Artificial intelligence has irreversibly transformed all industries, including healthcare, education, entertainment, the food industry, and many more. One of the most intriguing developments might be the personalization of the customer journey.
AI-enabled personalization
This term entails the usage of AI to generate messages and recommendations tailored to each person. AI creates personal interactions by relying on data analysis and user activity (Hayes & Downie, 2024).
Businesses leverage AI personalization to comply with today’s consumer-centric approach. This tool employs data analysis and acquires a deep understanding of the consumer perspective. It not only offers efficient communication with their audience but also facilitates customer loyalty, forms new connections, and develops the journey of customers each and every step. Furthermore, it ensures a never-ending and relevant experience by offering what a particular customer wants at the appropriate moment (Desai, 2022).
In time, customers’s expectations for personalized interactions have risen. As artificial intelligence enables personalized engagements, customers now demand personal interaction with brands (Shariff et al.). According to research, 71% of people want businesses to provide personalization, while 76% of those customers are dissatisfied if their interactions with companies fail to correspond to their particular needs. Additionally, in an environment with poor customer loyalty, non-tailored interactions can constitute a risk in business. Conversely, businesses that thrive at tailoring content acquire 40% greater profits from such operations than typical competitors (Arora et al., 2021).
Benefits
- AI’s ability to generate relevant experiences in terms of individuals’ context helps companies achieve greater customer satisfaction and establish reassuring connections with their target.
- This tool cultivates favorable interactions with customers while keeping them engaged for longer periods of time by presenting content that they are interested in (Hayes & Downie, 2024).
- Meaningful recommendations boost the possibility of a purchase, which leads to more revenue.
- Automation through artificial intelligence minimizes the costs required for customer support and marketing activities.
- Tailored content based on consumer behavior gives an edge over competitors, and some companies, such as subscription services, employ it as their fundamental strategy.
- AI personalization assists a more accurate decision-making process by giving information about present and potential consumer activities. Hence, companies can gain vital insights about their most significant customers, empowering them to improve continuously (Hayes & Downie, 2024).
The Ethical Dimensions and Issues
Among the many benefits, there are some key ethical concerns being raised about the overall potential of misuse. Considering that AI monitors a huge amount of data to operate successfully, the main challenge is privacy (Gao et al., 2023). Another issue revolves around AI systems that might possess inherent biases, possibly leading to unjust or prejudiced targeting and information diffusion. Marketing professionals must follow the principles of transparency, ethics, and privacy while tracking and collecting user data. Moreover, if several players responsible, including marketing professionals, researchers, and legislators, collaborate, AI can be utilized ethically in the realm of advertising business (Gao et al., 2023).
Takeaways
The advent of AI has inevitably altered the way businesses operate in the contemporary world. Specifically, the delivery of customer service has evolved with AI-enabled personalization. On one hand, it has very efficient outcomes, including tailored content, product recommendations, and cost reduction. However, the deployment of AI for marketing purposes also raises some ethical concerns around privacy and dissemination of biases embedded in AI. Businesses should set a balance between advantages and challenges. This helps the companies to counter the increasing competition in the market by enabling their customers to express who they are while still complying with their needs.
References
Arora, N., Schüler, G., Fiedler, L., Ensslen, D., Stein, E., Robinson, K., & Liu, W. W. (2021, November 12). The value of getting personalization right-or wrong-is multiplying. McKinsey & Company. https://www.mckinsey.com/capabilities/growth-marketing-and-sales/our-insights/the-value-of-getting-personalization-right-or-wrong-is-multiplying
Desai, D. (2022). Hyper-personalization: an AI-enabled personalization for customer-centric marketing. In Adoption and Implementation of AI in Customer Relationship Management (pp. 40-53). IGI Global.
Gao, B., Wang, Y., Xie, H., Hu, Y., & Hu, Y. (2023). Artificial Intelligence in Advertising: Advancements, Challenges, and Ethical Considerations in Targeting, Personalization, Content Creation, and Ad Optimization. Sage Open, 13(4). https://doi.org/10.1177/21582440231210759
Hayes, M., & Downie, A. (2024, September 12). Ai personalization. IBM. https://www.ibm.com/think/topics/ai-personalization
Shariff, F., Ebrahim, S., Ivic, S., Dulay, S., Dalmia, N., & Ahuja, M. (n.d.). Hyper-personalizing the customer experience using data, analytics, and AI . Deloitte. https://www2.deloitte.com/content/dam/Deloitte/ca/Documents/deloitte-analytics/ca-en-omnia-ai-marketing-pov-fin-jun24-aoda.pdf
