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Chatbots and loyalty programs: Breakthrough marketing technology?

Rewards can be a strong motivator but implementing it in a cost-effective way that enable personalization at scale, was quite a challenge before AI and chatbots came along. Now we levelled the playing field between brands big and small: chatbots are taking over loyalty programs, increasing customer loyalty and retention, boosting profitability.


The majority of customers today will be very pleased when they are provided with easy to access rewards. This must be things which is easy to use. Consumers mostly appreciate personalized rewards especially if it’s one of your top brands. According to statistics more than 70% of people have indicated that they find rewards programs very frustrating. This is another area where chatbots can be successfully implemented. This can help to more effectively facilitate all of the consumer’s concerns. It will be especially useful when a business makes use of a conversational AI chatbot. It does not really matter whether such a chatbot will be making use of texts or audio. This chatbot can then be used very effectively to keep track of all rewards as well as the behaviors of consumers and this can be done in real time. This can help to put together reward programs which is suitable for certain segments of your target audience. Chatbots can also help to increase personalization to ensure a better satisfaction rate for all consumers. Because of chatbots consumers will be able to redeem, access and track your rewards program. There are many excellent benefits and therefore any business who have not yet implemented a loyalty chatbot is forfeiting many benefits.

Loyalty programs are very effective


According to available statistics over 70% of people who have received loyalty rewards will tell their family and friends about their experience. Almost 90% of consumers have indicated that they are in favor of loyalty programs. People who shop at businesses who have a loyalty program will spend at least $40 more than consumers who do not have access to a loyalty program. It has also been discovered that people will rather do business with a company which has a loyalty program before they go to a business that does not have one. When making use of a chatbot this can help to eliminate most of the problems normally associated with loyalty programs. Loyalty programs is a lot more efficient when a chatbot is used. Sales will mostly increase and there will be better overall results. This is because of the ability of chatbots to solve many of the little issues which consumers might have. This can help to remove many of the problems which may be encountered by brands. The issue is not so much; what products or services you are offering. The important thing is the perceived value which the customer is placing on your product or service.

Determining the value of your program


The cost of your loyalty program is determined by the ultimate benefits which you will consumers will eventually receive. An additional issue will be the amount of friction and resistance they encounter during that process. Interestingly when one looks at the available statistics 90% of consumers would prefer to receive text messages instead of phone calls. It is important to ensure that your chatbot engaging with the consumer on their level. The majority of people are involved in messaging apps and on social media and that is where your chatbot should also be. One of the primary benefits derived from chatbot implementation will be the fact that they are able to simplify the entire loyalty program process. This is simply not possible with other systems. Making use of conversational AI chatbots are more effective because they can grow, learn and also respond to consumer requests. Because of this instantaneous interaction this can help to raise the satisfaction level of consumers. They will be more comfortable with your loyalty program and will also be more likely to support your brand.

The importance of considering consumer values


Many studies have been conducted over the last couple of decades. In this way it was possible to determine the 30 most important consumer values. Those values fall under 4 categories and they are emotional impact, social impact, financial benefits and how life-changing the brand will be. Understanding this basic principle can really help a business to successfully meet the expectations of the consumer. When this is done successfully the results will be a very strong and successful loyalty program. Studies has been done with chatbots in the hospitality industry. It has been discovered that those guests who have been interacting with the chatbot has indicated a higher level of satisfaction during their stay compared to those guests that has not interacted with the chatbot. Something which has to be understood relating to loyalty programs is that they have both emotional and functional attributes and mostly they are somewhere in between. This can have an impact on how they will benefit consumers. The same thing is also true about most of the available airline reward points. This is an industry which is often associated with friction and frustration. Therefore, a rewards program which can provide consumers with attractive discounts is certain to be popular. Things such as mileage points has been used for many years.

Why chatbots are simply the best option to drive loyalty programs:


Making use of this artificial intelligence entities can help to better address the needs of your consumer. This can remove a lot of the frustration and strife and ensure more effective interaction. Chatbots have been extremely successful to eliminate consumer frustration. This is not the case as far as airline mile rewards is concerned. They have been known to be very untrustworthy. There are things such as bump provisions and blackout dates which can be very frustrating to consumers. Another issue is the problems with the registration process. Other issues are the long contact forms, all those nonuse stipulations, the long list of requirements and the problems which is experienced when trying to track their rewards. Because of the lack of interaction many consumers actually forget that they are part of the program. When they eventually try to redeem their mileage points they cannot remember the contact number, some have misplaced their cards while others have forgotten the login information.

A very ineffective process


When people find themselves at the checkout counter at airports they simply do not want to be bothered with the need to sign in and go through that lengthy process. Many people simply feel that the process is to tedious and therefore the rewards which can be obtained simply does not make up for the time which they have to invest. This is why many people simply do not make use of the mileage point rewards program. Chatbot implementation will ensure better interaction between airlines and consumers and this can result in significantly more people who will actually make use of the rewards which is offered.






Picture of Avi Ben Ezra

Avi Ben Ezra

Avi Ben Ezra is the CTO of SnatchBot, a leading chatbot platform and marketplace. His research in artificial intelligence is world renowned and as a serial entrepreneur, he advises many other startups on marketing technology. Avi has a strong following in the technology field.

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