Every problem begins with a red flag. That loyal customer isn’t buying as much anymore.
Companies used to depend on marketers “knowing the customer” to notice those signals. That was possible when customers numbered in the hundreds. But what about hundreds of thousands? At that point, one must automate.
AI will notice the “red flags,” as it monitors the retailer’s online presence. At that point, it’s up to the company to craft the response that keeps a customer from bolting for a competitor.
Doing this is not quite as easy as just pressing a button. Although AI can be modeled to aid with customer retention, it’s up to the marketer to make best use of such tools to find — and read — signals only they can interpret.
Looking for Clues
“It has to be dead simple. Who are my best customers? It’s an answer to a marketing question. It is not data science,” said Jared Blank, SVP for data and insights at Bluecore, which provides an AI-driven retail marketing platform. And therein lies the key to Bluecore’s approach to its product. “We’re able to use sophisticated models [which don’t require] a team of data scientists.” he said.
The model can be crafted to spot the customer who is about to slip away. Did the customer fail to make a purchase in the past six months? Red flag. Is the customer not opening an e-mail bearing an offer? Red flag. Is the customer spending less time on the web site? Red flag. The AI can be keyed to notice these events, triggering a “win back campaign,” Blank explained. “The model is focused on the marketer’s need.”
Albert, the intelligence marketing solution, also takes an evolutionary approach. “Albert [the AI product] doesn’t know what to do until you set the parameters for it.” according to Charlie Guevara, VP of enterprise sales.“Albert comes pre-configured to operate holistically across channels.” The AI will learn from a company’s data as it executes a campaign, in effect gaining familiarity with the customers and how well it is reaching them, he explained.
While Albert is not built to be a customer retention tool, it can aid retention by finding unexpected associations that marketers may overlook. Guevara offered the example of an online firm that was pitching loose-fitting apparel at a target audience of women between the ages of 35 and 45. The product also proved popular with pregnant women, a group the marketers were not trying to reach, but noticed once the data was analyzed. And they broadened the pitch accordingly.
When a marketer spots unclicked e-mails, diminished web traffic, or fall-off in purchasing, he or she can respond with personalized offers based on what is known about the customer through the AI-powered marketing platform. “We center on personalization and different customer experiences,” said Meghann York, director of product marketing at Salesforce Marketing Cloud. Products are commodities now, and the customer knows they are in control, York noted. If they can’t get what they want from one company, they will go to another. “The customer is less loyal than they have ever been.” she said. “Personalized engagement is the path to retention.”
Offense or Defense?
Customer retention and customer acquisition are the yin and yang of marketing. The old rule of thumb was that it costs more to find a customer than to keep one. Using AI, that can still be true…in some instances.
“The cost of acquiring a customer has been driven up in the past year or so,” noted Blank. Facebook and Google have gotten wiser about the audiences they measure and deliver, resulting in ad rates rising up to 70% to reach certain groups, he said. Retailers are resorting to subway ads, stores, direct mail, catalogs “because the cost of online acquisition has become difficult,” he added.
Guevara sees the challenge differently. One can find new customers by using Albert to “find new audiences within the potential sea of customers.” Execute a new message that reaches them, and you get new customers.
As Shopping Changes, Selling Changes
Keeping the customer is becoming a quest that is changing the very make-up of marketing teams. As AI is offers a different view into the customer base, function-based methods become outmoded.
“Market research had different teams of people focusing on different aspects of the (sales) life cycle,” York said. AI collapses those silos, resulting in a cross-channel team to acquire customers, instead of separate groups for e-mail and advertising.
“AI can improve work flow and get the marketing department more efficient.” added Blank. With AI doing some of the work, fewer people are needed to crank out targeted pitches.
Even when you need fewer humans to do the same work, you still need at least one human to keep an eye on the AI. “You check the campaign to see if it is proceeding as expected,” Guevara said. “It’s like being a co-pilot who puts the plane on auto-pilot.
“At the end of the day, it (AI) is just a tool,” Guevara added.