The Role of Artificial Intelligence in Personalized Marketing: Enhancing Customer Experience & Retention

Jatin Singh Bankawat () and Preeti Sharma
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Jatin Singh Bankawat: University of Engineering & Management, Research Scholar, School of Management
Preeti Sharma: University of Engineering & Management, Professor and Head, School of Management

A chapter in Proceedings of the International Conference on Artificial Intelligence in Management for Business and Industrial Growth (AIMBIG 2025), 2025, pp 480-494 from Springer

Abstract: Abstract Artificial intelligence (AI) is revolutionising modern marketing, especially personalised marketing. This study investigates how AI can improve customer experience & retention by using customised marketing tactics. Insights from a primary survey of marketing managers representing different companies in Rajasthan’s fast-moving consumer goods (FMCG) sector are analysed via structural equation modelling (SEM) analysis. The effectiveness of AI driven personalised marketing tactics is closely examined to see how they affect consumer engagement, satisfaction, & development of enduring relationships. The strong association revealed between AI implementation and customer experience, customer retention, and personalised marketing is significant and emphasises AI’s significant role as a driver of personalised marketing initiatives. The effects of using AI on customer experience & retention are clarified by path coefficients, both directly and indirectly. Relationship between AI adoption & improved consumer engagement is strengthened by AI-driven personalised marketing, that appears as a critical mediator. Additionally, the analysis highlights the significant path coefficients and total effects that highlight the substantial influence of personalised marketing on customer experience & retention. Important findings show that AI-powered personalised marketing has a significant impact on customer experience (CE), consequently improve customer retention (CR). Instead, effects of AI adoption on the customer experience & customer retention through personalized marketing is also investigated. These findings advocate in support of using AI to undertake personalized marketing and encourage brand loyalty. Companies could continue to develop sustainably by using AI technologies in an appropriate manner, so they cultivate deep relationships and continuous engagement with their clients.

Keywords: Artificial Intelligence; Structural Equation Modelling; Personalised Marketing; Customer Experience; Customer Retention (search for similar items in EconPapers)
Date: 2025
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DOI: 10.2991/978-94-6463-898-1_33

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