Brave New World? On AI and the Management of Customer Relationships
Libai Barak , Yakov Bart, Gensler Sonja, Hofacker Charles F., Kaplan Andreas, Kötterheinrich Kim, Kroll Eike Benjamin
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; Customer relationships; Customer lifetime value; CRM; Regulation