Brave New World? On AI and the Management of Customer Relationships

In light of the emerging discourse on AI systems' effect on society, whose perception swings widely between utopian and dystopian, we conduct herein a critical analysis of how artificial intelligence (AI) affects the essential nature of customer relationship management (CRM). To do so, we surve...

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Bibliographic Details
Published in:Journal of interactive marketing 2020-08, Vol.51 (1), p.44-56
Main Authors: Libai, Barak, Bart, Yakov, Gensler, Sonja, Hofacker, Charles F., Kaplan, Andreas, Kötterheinrich, Kim, Kroll, Eike Benjamin
Format: Article
Language:English
Subjects:
Artificial intelligence
CRM
Customer lifetime value
Customer Prioritization
Customer relationships
Regulation
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Summary:In light of the emerging discourse on AI systems' effect on society, whose perception swings widely between utopian and dystopian, we conduct herein a critical analysis of how artificial intelligence (AI) affects the essential nature of customer relationship management (CRM). To do so, we survey the AI capabilities that will transform CRM into AI-CRM and examine how the transformation will influence customer acquisition, development, and retention. We highlight in particular how AI-CRM's improving ability to predict customer lifetime value will generate an inexorable rise in implementing adapted treatment of customers, leading to greater customer prioritization and service discrimination in markets. We further consider the consequences for firms and the challenges to regulators. •Artificial Intelligence will have noticeable impact on how firms manage customer relationships.•We present a critical view of expected implications of AI-CRM emergence.•AI-CRM much improve the ability to predict customer lifetime value and to adapt treatment of customers.•This will lead to greater customer prioritization and increase in service discrimination.
ISSN:1094-9968
1520-6653
DOI:10.1016/j.intmar.2020.04.002