Customers Are Here To Stay: How AI can Boost Customer Lifetime Value

Retaining customers and building customer lifetime value is a crucial aspect to increase conversions. Digital disruption with the advent of Artificial Intelligence and Machine Learning has resulted in a unique challenge for marketers. Though it allows them to provide customers with experiences like never before, it also opens a myriad of options for consumers to choose from. This may have made customer retention a tricky task for organizations. After all, repeat purchases from existing customers is a sign of a healthy brand, since acquiring new customers can be expensive and may often impact the bottom line. While expanding the value and building lasting loyalty cannot be created overnight, disruptive technologies can help.

Let’s understand how organizations around the world are deploying cognitive technologies such as AI to create brand loyalty and adopt agile strategies using their existing data.

Current Scenario

Most organizations understand the importance of collecting data and do it through several digital marketing strategies. But analyzing and implementing this data still remains a distant dream. At best, companies analyze data in silos for a specific campaign. The result is that these organizations only influence a few touchpoints of the buyer’s journey while focusing on specific data related to online conversion rates. To combat this problem, businesses have slowly started embracing AI and ditching data processing through traditional methods.

Harnessing the Power of AI

There are several ways in which organizations can harness the power of AI to empower decision making. The low hanging fruits such as sales forecasting and cross-sell/up-sell can help companies showcase proof-of-concept while understanding how vital it is to change the company culture for it to be successful. A mindset shift is required if teams want to adopt agile strategies by acting on crucial insights and create longer customer lifetime value. Some of the ways that AI can be incorporated into effective decision making include:

Sales forecasting

Traditionally considered a nightmare by management teams, AI algorithms can predict revenues for the upcoming quarter with higher accuracy. This helps the sales team and leadership to take a data-driven decision and achieve operational excellence.


Cross-selling and or up-selling is the easiest way to increase marketing ROI. To determine which customer segments will have a bigger value, use AI to identify the clients that are likely to upgrade or broaden their purchases across various products/services.

Price optimization

AI-enabled campaigns can help you identify what type of promotions incite buyers to make a purchase.

Up the Ante on Digital Marketing

2019 is the year to up the game in terms of digital marketing. Customers are no longer going to just click targeted ads based on their demographic information. As such, several organizations have started using AI to detect how consumers are engaging with content across different touchpoints. It also identifies marketing messages that may boost audience engagement. These insights are instrumental in refining marketing campaigns and boost overall ROI.

By mapping out the factors that affect customer lifetime value, both marketing and sales teams can create customer loyalty and advocacy programs targeting their most valued customers. AI is no longer being used to only improve the value, it is also forcing marketers to use it as a major KPI metric. Since AI is vital to understand the impact of several aspects of customer behavior, it also helps the team fine-tune their strategies and make metric-driven decisions for improved user experience.

How AI Increases Customer Lifetime Value

How AI Increases Customer Lifetime Value


Create Personalised Experiences

AI’s ability to analyze data makes it possible for marketers to deliver personalized experiences to customers and make them feel special. Armed with insights from AI algorithms, teams can deliver relevant content that can further strengthen the relationship and build customer loyalty. Not so long ago, Netflix and Spotify started using AI-driven insights to provide recommendations to its customers, and today, all other brands are trying to provide the same level of personalized recommendations to its customers.

More Sales

AI can transform the way organizations engage customers with their products. By taking advantage of data, AI can be used to create a holistic and hyper-targeted approach that compels customers to purchase more. E-commerce giant, Amazon does a great job by suggesting other products, based on the historical preferences of the customer. As teams gain a deeper understanding of personal preferences, they can deliver tailor-made offers for their customers. In other words, AI equips organizations with tools to create trust and change short-term sales pitches into long-term loyalty.

Renew Faster

When customers are made to feel more valued and understood, they tend to stick around and become advocates of the brand. And as an AI-empowered marketer, the insights will predict what your customers might need next. By incentivizing longer-term commitments, businesses can grow their customer lifetime value at a fraction of the cost when acquiring a new customer.

Visual Search

Customers are gradually moving away from text-based search to more visual searches thanks to advances in AI image recognition and analysis. Platforms like Pinterest and technology such as Google Lens are making it possible for brands to improve merchandising and provide a personalized shopping experience. US retail giant Target’s partnership with Pinterest in 2017 shows their determination to integrate visual search in their e-commerce experience. The partnership allows users to take a picture of an item and find similar products on Target’s website.

Evangelize Eagerly

Implementing AI demands marketers to focus more on lifetime value. When this shift happens, customers see brands as an indispensable entity and start loving it. And with AI’s help in calculating lifetime customer value, organizations can determine the reward for their best customers.


Traditional marketing channels have considered all customers to be equal. But today, things have changed. Customers demand personalized experiences to make them feel special and build better brand affinity. For this purpose, organizations are embracing AI to make full use of their data, collected at various touchpoints of the customer’s journey. Primarily because not all metric-driven decisions make it easy for everyone to collaborate and create a customer-centric business model.

AI-driven marketing empowers teams to deliver better ROI (Return on Investment) from their marketing investment. It also helps businesses and companies make data-driven decisions and see what works for their brand and what doesn’t by forecasting sales, up-selling/cross-selling, and renewing clients’ contracts. Thereby, accelerating customers ‘ purchasing decisions and help organizations better tailor their content strategies.

Srinidhi Rao Srinidhi has witnessed the evolution of the tech & mobile industry over the last decade and half. He has vast experience in project management and leads our operations in the US.

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