AI In Loyalty Series: Supercharging Chatbots, Integration, and Customization with AI

AI is transforming loyalty programs by enhancing the loyalty customer experience (CX), making interactions faster, smarter, and more rewarding by providing seamless, efficient, and personalized interactions. One of the most significant advancements comes through AI-powered chatbots and virtual assistants. While we are not quite at the HAL (2001: A Space Odessey), or even the Star Trek “computer” level, they are redefining how businesses engage with their customers. These smart assistants can handle customer inquiries, process reward redemptions, rebates, and provide detailed information about loyalty programs around the clock. With their ability to resolve issues quickly and accurately, chatbots not only save time but also ensure customers feel supported and valued, leading to a more positive and engaging loyalty experience.

What sets AI assistants apart is their ability to leverage large language models (LLMs) combined with proprietary company data. AI assistants customized with company-specific data deliver highly tailored answers that customers can’t find elsewhere. For example, an AI assistant can explain unique loyalty program benefits, suggest rewards personalized to a customer’s preferences, or even guide them through special promotions exclusive to the brand. This unique blend of public LLM technology and proprietary information creates a distinct and valuable customer experience, positioning businesses as leaders in personalization and customer care.

AI chatbots are also easily able to connect you with customer care when they no longer can help assist. If you have ever been caught in a frustrating interactive voice response loop (press 7 if you feel like screaming out loud!), and who hasn’t, you know how much better a real conversation-like experience can be. With AI, chatbots are now able to know when they can no longer help the customer and transfer you to a live agent, who can then quickly resolve the issue. This has made the CX for customers much easier and helpful with no frustrations.

The rise of AI chatbots in loyalty programs coincides with an existing trend — increased reliance on mobile devices. Of the 81% of Americans who use smartphones daily, more than half prefer retrieving their loyalty account information through a mobile app.¹

Example of AI Chatbots within Loyalty Programs:²

Sephora’s AI Chatbot for Beauty Insider Members: Sephora’s chatbot assists customers in finding beauty products, scheduling in-store makeovers, and redeeming loyalty rewards. By offering personalized recommendations and real-time support, the chatbot enhances customer engagement and retention.
Domino’s Pizza AI Chatbot (Dom): Domino’s loyalty program is enhanced by its chatbot, which allows customers to place orders, track delivery status, and check loyalty points via voice or text commands. The chatbot provides a smooth and efficient experience, increasing customer satisfaction and repeat orders.

AI-powered chatbots not only streamline customer support but also make loyalty programs more interactive and engaging. As AI continues to evolve, chatbots will become even more sophisticated, further improving customer retention

Another game-changer is the seamless integration that AI enables across multiple channels. By connecting loyalty programs to online platforms, in-store systems, and mobile apps, AI ensures customers enjoy a consistent experience regardless of where or how they interact with a brand. For example, a customer might start earning points through an online purchase, redeem them in-store, and track their progress via a mobile app—all without any friction. This interconnected approach not only enhances convenience but also strengthens brand loyalty by meeting customers wherever they are. This level of consistency builds trust and enhances brand love.

AI is not just enhancing loyalty programs—it’s redefining them. By leveraging chatbots, seamless integration, and proprietary data-driven personalization, brands can deliver a loyalty CX that is intuitive, engaging, and designed to meet the unique needs of every customer. In doing so, they build stronger relationships and foster long-term loyalty in an increasingly competitive landscape. Just don’t expect the chatbot to laugh at your jokes… unless they’re funny.

To learn more about AI and its practical application to recognition and reward programs, reach out to us at Ascendant Loyalty Marketing. We are a leading loyalty strategy consulting firm dedicated to building customer lifetime value and greater retention for your clients.

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