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Predicting the next purchase.

Posted by Ray Chelstowski on Jun 6, 2022 3:10:09 PM

Years ago, when I was on the account side at an advertising agency, I worked with some clients who had a unique approach to “field work”. They would “tail” customers at retail and study buying behavior in a way that today most folks would consider a bit invasive. But at that time data platforms, AI and machine learning weren’t scarce; they didn’t exist. Now instead of following customers through your store aisles loyalty data combined with purchase history metrics can be leveraged to provide brands not only with an understanding of what people have wanted. It can now be mined to tell brands what they want next.

Loyalty program data has always been able to provide marketers with an initial launch point for the sales funnel and customer life cycle, and robust cross-system integration has helped facilitate the single-customer view. But AI and machine learning can take the customer identity, combine it with real-time analysis of customer activity and forecast what the next customer action might be. The result is dynamic delivery of messaging, offers or incentives to influence that activity.

In short, these technologies transform the data-driven marketing approach from an inherently backward-looking process to a predictive one. AI and machine learning can minimize the guesswork that often comes with identifying and shaping the next customer encounter. Used effectively, they are incredibly valuable tools for optimizing loyalty marketing strategies and enthusiasm for these technologies right now is high. In the loyalty and marketing worlds, however, adoption has been more incremental, as brands and retailers determine how AI and machine learning fit into their strategies and how much investment they are worth. It will vary by category and be applied differently to achieve different ends.

But for marketers who want to jump-start the results of their loyalty and marketing programs, being early to embrace the AI revolution will help them do a lot more with the data they’re already collecting by taking more effective action, more immediately. Any marketing approach that can leverage these advantages will pay off in terms of improved customer engagements and increased revenues. It also will keep “field tests” and store stalking to a minimum.

Ray.chelstowski@kognitiv.com

Topics: Customer Data & Analytics, Customer Experience, Personalization, Loyalty Trends, Loyalty Strategy, Customer View, Customer Engagement

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