How does AI-Powered Pricing Help Reduce Customer Churn
Customer churn is one most excruciating crises faced by businesses. Globally, companies lose up to $1.6 trillion due to customer churn. Most companies spend a handsome amount of money acquiring customers but end up losing them due to a series of factors, one being poor pricing strategies. Often this value leak also occurs due to lack of AI-powered pricing techniques. Numerous other reasons, like lack of market insights, poor customer experience, dissatisfactory shopping journey and so on also determine whether the customers continue buying products or leave after just one purchase.
Apart from poor pricing strategies, there are a number of other factors that cause customer churn. Let’s dive deep into them and understand how it can be avoided.
1) Lack of Accurate Market Insights
When a company does not do a thorough research on the market, they end up hindering their business. A strong market study enables businesses to set the right prices for their products, showcase desired products on the digital shelves and conduct an in depth study on their competition. But performing an accurate in-depth study manually can be next to impossible, which is why it is vital for a company to use AI-powered algorithms that perform real-time data analysis.
2) Absence of Competitive Prices : In today’s time, customer loyalty is quite fickle. Shoppers will instantly move to the next brand if they offer better prices for the same products. But keeping track of all the products manually is next to impossible. That is why e-commerce giants like Amazon & Walmart use scientific methods to constantly keep a track of their competition. This enables them to always have the upper hand when it comes to competitive prices.
3) Increasing or decreasing the Prices at the Wrong Time: If a brand or a business increases the price of a product at a time when the competition is offering extremely low prices, then they are bound to lose out. Customers also feel cheated when the prices on their favored website are higher than the competition. This mishap occurs when prices are set manually. Artificial intelligence and machine learning provides the right prices at the right time with 99% accuracy.
4) Not Utilizing AI-Powered Pricing: With the growth of artificial intelligence, more and more companies are leaving pricing to the bots. AI-powered algorithms are programmed to study market data, understand the competition’s pricing strategies and predict accurate prices for the products. Not only does it provide accurate results but also allows business owners to focus on scaling their business. BRIO, is one such software solution, that enables retailers to price their products with a simple click of a button.
5) An Unresponsive Customer Support Team: Another very important factor that leads to customer churn is a lack of customer support. The response time of a customer support team plays a crucial role in determining the customer churn rate. Businesses today, should focus on using chatbots to respond to customer grievances. The sooner the company resolves the issue, the higher the chances of retaining the customer. Spending money to acquire customers is one aspect, the next important factor is making sure they keep coming back. Building customer loyalty is vital for every business. Especially, those who spend tons of monetary funds to acquire them.
In today’s blog we are going to understand how AI-Powered pricing can help reduce customer churn.
1) Understanding the Customer’s shopping habits: Retailers can develop individualized price plans that are suited to certain clients with the aid of AI-powered pricing. Based on their prior purchasing history or participation with the business, at-risk customers may be given discounts or other special offers. By providing personalized pricing options, retailers can increase customer loyalty and reduce churn.
2) Predictive Analysis: With the aid of artificial intelligence companies can now predict what their clients shopping needs. The bots study the customers’ previous shopping patterns and accordingly predict what they might need in the future. This helps reduce customer churn and makes the customer feels heard. Walmart, makes shopping for everyday items a no-brainer with the help of AI.
3) AI-Powered Pricing: AI-Powered pricing is an absolute must for any business. These algorithms are programmed to make sure that the prices of the products are just right. They are in synch with the market, the competition and so on. Artificial intelligence and machine learning, reduce the margin of error and speed of the pricing process. A number of companies lose money when their product prices do not change at the right time. AI-powered pricing provides, SPEED, SCALIBILITY & SCIENTIFIC RIGOR!
4) Customer Segmentation: Retailers can segment their customers based on their buying habits, preferences, and level of involvement with the brand with the aid of AI-powered pricing. Retailers can identify consumers who are at risk of leaving and develop tailored price plans to keep them by evaluating this data. Prices can be personalized for every customer according to their needs. Uber, uses AI to offer different prices to different customers all the time.
5) Dynamic Pricing: Retailers can alter prices in real-time based on customer and market behavior with the use of AI-powered pricing. This can aid retailers in improving consumer loyalty and pricing tactics. With ever-evolving, fast paced market, companies need to keep a constant check on the market prices. Big companies change the prices of the products up to 5 times a day. The dynamic pricing technique, keeps the customers hooked on and keeps them coming back for more.
Ultimately, AI-powered pricing can give retailers the resources and information they require to develop price plans that are competitive, tailored, and efficient in lowering customer turnover. Retailers can better understand their customers and provide them price alternatives that are catered to their requirements and preferences by utilizing the power of AI, which will ultimately enhance customer loyalty and retention.