AI’s Role in Loyalty and the Customer Experience

Artificial intelligence is a topic on the lips of loyalty marketers everywhere now and Maritz Motivation Solutions, a leading provider of loyalty programs to U.S. and global companies, recently announced the successful use of AI to predict the redemption of loyalty program rewards associated with HSBC’s new suite of credit cards.
Maritz’s AI algorithm, also known as machine learning, predicts the rewards a loyalty program member is likely to redeem over the next year. The AI then suggests a redemption category to promote to each member and calculates the percentage of clients likely to redeem in different categories.
The HSBC promotion involved 75,000 credit card rewards members. Cardholders were sent e-mails based on the AI recommendation in one of four categories: travel, merchandise, gift cards and cash. A control group received an email with a random category. 
What were the results?
Of those that received the targeted messages and redeemed, 70 percent redeemed in the AI recommended categories. The number of opened emails increased 40 percent among the AI group.
“AI is central to the future of every industry, frankly,” Jesse Wolfersberger, Senior Director, Decision Sciences, Maritz Motivation Solutions, explained to Loyalty360. “It’s important to loyalty, specifically, because of loyalty’s role in the customer experience. When a customer signs up for a loyalty program, they know that they are exchanging their data for a better experience. AI will allow us to better honor our end of the bargain—to provide better, more personalized experiences. We want loyalty to solve problems the customer doesn’t even know they have yet. In the HSBC example, the goal is to give them a way to spend their points that lines up exactly with their preferences. We’re doing some of the leg work for them. In my ideal world, the customer says, ‘This is exactly what I wanted right now, and I didn’t even have to ask.’’’
Wolfersberger said that Maritz Motivation Solutions is a long-time partner of HSBC.
“We have been experimenting with AI on our own and approached HSBC about doing a pilot,” he explained. “They were extremely willing and cooperative. Our goals were pretty modest, actually. We just wanted to see if we could use AI to predict reward preferences, then see how we could act on that knowledge to improve the user experience. For this test, we had extremely positive results, but it’s really just the first step of where we want to take this. For example, in this test, we just promoted a type of redemption to a customer—merchandise, for example. In future versions, we want to get more granular and promote a specific category within a redemption type—golf clubs, for example.”
Predicting preferences enables a brand to give customers relevant messaging, Wolfersberger noted.
“Gone are the days of everyone getting a blanket email that is the same for everyone,” he explained. “That’s spam. If the email is relevant, then it’s not spam to the consumer. I would love to get to a place where the brand’s messaging is seen as a benefit to the customer. They are excited to open it up and see what is inside, the same way I’m excited to open my Stitch Fix box every month. I’m excited about that because I know they have tailored the things in that box according to my preferences. Redemption is an extension of the consumer experience with the brand. Volatility isn’t necessarily a bad thing—it’s just the customers expressing their preferences. It’s our jobs to anticipate those preferences, which again is why AI is critical to the future of loyalty.”

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