Who run the world? Your customers, of course. For years you have read in professional literature and you hear during marketing conferences how crucial the customer experience is. How do you do that, create an extraordinary customer experience tailored to your customers? Have you already walked the track of artificial intelligence or do you want to do so soon? Then definitely take these 5 insights with you.
1. Focus on ‘Customer lifetime value’
An eye-opener to start: not all your customers are valuable. According to Pareto’s well-known 80/20 rule, 20% of your customers generate 80% of your profits. In other words: 8 out of 10 customers are not very profitable. What’s more, quite a few are even loss-making. And yet many companies continue to target all their customers. After all, marketing campaigns are often still an ad hoc effort: if a campaign generates new sales, it is considered successful. But for the company, the investment only really pays off if the customers keep coming back afterwards.
Enter the importance of customer lifetime value (CLV): the value of the customer over the entire period that they are a customer of your company. To determine that value, you have to take into account the historical and future revenues and costs of all activities for sales, marketing and operational activities (both one-off and recurring). That is quite a complex assignment for which gut feeling – in many cases still the basis for decisions among sales and marketers – is not enough. Artificial intelligence, on the other hand, calculates this very simply and keeps it up-to-date.
2. Remember: AI-driven marketing is becoming the new normal
‘Digital first’ has been the adage in marketing and sales for the past decade. Then came ‘mobile first’. Both concepts, of course, remain crucial. But we propose one more: ‘AI first’. Every business – yes, even a freelancer or smaller retailer – sits on a mountain of data. Leave there AI like machine learning loose and you immediately get a lot of interesting insights about your prospects and customers.
How machine learning works? Algorithms look for patterns in data using advanced statistical exercises. In this way, as a marketer, you gain a clear insight into who your customers are and how they behave. What characterizes them, what drives their decisions, what is their customer lifetime value and on which triggers (different for everyone) should you use marketing to realize a higher customer lifetime value?
3. Use dynamic behavioral segmentation instead of traditional ABC segmentations
Once you have insight into customer behavior (and you know how valuable that behavior is thanks to the customer lifetime value), you can use that to segment and thus improve the customer experience. With the ultimate goal: the customer lifetime value verhogen. Segmentation is not new. For years, companies have split their customers into different segments (A, B, C or Gold, Silver), often based on the revenue they generate. However, segmentation based on historical sales figures is not sufficient to continue to offer your customer the right products and services at the right time, via the right channel, in the future.
Artificial intelligence is a godsend for segmentations. It searches all (un)structured customer data and uncovers patterns. From customer cards and cash register systems to call center data, invoices, e-mails, shopping baskets, social media, web data and data from ERP systems. The more information, the better the insights, the more detailed the behavioral segmentation and the better you give your customers a klanten personalized experience can offer. Customer behavior changes constantly throughout the year. Then customers dynamically shift to other segments so that they always match their most correct behavioral segment. That is truly customer-oriented marketing.
4. Also look at the other marketing areas where AI makes the difference
Artificial Intelligence can make your marketing and sales efforts smarter in many more ways.
Pattern analyzes of lost customers
Through pattern analysis of your lost customers (churn analysis), AI allows you to identify these churn characteristics in your customers early, so that you can avoid the possible churn. We all know that finding a new customer costs many times more than keeping an existing customer loyal. AI is of gold value here to tackle churn preventively.
Using natural language processing, you build bots to answer – repetitive – questions from your customers (chatbots, voicebots). This way you help your customers immediately, while your employees have more time to focus on things that add real value.
Use computer vision to improve your services and the shopping experience of your customers. For example, the technology searches for mentions of your products and services in video images and studies the shopping behavior of your customers while they are in the store. How they shop in your store, which products they evaluate but then put back, which products they put in their basket and then have them pay without a checkout and let them go outside (think of Amazon Go). This way you understand your customer better, so you can serve him better.
Dynamic Pricing Algorithms
With dynamic pricing algorithms, you automatically adjust your pricing if, for example, demand increases or decreases or if your competitor adjusts its prices. Applying the principles of price elasticity in real time will increase your profits. Airlines have been using this principle for some time, and the potential is certainly just as great in sectors such as retail and e-commerce.
Demand forecasting predicts when customers will purchase a particular product. Based on their current buying behavior, past purchases, relevant patterns and trends in the market, etc., you can predict where and when you need to deploy marketing and sales activities to achieve commercial objectives.
5. Start small, fine-tune and gradually expand
You think your organization is not yet ready for AI-driven sales and marketing? I know you are. Even the smallest piece of customer data – just your customers’ sales transactions, for example – is enough to start your first project.
Dive into your data, ideally together with a data scientist, and analyze the behavior of your customers. You are guaranteed to discover triggers you can use to create value for every customer. You then use those insights in your marketing campaigns. You will quickly notice that your AI-driven approach will appeal to your customers and that you will get more return on your marketing investment. You can gradually refine or expand your approach.
an open mind
One thing is a must if you want to use AI for marketing and sales: a desire to change your marketing approach and focus on your customer data. The classic ‘marketing from the gut’ is getting a major upgrade thanks to AI – and your marketing can only benefit from that!
Using artificial intelligence in sales and marketing: it sounds very nice. But what should you pay attention to? After all, AI is a broad domain. Do you enable AI to answer questions from visitors to your website? To determine your prices smarter? To make cross-selling proposals? All possible, but not before you know who your really valuable customers are – and they may be different than you think.
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