CHICAGO — Artificial intelligence (AI) is another important component of modern loyalty, says Sastry Penumarthy, co-founder and vice president of strategy for Punchh, a loyalty firm based in San Mateo, Calif. Humans do not have the time or ability to sift through waves of data to know when and how to communicate and incentivize specific customers, and AI can make that process more seamless, and more personalized.
“AI will basically let me predict the customers that will be of the highest value to me over the next three months, let me look at all the offers and let me find the right offer for each of these customers,” says Penumarthy. He says Punchh is launching an AI-driven program like that with select customers over the next few months.
AI also helps companies identify and craft offers for customers who are visiting or purchasing less vs. the highest-value customers. It can identify the best time of day or day of the week to send an offer or a message to a loyalty member. “So, for example, if you are in the habit of checking email at lunchtime, it’s useful to know that information, But I shouldn’t ask you what you prefer; I learn from your behavior,” he says.
Related: Loyalty, This Time It’s Personal
But the most important reason to lean on AI, says Penumarthy, is its ability to connect consumer data collected through the loyalty program to other systems, such as marketing.
Penumarthy says Punchh is working on a way to extend and automate relationships between retailers, consumers and consumer packaged goods (CPG) brands.
Today, when retailers partner with CPG brands for loyalty promotions, it can take two to three months for the retailer to understand the effectiveness of the program and report back to the CPG company. With AI, both the CPG company and the retailer have a better idea of how much money and time to invest into the program.
Penumarthy says loyalty used to be much more conventional, but times have changed. People no longer use the same land line phone numbers they used to sign onto these programs years ago. Many customers no longer carry newspaper coupon clippings when shopping at the grocery store. “I want the offers to be right there on the phone when I’m placing the order. And they can’t do that unless it’s personalized,” says Penumarthy.
Jones of Casey’s, which has partnered with Punchh, says understanding customer shopping patterns using data mining and AI is important, and that such tools will be a part of Casey’s offer creation and targeting capabilities in the future.
More: 3 Loyalty Developments Driven by the Pandemic
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