grow at a CAGR of 40% and cross $8 billion in the next three years.
Recognizing and Serving Customers: AI’s biggest advantage is that it can accurately identify and recognize customers through previous interactions. Intelligent technology can be used to increase human capability. This means that the moment a person visits your website or your in-store, AI recognizes them by their smartphones. Their ordering history, method of payment and level of satisfaction form the basis of their current interaction. AI offers more tools for white-space analysis. This means that there are greater openings for immediate and timely action to seize opportunities. AI can use different apps to help customers find the right product through uploading photos or videos.
Anticipate and Predict: ML, natural language understanding and natural language processing help you to anticipate future behaviour based on past choices and preferences. They give you a deep insight into customer sentiment and behaviour. You can then provide them with relevant content, improve their customer journey and avoid pitfalls. AI can understand seemingly random information and derive patterns much like the human brain can. This means that your marketing strategy can create human-like interactions that see, hear and respond to the customer appropriately. It is possible to analyze real-time decisions based on the most current data in an interaction. This helps with predictive analysis that creates actionable data for the next step in the CX. Customers appreciate the reduced response time. You can also give customers added flexibility in terms of adding, deleting, or altering orders at every step of their journey.
Chatbots: The most widespread use of AI today in the area of chatbots and digital assistants. Customers are slowly but surely beginning to see these features as trustworthy and efficient. They are not meant to completely replace humans but offer support and timely assistance. Many routine and minor issues can be handled by AI-enabled chatbots, leaving more complex and challenging issues for the customer service department to handle. This is a much more cost-effective and time-saving way than the traditional help desk manned by humans.
Beyond Personalization: This is the era of hyper or super personalization in marketing. AI can be combined with current data analytics to offer your customer unique, specific and targeted “snowflake” content. This almost means that no two customers receive cookie-cutter content. AI also helps to give the customer the information desired within a very short time. AI and ML can dissect and interpret customer data at a scale, speed and precision that’s far beyond human capability. This is a far cry from listening to elevator music while you’re put on hold by customer service reps for long periods of time in the old days.
Reduce Frustration: Customers also love the fact that they’re not given repetitive messages or asked for information that they’ve shared earlier. This would include addresses or phone numbers. They are also happy not to have to repeat their problem to multiple levels in your marketing department as the issue escalates. AI and ML can connect up the silos of information on chat histories, previous preferences and intentions, payment method preferences, and behavioural data. The CX is much more smooth, professional, personalized and swift.