How artificial intelligence can improve customer engagement

Oct 17 2019 | PayPal editorial staff | 3 min read

From chatbots to self-driving cars, the creation of intelligent machines that “think” more and more like humans is well and truly in force.
Instead of just feeding in large amounts of information and prescribing what we want done with it, artificially intelligent systems can take the provided information, understand what the user wants to achieve and figure out the best way to get there.

Artificial intelligence (AI) is on the rise. According to Constellation Research, the AI market will surpass $100 billion by 2025. For customers, it’s an even more fascinating forecast with Gartner predicting customers will manage 85% of their relationship with a business without interacting with a human by 2020. Here’s why that can be a good thing for both customers and merchants.
 

Tailored recommendations

Being able to predict and find patterns using data is what gives large enterprises the ability to customise their marketing. And the business benefits are clear: Gartner found that by 2020 smart personalisation engines used to recognise customer intent will help digital businesses increase their profits by up to 15%.

But what about the customer benefits? Spotify uses AI to provide music recommendations by monitoring users’ listening preferences and inserting them into a learning algorithm. These predictive analytics can result in highly engaged customers who receive value from sharing their consumption patterns.

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According to Accenture, 75% of customers are more likely to buy from a retailer that recognises them by name, recommends options based on past purchases or knows their purchase history. A tailored recommendation can save customers time and effort, delivering results before they knew they needed it. And this in turn can increase loyalty, brand affiliation, stickiness and spend.

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A simple way for businesses to provide tailored recommendations is through chatbots. You can use these to ask your customers questions and get to know their interests or styles before making recommendations. For millennials who are more likely to shop online and who expect more from the online experience, instant personalisation is key to engagement.
The ability to collect information on customers’ requests and use it to better recognise their needs and serve results tailored to them can be a game-changer.

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Security and fraud monitoring

While not as exciting as self-driving cars, AI is already being used for fraud detection, an important part of the customer experience. In the banking sector, for example, AI analyses consumer behaviour across transactions and devices and flags any unusual account activity. It means all transactions can be monitored 24/7 – something human power could never do. And it’s not just limited to the banking sector: many businesses use data insights to protect themselves against payment fraud, fake accounts and account takeover.

When it comes to security, AI can identify your business’s biggest risks, and help protect you and your customers against those risks so you can maintain a strong reputation and increase customer confidence.
 

Purchase predictions

An emerging area of AI is the ability to predict purchases based on prior customer data. Amazon’s anticipatory shipping project is probably the best example of this. The eCommerce giant has filed a patent with the hope that it will be able to actually send customers items before they even realise they need it. Whether or not that moves into production, it’s big thinking that could surprise and delight customers and take brand loyalty to a whole new level. The process takes look-alike modelling and combines it with AI to product test and create consumer demand.
 
With most customer interactions expected to be done online in the next few years, it’s time to future-proof your business. Tailored recommendations, security and fraud monitoring, and purchase predictions are all proving that AI is here to stay and there are plenty of ways for businesses of all sizes to benefit.

 
The contents of this site are provided for informational purposes only. The information in this article does not constitute legal, financial, IT, business or investment advice of any kind and is not a substitute for any professional advice. You should always obtain independent, professional accounting, financial, IT and legal advice before making any business decision.
The contents of this site are provided for informational purposes only. The information in this article does not constitute legal, financial, IT, business or investment advice of any kind and is not a substitute for any professional advice. You should always obtain independent, professional accounting, financial, IT and legal advice before making any business decision.