Resistance Is Futile
AI love potions to Keep Your Customers Obsessed
Locked In
My favorite coffee shop in Valencia is Cult, a relatively small shop that, in my opinion, serves the best dirty chai latte around. However, that’s not the reason I keep going back. In fact, their coffee might seem overpriced to most. What keeps me coming back are the magnetic smiles and warm greetings you receive the moment you walk in. Then there’s the artistic aura that fills the space. It’s the overall experience, the curated vibe that draws me in every time.
On the other side of the world, my favorite clothing store is Papa’s Handmade It in Yaba, Lagos, Nigeria. While I could easily order their exquisite Afro-urban pieces online, I always choose to visit in person. "Papa” as he’s called, has a story behind every design he creates. His sales team isn’t just interested in selling to you; they’re genuinely invested in finding the perfect piece for you. Again, it’s the experience that keeps me coming back.
Both of these places have "locked me in" because they’ve been able to curate experiences that resonate with me. There are no gimmicks, no marketing tricks, just word-of-mouth and authentic experiences that speak for themselves. they have been able to relatively create a persona and each of their clients has been able to relate to this personality. How do others achieve this?
Setting The Stage
Given that it is more costly to acquire new customers than to retain existing ones, it is puzzling that businesses often do a great job of losing the ones they already have. This is especially surprising considering that increasing customer retention rates by just 5% can boost profits by 25%1. With this struggle in mind, enter Artificial Intelligence (AI): a tool that, if harnessed the right way, can enable businesses to offer personalized experiences to clients like me by predicting my behavior and streamlining support through advanced analytics and automation.
Customer lock-in refers to strategies designed to make it difficult for customers to switch competitors. Unlike traditional loyalty programs that rely on a reward-based system, AI-driven lock-in strategies focus on creating barriers to switching competitors through personalization, seamless integration, and predictive insights. In 2022, Gartner reported that AI would influence over 75% of customer interactions, making it a critical tool for retention2. My goal is to explain how AI can help businesses understand the individual needs of customers and deliver hyper-personalized experiences, thereby bringing Gartner’s report to life.
Digital Love Potion
By leveraging data-driven insights, AI has enabled companies to create seamless and engaging experiences that are hard to leave behind or forget. Imagine walking into the Louis Vuitton store on Av. des Champs-Élysées in France and being assigned a personal attendant; that’s the kind of experience we’re aiming to achieve, but even better. By automating support and anticipating needs that customers might not even be aware of, we’re about to take a deep dive into AI strategies to accomplish something similar;
The first strategy is hyper-personalization. We now know that AI tools can analyze vast amounts of data, and if you skipped, this is probably a good time to pause and read Issue One, titled Decisions on Steroids. By analyzing this data, machine learning and natural language processing are leveraged to deliver tailored experiences to clients like me. This personalization involves addressing customers by name, recommending products based on behavioral data, and even considering contextual information, such as the time of day, to curate experiences. How is this accomplished? Through data collection from multiple sources tied to each client, machine learning to uncover patterns, real-time insights to deliver context, and dynamic content to match preferences. A simple example of this is how Netflix uses AI to recommend content based on viewing history, which accounts for 80% of its watch hours3.
Another key strategy is predictive analysis, which uses AI and machine learning algorithms to forecast customer behavior based on previous data. This enables businesses to take a proactive approach to customer interactions rather than a reactive one. How is this achieved? By analyzing patterns in user behavior, such as past purchases, browsing habits, and interactions. This helps identify what customers are likely to respond to, anticipate products they might want next, and determine the best times to reach out. Over time, these systems can learn and refine their predictions. A key example is Sephora, which uses predictive analytics to send personalized product recommendations, not only enhancing customer experiences but also boosting retention.
The final strategy, though not my favorite, is the use of automated customer support with chatbots. AI chatbots are essentially customer support systems that provide instant and personalized responses to inquiries 24/7. By leveraging natural language processing, these bots can handle routine questions and seamlessly pass complex issues to human agents when needed. Personally, I’d suggest using chatbots more as a buffer to cut down wait times, thereby boosting the customer experience. For instance, Bank of America's chatbot, Erica, has assisted over 7 million users with more than 50 million requests, significantly reducing support costs4. Gartner even predicts that AI chatbots will handle over 85% of customer interactions without human intervention by 2029 and honestly, I’m keeping my eyes wide open.5
Between Code and Conscience
While I am championing AI’s potential regarding customer retention, there are some challenges that businesses must address to ensure the fair and responsible use of this charm.
If there’s anything that isn’t obvious yet, it’s the heavy reliance on data collection that AI depends on, which naturally raises privacy concerns, especially when dealing with customer information. It is crucial for businesses to comply with regulations such as the General Data Protection Regulation (GDPR) in the European Union and the Data Protection Act 2023 in my home country, Nigeria. These regulations emphasize consumer rights, including the right to modify and delete personal data. I strongly advocate for businesses to establish clear and transparent data practices to ensure the security of customer information. If you’re a stakeholder reading this and unsure about transparent data practices, now might be a good time to consult a data controller.
AI systems can sometimes produce false information, hallucinate, or mirror biases present in the data they are trained on. This happens when biased data is used to make predictions or decisions about customers. This highlights the need for regular audits of algorithms and the use of diverse and representative datasets to train AI models, helping to prevent discriminatory outcomes. Promoting fairness and equity is essential for the ethical use of AI.
I mentioned earlier that automated customer support is my least favorite strategy. This is because AI systems tend to “over-automate” when dealing with customers, which can diminish the human element in interactions. There’s something uniquely important about customer care and human interactions; customers, especially when upset, want to be addressed with empathy, which is something AI still struggles with today. Therefore, it is crucial to have safeguards in place to ensure that the human element remains part of the experience.
The Promised Land
The future of AI in customer retention is all about keeping things personal, like my favorite barista in “Cult” who remembers my complicated coffee order with a smile, or Papa, who knows my style and just how pan-African I am, predicting what I’d like even before I do. With AI models learning and getting smarter every day, don’t be surprised when you walk into a store and, without even realizing what you need, get hit with eerily accurate personalized offers.
As long as companies don’t misuse data and keep things ethical, AI’s mix of hyper-personalization, predictive insights, and seamless support might just make leaving a brand feel like breaking up with your barber or hairstylist; painfully awkward and highly unlikely.
As I take the last sip of my now-cold dirty chai latte, I can’t help but think it’s better to push the narrative of a customer service glow-up rather than a robot apocalypse. Don’t worry, humans aren’t getting replaced; we’ll handle the juicy stuff while AIs deal with the boring FAQs.
Reichheld, F. F., & Schefter, P. (2000). E-loyalty: Your secret weapon on the web. Harvard Business Review, 78(4), 105–113.
Gartner. (2022). Predicts 2025: AI and the Future of Work. Gartner Research. Retrieved from Gartner
Gomez-Uribe, C. A., & Hunt, N. (2016). The Netflix Recommender System: Algorithms, Business Value, and Innovation. ACM Transactions on Management Information Systems (TMIS), 6(4), 13.
Bank of America. (2019). Erica Usage Report. Retrieved from Bank of America
Gartner. (2025, March 6). Gartner predicts agentic AI will autonomously resolve 80% of common customer service issues without human intervention by 2029. Directors Club. Retrieved from Directors Club