How AI-Driven Loyalty Programs Drive Better Business Outcomes

As CTO of Engage People Inc. Len Covello helps companies differentiate loyalty programs to deliver a better experience for their customers.

AI enhances a loyalty program’s key features and helps guide customer decisions through an interactive experience. Customers not only see the number of points and rewards options but also get advice about how best to spend points, combine points with other deals or achieve a larger goal. They get a better experience, and the retailer sees stronger sales and conversion rates.

​AI in loyalty is still emerging, but it’s growing quickly. By 2030, AI is expected to handle 80% of customer interactions. Now is the time to learn how it is transforming customer loyalty and delivering real-time value to customers and brands.

​Beyond A Tool For Retention

Through all of its iterations, the purpose of a loyalty program is to increase customer retention, repeat sales and build brand recognition. With AI in play, loyalty programs are evolving beyond a tool for retention. The program can define customer intent, create personalized value, provide a real-time understanding of point and reward offerings, and trigger immediate action. With these benefits, AI connects a customer’s entire value ecosystem and creates a new value layer that hasn’t previously existed in loyalty.

​Traditional loyalty works through customer segmentation, and pushes tailored campaigns to those customer segments to engage with the customer. AI in loyalty can achieve a higher level of personalized customer engagement. The AI loyalty model is understand-recommend-decide-execute-learn. It is more than a conversational interface or chatbot; it provides real-time intelligence to customers and provides individualized recommendations based on their points and rewards availability. The program can suggest the best way to spend points to maximize financial value. This form of hyper-personalization encourages engagement and ultimately increases conversion rates.