Marketing Byte: The Role of AI in Enhancing Customer Experience

The 2024 Annual Franchise Marketing Report (AFMR) provides data-driven insights that marketing professionals and other leaders can use to measure and elevate their efforts. The franchise space is constantly faced with opportunities and challenges as marketers adapt to industry shifts, including the need to accelerate the digital transformation of their brands.

Franchise CMOs, CEOs, VPs, directors of marketing, and other senior-level marketing leaders completed detailed questionnaires for the sixth annual AFMR. The data and statistical findings were aggregated and analyzed to comprehensively examine the marketing practices, budgets, and strategies across a broad spectrum of franchise brands and sectors.

How to leverage AI to enhance customer experience

One of the major topics of discussion at this week’s Franchise Customer Experience Conference (FCXC) is how franchises are increasingly using AI to enhance the experience for their customers. Many franchises are currently in the early stages of experimenting with AI, understanding its capabilities, and how they can leverage it to improve their overall operations.

Franchise Update asked franchise marketing and operations executives how they have implemented AI, the challenges they have faced, and the advantages and opportunities they see in the future through the use of technology. It yielded an interesting set of responses that highlighted how they view both the intriguing benefits of AI along with the challenge of understanding and maximizing its capabilities.

When we asked franchisors how the integration of AI has been in the overall customer experience for their system, we received a balanced set of responses. Forty-three percent said AI helped with greater efficiency in resolving customer inquiries or problems. That was followed by improved customer satisfaction (33 percent), enhanced personalization of products or services (23 percent), and streamlined customer service processes (20 percent).

The survey also received varied responses to the question of the challenges and limitations franchisors have faced in implementing AI for customer experience. Half of the respondents (50 percent) said they lacked skilled personnel for AI management, which reflects the overall sentiment many have in grasping the power of the new technology. Other top responses cited were concerns about data privacy and security (47 percent) and issues related to AI technology maturity or reliability (35 percent).

As franchises started using AI, it is important for them to track the impact and effectiveness of this new technology. When asked about this, the highest percentage of responses (56 percent) said it was used to monitor customer feedback and reviews. Other responses included tracking key performance indicators (48 percent), customer satisfaction surveys, and analyzing customer engagement metrics (26 percent each). Most franchisors (79 percent) said they have not collected feedback from customers about their experience with AI platforms.

Looking ahead, we asked franchise executives what future trends they anticipate with the integration of AI and its impact on the customer experience. Here are some of their responses:

It should be noted that three-quarters of the respondents to the survey (75 percent) said they planned on further investing in AI technologies to enhance the customer experience in the future. The age of AI, at least in how it impacts franchise customer experience, has just begun.