The Possibilities of Artificial Intelligence Usage in Loyalty Programs

Abstract

From the year 2022, when the GPT 3 model became publicly available, Artificial intelligence (AI) has been a buzzword in marketing. To say it still is influencing the field would be an understatement with new models and technologies continuously emerging and existing ones getting better and better. Loyalty programs as a sales promotion tool have also undergone big changes in recent years and AI is bringing new opportunities and challenges to the field. In this paper, we investigate the possibilities of artificial intelligence usage in loyalty programs. We aim to showcase the diverse opportunities through which AI can enhance loyalty program experiences. Among those usage opportunities we put specific attention on AI personalization and predictive modelling. By harnessing AI capabilities, organizations can possibly find new ways to enhance customer engagement, satisfaction, and build stronger loyalty. In this paper we are also looking at the current state of loyalty programs in the selected market and the way AI is being used in them. It is important to note that we approach the topic from two points of view – customers` and brands`. That means that we are trying to highlight how certain AI technologies can possibly improve customers` experience as well as how AI may be a helpful tool for businesses who want to manage loyalty programs. The final part of our article includes information on the suggested ways AI technologies may be implemented into loyalty programs based on the information provided in previous parts of the paper. Suggested implementation strategies are also appropriate as a starting point for further research, where every single technology would be researched more in detail. The main goal of this article is to provide readers with a comprehensive overview of the possibilities of how Artificial Intelligence can be used in the context of loyalty programs today. The article is theoretical-empirical and is based on external information from trustworthy sources as well as our own research of certain AI technologies in the context of loyalty programs.