Large businesses are refocusing customer engagement investment on emerging technologies, notably AI, amid claims that traditional techniques such as loyalty programmes are being deprioritised due to a perceived poor return on investment.
The Future of Customer Engagement study from Apply Digital quizzed 500 senior managers from large business and asked what tactics had offered the best ROI. It found that 71% of respondents identified AI compared to just 15% for loyalty and rewards programmes; although it is not clear whether this was due to the low cost of AI tools compared to the operational costs of loyalty schemes.
Even so, low-levels of confidence have prompted over a third (38%) of organisations to plan for zero to moderate spending on loyalty programmes over the next two years.
Despite reduced investment, 47% of respondents still view loyalty and rewards programmes as effective tools for driving repeat business, however, closer analysis reveals a notable split in opinions; while 43% of senior leaders believe customers are losing interest in loyalty programmes, an equal percentage disagrees.
The research also highlights that organisational misalignment and siloed data are the primary barriers to achieving better results from customer engagement strategies.
Many large business struggle to unify their customer data, making it difficult to deliver the types of cohesive, personalised experiences that drive revenue.
Apply Digital chief strategy officer Lauren Milne said: “As companies reassess their strategies, many are turning to AI tools to enhance customer engagement. This does make a lot of sense, there’s little doubt that AI-driven personalisation tactics play a huge part in driving efficiencies and conversions.
“However, that doesn’t mean that there isn’t still a place for more traditional CX strategies such as loyalty, the trick is reimagining and reinvigorating them through the lens of AI.
“AI is seen by many as a solution to the relative decline in the effectiveness of loyalty. However, businesses are unlikely to meet their targets until they have addressed the underlying structural challenges that hold them back from moving to a data-first model.
“AI tools such as chatbots and personalisation engines can be highly effective if they are integrated with existing systems and tools to support engagement efforts. However, this will only work if sufficient investment has already been put into data integration and alignment across teams and platforms.”
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