Taking personalized communication to the next level with AI

• AI
• Insights

15/04/2024 - Kris Vranken

Segmenting emails by customer purchase intent is the best way to ensure that the communication is relevant to the customer. This way, conversion rates can be increased and the customer will not relate negatively to your marketing communications.

Keep an eye on the basics

First, this is often done by product category. What has the customer bought in the past, and thus is the most likely thing the customer will buy again in the future. Especially by product category, this is a strategy often implemented and working. 

In addition, customer quality can then be considered based on traditional RFM segmentation or other customer quality indicators.

This method of personalization is a strategy that works and is easy to implement. Advantage for the customer is that it gets to see only what it is interested in, advantage for you as a company is that the necessary conversion can be achieved by focusing on top customers.

More sales, more relevance, more conversion with AI

The communication method described earlier certainly has its advantages, but it also has a major disadvantage. Classical communication segmentation focuses heavily on upselling, but the greatest increases in value are realized with cross-selling. In addition, customer quality is a good indicator, but it is primarily a historical indicator rather than a predictive indicator.

Discover cross-sell opportunities

To move from explicit aspiration to implicit aspiration, one can work with identifying "close neighbors. This involves clustering models that calculate the extent to which the purchase of one product can lead to the purchase of another. If we start applying this to book genres, we see the following

In the above example, we see that the probability that a customer is also interested in science is 2.5 times higher if they have bought history books in the past, but that children's books do not affect this probability.

This implicit aspiration is the basis for cross-selling communication opportunities.

Look ahead with predictive modeling

An additional layer to the communication strategy can be added with predictive analytics. Based on historical characteristics, customer behavior can be predicted with reasonable accuracy. Our latest models can predict the probability of short-term purchase with 90% accuracy based on historical purchase data and current interest in your brand. 

Based on these predictive models, you can tailor communications to these customers who effectively have purchase intent.

The synergy between relevance on content and on timing makes marketing communications considered minimally disruptive.

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