How AI Can Help You Understand Your Customers Better Than Ever

Know thy customer. It's the first rule of business success. But deep understanding of your customers and their evolving wants and needs can be tricky. Artificial intelligence offers advanced tools that provide substantial insight into the preferences and behaviors of your customer base, as well as overall trends in the market. Indeed, AI is really upping the game of customer experience (CX), satisfaction, and loyalty.

A recent article from SurveyMonkey offered some insightful statistics on customer engagement preferences based on a survey of more than 2000 respondents.

Here’s what they reported:

• 52% of consumers are interested in AI that guides them through a product, website, or feature experience.
• 47% of customers are interested in getting personalized deals.
• 42% of customers appreciate AI-driven product recommendations.

These numbers become more dramatic as the age of the customer decreases, with Gen Zers scoring 10-15% higher in all three metrics.

But AI is such a broad brush for the multitude of technologies that are providing business owners with the customer data, insights, and experience that drive success - so where do you start?

How Businesses Are Leveraging AI Technology to Improve CX

While every business has its own needs and budgets, the following is a high-level overview of some of the customer related AI technology on the market today, and how businesses are leveraging them to gain a better understanding of their customers and thus expand their lifecycles.

Predictive Analytics: This AI technology can analyze customers’ historical data, then forecast future trends, behaviors, and outcomes. It also helps personalize CX, enhance customer engagement, and improving loyalty.

Examples of AI predictive analytics that you may have seen include Amazon using AI to make product recommendations and predict future purchases. Netflix uses collaborative filtering algorithms and deep learning models to suggest movies that may interest you.

Customer Sentiment Analysis: Understanding how your customers feel and what they think is an invaluable asset In acquisition and retention. AI-powered Natural Language Processing (NLP) processes and interprets text data to provide business owners with remarkable insight into customer preferences and satisfaction. Access to real-time analytics like this allows businesses to respond quickly to both positive and negative feedback, and thus fine-tune their customer connection.

Many businesses, likely including industry titans like Coca-Cola, use IBM Watson’s customer sentiment analysis to monitor, record, and analyze consumer online commentary on Facebook, Instagram, and other social media sites.

Customer Segmentation: Not all your customers behave the same, so your ability to segment them by their actions and preference is important. AI technology like Adobe Sensei and Google BigQuery ML analyze customer data, then segment it based on specific characteristics.

For instance, Spotify uses collaborative filtering and clustering algorithms that collect and analyze data points, then create segments based on listening habits and genre preferences. They then use this segmentation to make personalized playlists and song recommendations.

Chatbots and Virtual Assistants: We are all at least familiar with the nearly ubiquitous chatbots by this point. The technology uses machine learning and NLP to communicate with customers in a remarkably human-like way.

Live customer service often equates to notoriously slow response times and cost-heavy human resources. You can expect the role of chatbots to continue to bourgeon for many years to come.

Predictive Customer Lifetime Value: Forecasting the longevity of a customer is invaluable information when it comes to directing marketing and customer development dollars. AI models use machine learning to predict how long an individual customer will keep purchasing and the lifetime value that is expected from them.

Using AI tools like Salesforce Einstein and DataRobot, businesses can improve retention by strategically focusing their budgets on high-value customers.

AI Positions You and Your Customers for Success

We have touched on just a few AI technologies that are currently enhancing the way businesses connect with their customers and address their needs. While some of these tools are well entrenched, others are just emerging. It will be exciting to see what the future of AI technology has in store for us, and how it will benefit businesses and their customers.