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Business Proposal for AI Applications: The use of AI in customer predictive analytics

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Table of Contents
Introduction....................................................................................................................3

AI in customer predictive analytics................................................................................3

Proposed AI System: AI-powered customer profiling...................................................4

Research Findings..........................................................................................................6

Issues with Proposal.......................................................................................................6

Benefit with Proposal.....................................................................................................7

Conclusion......................................................................................................................8

References......................................................................................................................9
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Introduction

The emergence of artificial intelligence (AI) has revolutionized the dynamics of the

commercial sector. AI technologies are altering the way marketers used to conduct business

and these changes are so significant that it has become impossible for marketing managers to

disregard the need of investing in and using AI as an important component of the marketing

function. Souza & Leung (2021) explains that companies that have integrated AI in their

Customer Relationship Management (CRM) and marketing as a whole, have claimed

considerable benefits on the company’s development in terms of customer loyalty and

profitability. The human user may then be presented with a list of possible actions by

artificial intelligence software. Using artificial intelligence, people can simulate the likely

consequences of various actions and speed up the decision-making process.

AI in customer predictive analytics

Given the enormous growth in consumer-generated digital data and the ensuing need

to have strategic and critical customer data, predictive analytics software has the largest

market share (Schweyer, 2018). Schweyer (2018) explains that in the foreseeable future, we

may anticipate a constant growth in the need for intelligent virtual assistants. Similarly, This

digital age, marketing approaches have begun to employ technology to gather and analyze

vast datasets of clients in order to focus a particular market for their goods or services

(Schweyer, 2018). Because these information outputs provide valuable understandings for a

variety of businesses, the expression "customer is king" may be advantageously applied to

sutomer targeting, where customers are treated as if they are kings by satisfying their needs

and preffrences in a timely manner. This project proposes the use of AI in customer

predictive analytics in marketing activities. Customer predictive analytics in marketing

activities should be optimized for customer emotion and be implemented in real-time.

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Target marketing is primarily concerned with establishing a practical strategy for

tailoring goods and services to the needs of certain target audiences. Depending on how they

define their markets, companies may build a variety of strategies; the more relevant their

target market, the more successful their strategies will be. Developing successful and efficient

marketing strategies involves carefully identifying and segmenting target audiences. Prior to

designing a strategy for each segment, marketers split a big market into smaller groups of

clients that have similar wants, interests, and priorities. Marketing institutions would be

required to research the markets to target individual clients, which would be time-consuming

and expensive. AI, on the other hand, may now be used to narrow the market down to more

particular goals thanks to the advancement of technology. For marketers, the use of machine

learning and data science allows them to make highly focused judgments that are both precise

and very detailed. It is possible that the AI-driven marketing machine will employ sensory

inputs such as the gesture, object, and face recognition to identify current market conditions.

Proposed AI System: AI-powered customer profiling

In particular, AI's machine learning skills may be used to analyze the ever-increasing

amount of data and improve the quality of data for usage. According to Souza & Leung

(2021), when using AI, it is possible to forecast whether or not a consumer would make

another purchase for a certain product based on their experiences with other e-commerce

platforms. The patterns may be utilized to determine who the intended audience is in the end.

It is critical for businesses to identify their target market in order to maximize profits while

minimizing expenditures. The search engine gives info depending on the user's keywords

(Hopkinson et al., 2018). The computer is becoming smarter and wiser thanks to AI.

Hopkinson et al. (2018) explain that Artificial Intelligence can analyze the text and draw

conclusions based on keywords, the semantic index, and synonyms. Further, AI can detect

and forecast a user's level of intensity automatically. Every consumer contact with the
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Internet may be used for product optimization with artificial intelligence, unlike the

conventional segmentation that relies only on a customer's demographics.

Customer activity patterns may be analyzed and predicted using machine learning in

order to pinpoint the most likely recipients of marketing and advertising efforts. Using AI,

firms can establish strong contact with their consumers at every step of the process,

depending on their interests and demographics (Zulaikha et al., 2020). To improve sales and

profits, businesses no longer have to spend money on a broad advertising campaign when

they can instead generate content that is tailored to the specific needs of each group of their

target audience. As a result of their ability to pinpoint their ideal consumers, they may

significantly reduce the amount of resources they need (Zulaikha et al., 2020). Artificial

Intelligence (AI) may help firms better understand, predict and evaluate their customers'

needs, so they can spend their time and resources on more challenging activities. By using

machine learning, AI revolutionizes marketing by delivering high-quality data (Schweyer,

2018). A trial-and-error approach is also used to operate the outputs without the requirement

for a human operator. Thus, clients may be segmented into various categories, allowing for

highly focused niches in marketing campaigns. Artificial intelligence in marketing may be

summarized in form of a transaction between clients A and B. when Client A uses Baidu as

his predominant search service to find appropriate online sites for various mobile phone

specifications, and when Client B utilizes Chrome to search a YouTube video about newest

phone trends in the market. AI can suggest and direct the client to the same mobile phone

supplier that offers new phones with trending features to both customers. This illustrates how

artificial intelligence can determine the needs of both clients despite the fact that they are

using differentiated search methods.

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Research Findings

Data analytics employing massive datasets has lately been popular among businesses

seeking a more in-depth understanding of their target audience. Data analytics and business

intelligence (BI) software expenditures by American corporations have surged, with a

projected USD 191.60 billion USD alone by 2025, as a result of this growth (Wahua &

Ahlijah, 2020). It is expensive for large firms, and considerably more so for small enterprises.

Because of this, many firms have begun to use AI to guarantee that their customers'

experiences are informed and convenient at every stage of the trip. According to a recent

Forbes article, 75% of companies adopting AI have seen an increase in customer satisfaction

of 10% or higher. The artificial intelligence-derived business industry is expected to expand

to $3.9 trillion by 2022, according to Gartner's latest analysis (Roy, 2021). More than 40

percent of data science work will be automated by 2020, and this trend is not going away

anytime soon.

Issues with Proposal

This is an issue since AI-powered customer profiling overlooks essential input

because they do not capture significant emotional reactions. According to Khan & Iqbal

(2020), people are willing to rate companies favorably even if they have had a bad experience

with their goods or services. These surveys may lead businesses to lose clients without their

realizing it since they hide large levels of consumer unhappiness. Further, in relation to

fundamental human rights, AI usage raises questions about privacy. Using AI, numerous

corporations are able to follow any individual's online actions, which ultimately leads to a

loss of privacy and even societal tyranny (Gulmezoglu et al., 2019). Users' everyday

activities and data are collected by this new technology, which may include particular habits

or personal acts. This is a perfect illustration of the potential dangers posed by AI in regard
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to privacy issues, even if AI may give users access to all aspects of the target

customers' lives.

Benefit with Proposal

The use of AI in customer predictive analytics offers three benefits outlined as

follows.

I. Offer value-added services for customers: AI and machine learning-based

customer targeting puts marketers and developers in control of their preferred

modes of interaction and future growth. Ultimately, its mission is to help

businesses accomplish their objectives by providing greater value-added

customer experiences and targeted offerings. Such efforts encourage

meaningful and desired interactions with the clients they are aimed towards.

Using AI and machine learning, companies might gather this data to forecast

certain client behaviors and decision-making in order to better communicate

with high-value or specialized customers.

II. Provides for the participation of the client: Successful sales and marketing

strategies depend heavily on having a thorough understanding of the buying

habits and purchasing patterns of the target audience. Artificial intelligence

(AI) may provide suggestions to merchants on how to best display and

categorize their products depending on the interests of their customers.

III. Offers greater customer satisfaction. With each passing day, clients' attention

spans are becoming shorter. As a result, grabbing clients' attention at the

appropriate moment and in the right manner has become more important for

marketers. It is possible to utilize artificial intelligence in the purchase data

analysis of a certain product to predict when consumers will need the same

goods again and send an automatic SMS to remind them to top up or

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repurchase. Today's marketing relies heavily on data-driven decision-making

to enhance the customer experience, personalize services, pinpoint specific

customers, and foster a sense of brand loyalty.

Conclusion

In conclusion, this technology will continue to evolve, and companies must take

advantage of this to stay ahead of their rivals and prosper in a competitive market. For a

better user experience, AI may handle certain sorts of material based on client preferences.

As a result, marketers can make better decisions and put their plans into action. To better

serve their consumers, businesses may free up time and resources by using AI to automate

repetitive tasks. Consumers' movements may be assessed on a more personal level thanks to

AI, which can forecast properly based on micro-segmentation. This allows marketers to

understand what drives or contributes to a long-term connection between their firm and

customers. As a consequence, businesses are able to establish more personal relationships

with their consumers, which in turn leads to increased brand loyalty and long-term business

relationships.
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References

Davenport, T. H. (2018). From analytics to artificial intelligence. Journal of Business

Analytics, 1(2), 73-80.

https://www.tandfonline.com/doi/full/10.1080/2573234X.2018.1543535

Gulmezoglu, B., Zankl, A., Tol, M. C., Islam, S., Eisenbarth, T., & Sunar, B. (2019, July).

Undermining user privacy on mobile devices using ai. In Proceedings of the 2019

ACM Asia Conference on Computer and Communications Security (pp. 214-227).

https://dl.acm.org/doi/abs/10.1145/3321705.3329804

Hopkinson, P., Perez‐Vega, R., & Singhal, A. (2018). Exploring the use of AI to manage

customers’ relationships. In Academy of Marketing Workshop: Artificial Intelligence

in Marketing–The field, research directions, and methodological issues (p. 7).

https://www.researchgate.net/profile/Rodrigo_Perez-Vega/publication/

324647995_Exploring_the_use_of_AI_to_manage_customers'_relationships/links/

5ad9c3a60f7e9b28593cf22a/Exploring-the-use-of-AI-to-manage-customers-

relationships.pdf

Khan, S., & Iqbal, M. (2020, June). AI-Powered Customer Service: Does it Optimize

Customer Experience?. In 2020 8th International Conference on Reliability, Infocom

Technologies and Optimization (Trends and Future Directions)(ICRITO) (pp. 590-

594). IEEE. https://ieeexplore.ieee.org/abstract/document/9198004

Roy, M. (2021). AI-Powered Workforce Management and Its Future in India.

https://www.intechopen.com/chapters/76783
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Schweyer, A. (2018). Predictive analytics and artificial intelligence in people

management. Incentive Research Foundation, 1-18.

https://theirf.org/am-site/media/2018-ai-study---white-paper---pdf-updated.pdf

Souza, J., & Leung, C. K. (2021). Explainable Artificial Intelligence for Predictive Analytics

on Customer Turnover: A User-Friendly Interface for Non-expert Users.

In Explainable AI Within the Digital Transformation and Cyber Physical Systems (pp.

47-67). Springer, Cham. https://link.springer.com/chapter/10.1007/978-3-030-76409-

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Wahua, L., & Ahlijah, Y. (2020). Business intelligence costs and firm performance: Evidence

from selected top ECOWAS’banks. Journal of Economics and Trade, 5(1), 1-17.

Zulaikha, S., Mohamed, H., Kurniawati, M., Rusgianto, S., & Rusmita, S. A. (2020).

Customer Predictive Analytics Using Artificial Intelligence. The Singapore Economic

Review, 1-12. https://www.worldscientific.com/doi/full/10.1142/S0217590820480021