Marketing expert Steven Van Belleghem mentioned it in a recent interview: brand loyalty becomes increasingly important in the AI era. Artificial intelligence has a significant impact on the relationship between consumers and brands. Brand loyalty, once based on traditional values and brand perceptions, is now influenced by advanced algorithms and hyper-personalized recommendations. As a result, the way consumers make decisions is changing.
LOYALTY
Traditionally, brand loyalty was often based on long-term interactions, heritage, and trust. Consumers chose brands that offered reliable quality and established an emotional connection. In the AI era, these aspects are supplemented and even overshadowed by the emergence of advanced technologies.
HOW WE MAKE CHOICES
The way consumers make decisions is changing. Previously, when you wanted to buy something online, you went to Google, where you received various information to base your choice on. But if a chatbot like ChatGPT or the TikTok algorithm makes that choice, a completely different decision pattern follows. Instead of pages of information, you receive a few hyper-personalized proposals that supposedly are the best choice for you. There is a much larger filter on the decision-making process.
STAY TOP-OF-MIND
Branding and a strong brand perception are therefore crucial for brands to get through that filter. A consumer who asks their search assistant to buy a PATAGONIA t-shirt will get a PATAGONIA t-shirt. If they just ask for a t-shirt, there is a very high chance that another brand will be suggested. To be easily found as a brand, it is necessary to maintain the relationship with customers and to stay top-of-mind.
4 WAYS TO USE AI AND ALGORITHMS FOR BRAND LOYALTY
AI and algorithms pose an additional challenge for brands to stay top-of-mind. At the same time, they offer new opportunities to build your brand.
1 HYPER-PERSONALIZATION
One of the main drivers behind the change in brand loyalty is the personalization that AI enables. Algorithms analyze vast amounts of data, ranging from online searches to social media usage, to form a detailed picture of the individual consumer. This allows brands to deliver personalized offers, content, and even products that seamlessly align with the needs and preferences of the consumer. By providing relevant content and products, customers feel understood and valued, increasing their engagement and loyalty to a brand.
2 ENHANCED CUSTOMER EXPERIENCE
Delivering a personalized experience, from the first touchpoint to purchase and follow-up, also contributes to a positive customer experience. Customers appreciate the effort brands make to approach them in a personal way. This leads to an emotional connection and strengthens the bond between brand and customer.
3 INCREASE CUSTOMER LOYALTY
Using AI and personalization, brands can anticipate customer needs and proactively provide solutions. This increases customer satisfaction and strengthens loyalty. Customers are more likely to stay with a brand that consistently adds value to their needs.
4 OPTIMIZATION OF MARKETING EFFORTS
Hyper-personalization enables brands to target their marketing efforts more efficiently. By anticipating future consumer behavior and proactively offering personalized offers, you can elevate the relationship with your customer. By delivering the right message to the right person at the right time, marketing budgets are spent more effectively, and resource wastage is minimized. This positively impacts the overall ROI of marketing campaigns.
USE IT OR LOSE IT
The advent of AI and hyper-personalization brings new challenges to maintain and build strong relationships with consumers. At the same time, it offers new opportunities. AI will no longer be the factor that wins you the game but a minimum requirement to participate. Only by remaining relevant and innovative as a brand will you be able to win and maintain the trust of consumers and stay top-of-mind in the AI era.