For any business, big or small, customer retention is paramount for success. In fact, while businesses look to run after acquiring new customers, it is the existing customers that prove to be more valuable assets.
To substantiate, as per Semrush, the probability of your existing customers buying your new products is almost twice the possibility of new customers buying them. Having said that, are you doing enough to retain your most valuable customers?
Moreover, customer retention has a direct correlation with the customer service and experience offered by your business. While positive customer experiences translate into overwhelming customer loyalty, negative experiences sabotage your relationships with customers.
To augment, as per Microsoft, customer service is the most crucial parameter based on which 90 percent of customers decide if they want to deal with a business or not. To add, SalesForce cites that 89 percent of consumers decide to buy again from a business based on positive customer experiences in the past. Having said that, ultimately, it’s all about the best practices for delivering remarkable customer experiences.
These insights explain beyond doubt that customer retention cannot exist unless you deliver excellent customer service and experiences. Your pursuit should not be limited to satisfying your customers if you want to upscale retention by big margins.
You should rather find ways to exceed the expectations of your customers so that they always have the desired allegiance to your business. Can you benefit from the ongoing colossal digital revolution to improve client retention?
Well, you surely can, as artificial intelligence comes with some incredible merits that can revolutionize the client retention landscape. This blog delves deep into the exceptional ways in which artificial intelligence is transforming the dynamics of customer retention.
In other words, AI is helping businesses generate more revenue and hence augment profitability. So, without further ado, let us see how AI is helping businesses in optimizing customer service and hence driving higher retention.
5 Ways AI is optimizing customer service parameters
1. AI Gives Insights Into Customer Preferences
Effective and precise understanding of customers’ preferences and shopping patterns is a humongous competitive advantage. You can stay way ahead of your customers if you can efficiently predict the exact needs of customers in your segment. Based on this accurate predictive analysis, you can offer your customers what they exactly desire and boost retention.
However, a worthwhile predictive analysis has to be based on accurate data on customer choices and expectations. This is where artificial intelligence can prove to be a game-changer for your business.
AI can play a massive role in the predictive analytics of your customers’ behaviours and the prioritization of features. AI can help you understand what customers seek from the market and the products in a given segment. Also, with better insights into customer behaviour, you can optimize your social media ad campaigns.
Subsequently, you can retain them in a worthwhile way by adopting a product development strategy that is customer-oriented. If you are offering your existing customers the products and services that deliver on their anticipations, why would they want to look at other alternatives?
The key is to make constant improvements in your products or services as per how customers want them to be. The role of artificial intelligence is paramount in this pursuit of precise predictive analysis. With insights at your disposal, you can achieve your SMART goals in a more effective and comprehensive.
2. AI Can Drive Personalized Benefits For Customers
If you ask customers what they love the most, a lot of them would say that they love embracing the idea of personalization. They feel fascinated when a business understands them well and offers personalized recommendations to them based on their interests. For your customers, it becomes convenient and appealing when you understand their personal preferences.
Even here, artificial intelligence can provide a perfect opportunity for offering personalized features to customers. AI can look deep into the behaviours and patterns of customers based on their previous purchases, search history, and cart additions.
Based on the inferences from the comprehension of these patterns, AI can offer personalized recommendations of products or services to customers.
Moving further, indeed, customers appreciate this personalization. For them, personalization is a measure of positive customer experiences that are paramount for high retention. We all love it when Amazon Prime makes recommendations for movies and shows based on binge-watching patterns. Where do you think these suggestions come from? It is all about the charm and prowess of artificial intelligence!
This is how the massive scope for personalization facilitated by artificial intelligence can transform the fortunes of a business. In fact, you would be amused to learn about a vital insight into personalized experiences offered to customers. As per Epsilon, 80 percent of customers prefer making repeated purchases from businesses that provide personalization in customer experience. Thanks to the advantages of artificial intelligence, such profitable personalization has become hassle-free for businesses.
3. AI Facilitates Round-The-Clock Instant Assistance
Response time is one of the most salient considerations for customers to rate their experiences as either positive or regretful. We already know that their service experience has a direct influence on their decision to maintain a relationship with a business. Speaking of the significance of response time, let us highlight some key statistics.
As per HubSpot, 90 percent of customers opine that immediate response to queries and issues is a quintessential component of excellent customer service. In fact, 60 percent of customers want their queries and issues to be responded to within 10 minutes. On the part of customers, this is a fair expectation. Even we would expect quick reverts on service issues or queries related to our purchases.
However, it may not always be feasible for your customer service team to respond to a high influx of queries in an immediate manner. However, that does not mean you cannot prevent customer experiences from getting tarnished and driving high attrition. With the integration of AI, you can offer round-the-clock assistance to your customers. With the help of AI chatbots, you can optimize the response time for customer queries or complaints.
In this way, you can offer attractive customer service features to your customers and sustain high retention. The better the response time, the greater would be the level of satisfaction in customers.
4. AI Solutions Can Offer Price Optimization
Price is a massive consideration for customers, and it will always be one of the biggest factors. No one wants to lose the opportunity of saving some extra bucks after all! Solutions powered by artificial intelligence can implement self-learning algorithms to offer recommendations for price optimization.
AI solutions can run an analysis of the price preferences of customers based on their previous transactions for similar products. Besides, with the help of AI, you can also compare your prices with the prices offered in the same segment by your competitors.
Subsequently, you can optimize your prices to ascertain what is a mutually beneficial price for the company and the customers. If you can have a customer-oriented pricing strategy based on the price optimization benefits of AI, you have a great chance of retaining your customers. Price optimization gives you a brilliant opportunity to offer exclusive prices to your most valued customers.
With the price optimization feature enabled by AI, you can improvise on your prices to ensure that you neither lose your customers nor your profits. It is an extraordinary competitive advantage for any business to have. Would you not want to excel in your business with such smartness driven by AI?
5. AI Can Be A Major Boost For Sustainable Business Practices
In recent years, there have been some paradigm shifts in buying patterns of customers. A lot of customers are now driven by the urge to switch to businesses that undertake sustainable business practices. Given the visible impacts of climate change and environmental degradation, customers are now expressing a greater concern for the environment. In simpler terms, contemporary consumers have pledged to go green.
To substantiate, as per Harvard Business Review, 65 percent of consumers assert that they prefer buying from sustainable brands. Probing further, artificial intelligence is at the forefront of innovation that businesses need to adopt sustainability. In every industry, artificial intelligence is introducing new opportunities for businesses to go sustainable without compromising on profits.
When you incorporate AI into your business, you too can have a more sustainable approach to your business. The endorsement of such an approach will play a pivotal role in customer retention as well as acquisition.
In fact, cultivating sustainable practices in the workplace can also be a great way to boost employee engagement and retention. Employees feel more committed while working for an organization that looks beyond its business benefits.
It would not be incorrect to say that the future belongs to sustainable businesses. Having said that, artificial intelligence will be the overwhelming driving force behind excellence in sustainability. The preference for buying from eco-friendly businesses will only increase among the consumers in the coming years.
To conclude, AI is the future, and we must align with it in every way possible. In terms of customer retention, it is vital to pay heed to the fact that even a 5 percent hike in retention rates can amplify profits up to 95 percent. Having said that, there is every reason why businesses should leverage the prowess of AI to be at the top of their client retention game. With AI, you can predict what customers prioritize while making purchase decisions. Based on this credible prediction, you can offer personalized value to them and cultivate strong relationships.