Your Complete Guide to Leveraging AI to Personalise the Customer Experience
“AI”, “ChatGPT”, “prompt”, “Big Data”, “Gemini”: Are your LinkedIn feed or water cooler chats filled with discussions on the rise of AI? It’s on everyone’s lips! Artificial intelligence is the talk of the town, from conversations over dinner to TV shows and across all business sectors…
Today, we’ll look at its impact on the online customer experience. From personalised product recommendations to real-time support and user sentiment analysis, AI is transforming how companies interact with their customers.
Below, we share our comprehensive guide to leveraging AI to personalise the customer experience.
Why use AI to personalise the customer experience?
1. A more in-depth understanding of consumer expectations
Traditional personalisation and segmentation methods rely on numerous variables:
- personality traits and purchasing habits
- consumer lifestyles
- social status and product choice
- activities, interests and opinions (AIO)
- attitudes and motivation to buy, etc.
Manually gathering and thoroughly analysing this data is a time-consuming task.
AI speeds up the process and provides a more in-depth shopping experience by analysing:
- browsing habits and
- previous interactions with content or services
- real-time customer behaviour across different platforms
📌 Example: Streaming platforms like Netflix and Prime Video use AI-powered product recommendation systems to suggest content based on past user engagement.
2. More helpful real-time interactions
Chatbots and AI-driven virtual assistants have significantly improved the quality of customer support. How? By reducing response times and ensuring effective resolution of problems that customers may have.
Thanks to conversational AI, bots can now understand and respond to complex queries with near-human precision. What’s more, interactions can be written or spoken, and come in various languages!
Not to mention that AI-powered chatbots are available round-the-clock. Whatever the time of day or night, consumers can get answers to their questions.
Finally, predictive AI allows brands to access statistical analyses so they can anticipate potential problems. Businesses can then proactively find solutions and leverage conversational marketing.
📌 Example: E-shops can now boost their sales thanks to online chats. AI-powered chatbots guide users through the buying process, answering their questions and suggesting relevant products in real-time.
3. A hyper-personalised shopping experience
E-tail is one of the sectors that has benefited the most from AI to personalise the customer experience.
The arrival of artificial intelligence now makes it possible to recommend products according to an individual’s preferences. It can dynamically adjust prices based on user demand and interest. It means you can personalise marketing campaigns to target each customer.
This means it boosts engagement and improves customer satisfaction, for a smoother user journey.
📌 Example: E-shops now offer AI-powered virtual fittings, real-time product recommendations, and virtual sales assistants.
4. Anticipating consumer behaviour
As mentioned above, predictive analytics has led to notable advances in improving the customer experience. Because it allows businesses to anticipate customers’ needs before they arise.
This is particularly useful in sectors such as:
- banking: AI detects customers’ consumption habits and suggests tailor-made products and services
- tourism: AI predicts a user’s future destinations based on their browsing history and previous trips
- health: AI recommends personalised care plans by analysing various patient data (genetics, lifestyle, medical history, etc.)
📌Example: Some hotels use AI to enhance their guests’ experience, such as factoring in room requirements and suggesting personalised ideas for nearby activities and restaurants. To do this, they collect data based on guests’ previous stays. If Jean-Marc loves jet skiing, the hotel can, for example, offer him a tempting 20% off jet ski hire when he places his next booking.
5. Striking a balance between personalisation and privacy
The power of AI is growing everyday but, while brands can leverage the power of personalisation, they should be aware of how far this goes so as not to compromise privacy.
To do this, we recommend factoring in the following three guiding principles:
- prioritise the security of user data
- be transparent with your customers about your use of AI
- explain your data collection practices accurately and clearly
📌 Example: You must state your data privacy policy if your site recommends products based on user searches and previous purchases. For example, you can opt for a clause like: “These personalised product recommendations are based on criteria such as your browsing and purchase history, customer segmentation, user behaviour and the buying patterns of others like you”.
The downsides to using AI to personalise the customer experience
Using AI to personalise the customer experience can come with drawbacks.
Data privacy
According to a study, only 51% of consumers believe brands secure their personal data and use it responsibly. This figure stresses the importance of having clear data privacy policies in place.
Reminder 📌
Make sure you comply with GDPR and any other regulations in force concerning personal data protection.
Respect for private life
AI algorithms don’t have a moral compass, can jump to conclusions and can become intrusive. For example, it may recommend baby products to a woman who has miscarried because search engines detected she was pregnant. The result is a personalised customer experience that will damage the relationship between a brand and its customer.
Danger of manipulation
While AI can influence internet users’ behaviour, it should not blur the line between personalisation and manipulation. Over-personalisation, which means offering targeted products and content too frequently, can generate a feeling of mistrust among consumers.
A customer experience that lacks a human touch
Using AI to for personalization could create an overly robotic customer experience. We may live in a high-tech age, but buyers still seek human contact, authenticity and empathy. Companies must find the right balance between automation and a human presence.
Leveraging AI to personalise the customer experience: Let’s sum it up!
Using AI to personalise the customer experience is revolutionising the way companies communicate and interact with their customers. Leveraging artificial intelligence can:
- improve customer satisfaction and loyalty
- identify patterns in customer behaviour
- create customer segments based on their preferences
- stay one step ahead and predict various trends, for example, the problems a customer may encounter with a product or service or when they will be ready to make a purchase
However, companies must be aware of the risks of AI (privacy, danger of manipulation, lack of a human touch, etc.) and guard against them.
For further reading, check out our article on e-tail and augmented reality!
