AI Or The Human Touch? Striking A Balance In Customer Retention
AI is transforming customer retention strategies, but does it hold the key to true customer loyalty that is built on an emotional connection with the brand and those behind it?
Some argue that the further businesses go into AI and automation, the more their customers crave personal connection and authentic, trusted relationships. Yet, a recent study uncovered some unexpected findings: while consumers inherently trust AI agents less than humans, they actually share more personal information with them, a behavioral shift that has significant implications for companies implementing AI customer service and looking to achieve strong customer retention.
And while traditional methods like loyalty programs and customer service still hold value, AI does provide advanced capabilities for predicting customer behavior, personalizing interactions, and proactively addressing potential issues, leading to higher customer satisfaction and reduced churn.
Thoughtful integration
As founder of a niche e-commerce store, Garden Furniture, Andrew Griffith has found that customer retention in 2025 isn't just about flashy AI, but about the thoughtful integration of tech with old-school customer care.
He says: 'Smart segmenting with a light AI tool has allowed us to get those highly personalized emails without straining our team or budget. We follow customers' purchase cycles, for example, seasonal buying habits for outdoor furniture, and send personalized reminders or tips.
However, underpinning this strategy is a policy of local-first loyalty. Garden Furniture offers a referral bonus that can be claimed online or in-store, which keeps its North Yorkshire customers firmly engaged. Another key element is the use of UG content.
'We encourage customers to submit images of their garden spaces styled and will showcase that in our monthly newsletter,' says Griffith. 'It is community building, and it encourages return visits.'
Building trust
Rich Kingly, CEO and owner of New Jersey-based Driveway King, is another proponent of the fundamental principle that AI scales efficiency, while traditional personal touches build trust. He says: 'Take personalized follow-ups for example, I send handwritten thank-you notes post-project, making clients feel valued. This builds loyalty, with 60% of my clients returning for additional work.
Other traditional approaches include a focus on community, specifically hosting local workshops on outdoor design, which last year, led to 15 referrals from attendees. Meanwhile, loyalty rewards, offering discounts for repeat clients, has boosted retention by 20%.
But Kingly admits that they also rely on AI-driven insights. 'Using CRM tools like HubSpot, I analyze client preferences to offer tailored maintenance plans, reducing churn by 10%. AI predicts when clients need services, ensuring timely outreach.'
AI underpins customer retention
Some entrepreneurs, however, argue that far from just adding a layer to customer retention, AI is its very foundation. 'The way startups and entrepreneurs are keeping customers today is very different from five years ago,' says Berkay Kinaci, COO at Speaktor. 'The baseline expectation has shifted. AI allows for real-time, personal, and scalable interactions that traditional methods just cannot match anymore.'
Speaktor uses voice generation and transcription tools to automatically turn written content into spoken word has helped to build more inclusive, accessible communication. This has resulted in an increase in return visits and longer session times after implementing this. The user base became more diverse without needing to invest more in manual support.
No more guesswork
One effective approach is the use of predictive AI for engagement timing. Some platforms are using behavioral data to decide not just what message to send, but exactly when a user is most likely to respond. Another is in emotional sentiment modeling. A few of the newer platforms can track how customers feel during interactions, especially through text and audio inputs. The system adjusts tone, pace, and follow-up content based on emotional markers.
'The methods that work today are precise, context-aware, and powered entirely by AI,' says Kinaci. 'Traditional retention tricks now feel like guessing compared to what these systems can do.'
One AI-driven strategy gaining ground is predictive churn modelling, as Lindsay Marty, founder and CEO of Above the Bar Marketing, explains.
'Using customer behavior data, businesses can identify signals that someone might drop off before they do,' she says. 'Then, the company can reach out with targeted offers, reminders, or even just a well-timed check-in message. It sounds basic, but the key is the timing. You are catching people while they are still deciding and before they disappear for good.'
More meaningful customer retention
Nevertheless, Marty believes that traditional methods are still effective, and in some ways, more meaningful. One strategy she has seen work well is founder-driven updates. 'Startups that send short, personal messages from the founder every few months build trust and loyalty,' she says. 'The updates can be simple but honest, sharing wins, challenges, or behind-the-scenes context. Customers feel like they are part of something, not just buying from a faceless product.'
Finding the balance
Ultimately it is all about finding the right balance by strategically leveraging AI for efficiency while retaining the impact that a more empathetic service that human interaction delivers. While AI can streamline and speed up routine tasks and analyze data to identify potential issues, the human touch remains crucial for more complex situations requiring emotional intelligence and personalized solutions.
'Some folks go all-in on AI, while others still stick to the basics,' says Siyar Isik, founder and CEO of Delaware-based Transkriptor. 'The real winners do both. One thing that works across the board is smart nudges based on what a user's doing, not spammy popups. We worked on a meeting assistant that would gently remind people at just the right time, based on their habits. Sounds simple, but it cut churn way down.'
Data and empathy
He highlights the importance of creating small moments of delight. 'One product rolled out custom confetti when someone hit a milestone,' he says. 'Their name popped up, the screen lit up, and suddenly users were sharing screenshots. It's goofy, but it sticks.'
Allowing users to shape the roadmap is another winning strategy. 'People want to feel they're part of something, so, showing feature votes, collecting ideas, even just saying 'we heard you' makes a difference. When someone sees their idea become real, they stick around longer.'
Ultimately, when it comes to customer retention, the startups that will succeed are the ones who use data and empathy together. Marty adds: 'You can learn more about your customers with tech, but relationship is what keeps them coming back.'
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
25 minutes ago
- Yahoo
Nvidia Stock Is at a Peak - What's the Best Play Here for NVDA?
Three weeks ago, we recommended Nvidia Inc. (NVDA) stock in a June 22 Barchart article and shorting out-of-the-money puts. Now, NVDA is near its target prices, and the short play is successful. What is the best play here? NVDA is at $171.30, up over 4.5% today. Trump OK'd an export license to sell its powerful H20 AI chips to China after Nvidia's CEO, Jensen Huang, met with President Trump. The Wall Street Journal said this has been a top seller for Nvidia in China and was specially designed for the Chinese market. How to Buy Tesla for a 13% Discount, or Achieve a 26% Annual Return Alibaba Stock is Well Off Its Highs - What is the Best Way to Play BABA? Generate Income on MSTR Without Owning The Stock (Yet) Tired of missing midday reversals? The FREE Barchart Brief newsletter keeps you in the know. Sign up now! My prior price target was $178 per share using an estimated 55% forward free cash flow (FCF) margin (i.e., FCF/sales), as well as a 2.85% FCF yield valuation metric (i.e., 35x FCF multiple). Last quarter, Nvidia made a 59% FCF margin. So, if this continues over the coming year, NVDA stock could have further to go. Moreover, analysts have lifted their price targets. Let's look at this. In Q1 ending April 27, Nvidia generated $26.1 billion in FCF on $44.06 billion in sales. That represents a 59.2% FCF margin. Over the trailing months, according to Stock Analysis, it's generated $72.06 billion FCF on $148.5 billion in sales, or a 48.5% FCF margin. So, it seems reasonable to assume Nvidia could make at least a 57% FCF margin going forward. Here's how that would work out. Analysts expect sales to rise to a range between $199.89 billion this year ending Jan. 2026 and $251.2 billion next year. That puts it on a next 12 months (NTM) run rate of $225.5 billion. Moreover, now that it will be able to sell to China again, let's assume this pushes sales at least 5% higher to $236.8 billion: $236.8b NTM sales x 57% FCF margin = $135 billion FCF Just to be conservative, let's use a 55% margin on the lower NTM sales estimates: $225.5 billion x 55% margin = $124 billion FCF So, our estimate is that FCF over the next 12 months could range between $124 billion and $135 billion, or about $130 billion on average Therefore, using a 30x FCF multiple (i.e., the same as dividing by 3.33% FCF yield): $230b x 30 = $6,900 billion market cap (i.e., $6.9 trillion) That is 65% over today's market cap of $4.178 trillion, according to Yahoo! Finance (i.e., at $171.35 p/sh). In other words, NVDA stock could be worth 65% more, or $291.55 per share. $171.35 x 1.65 = $282.73 price target That is what might happen over the next 12 months (NTM) if analysts' revenue targets are hit and its FCF margin averages 56%. Analysts have closer price targets. The average of 66 analysts surveyed by Yahoo! Finance is $173.92. However, that is higher than three weeks ago, when I reported that the average was $172.60. Moreover, which tracks recent analyst recommendations, now reports that 39 analysts have a $200.71 price target, up from $179.87 three weeks ago. One way to play this is to sell short out-of-the-money puts. That way, an investor can set a lower buy-in price and still get paid extra income. In my last Barchart article on June 22 ("Make Over a 2.4% One-Month Yield Shorting Nvidia Out-of-the-Money Puts"), I suggested shorting the $137 strike price put option expiring July 25. The yield was 2.48% over the next 34 days (i.e., $3.40/$137.00). Today, that contract is almost worthless, as it's trading for just 8 cents. In other words, the short seller of these puts has made almost all the money (i.e., the stock has risen, making the short-put play successful). The investor's account has little chance of getting assigned to buy 100 shares per put contract at $137.00 on or before July 25. It makes sense to roll this over by doing a 'Buy to Close" and entering a new trade to 'Sell to Open' at a later expiry period and higher strike price. For example, the Aug. 29 expiry period, 45 days to expiry or DTE (which is after the expected Aug. 27 Q2 earnings release date), shows that $155.00 strike price put has a midpoint premium of $3.93. So, the short-put yield is: $393/$155.00 = 0.2535 = 2.535% over 45 days That works out to an annualized expected return (ER) of +20.28% (i.e., 2.535% x 8). So, even if NVDA stock stays flat, the investor stands to make good money here shorting these puts every 45 days (assuming the same yield occurs). There seems to be a low risk here, given that the delta ratio is just 23%. But, given how volatile NVDA has been, and that the stock is at a peak, it might make sense to use some of the income received to buy puts at lower strike prices. Keep in mind that the breakeven point, i.e., the price where an unrealized loss could occur, is $151.07: $155-$3.93 = $151.07 That is 11.8% below today's price. But it is not uncommon for a stock like NVDA to fall 20% from its peak. That would put it at $137.00. So, using some of the income to buy long puts at $140 or $145 is not unreasonable. That would cost between $144 and $204 ($174 on average) for the $15,500 investment (net of $393 already received): $393 income - $174 long hedge = $219, or $219 / $15,500 invested in short put play = 1.41% New Breakeven = $15,500 = $174 = $15,326 or $153.26 per put contract This means that the investor's potential (unrealized) loss is between $14,250 and $15,326, or -$1,076 net on the $15,326 net investment, or -7%. But keep in mind that this is only an unrealized loss. The investor would have protected himself from a much lower downside by buying long puts from the income received. And, after all, the price target is substantially higher, so the investor might be willing to hold on or even sell out-of-the-money call options to recoup some of the unrealized loss. The bottom line here is that NVDA has room to move higher. Shorting OTM puts with a lower strike price long put hedge is one good way to play this. On the date of publication, Mark R. Hake, CFA did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on Sign in to access your portfolio
Yahoo
28 minutes ago
- Yahoo
Top Stock Movers Now: Nvidia, AMD, Newmont, BlackRock, and More
Major U.S. equities indexes were mixed at midday Tuesday while China trade developments in the semiconductor sector boosted tech stocks. Shares of MP Materials soared after Apple said it would invest $500 million in the owner of America's only operational rare earths mine. Gold miner Newmont's CFO suddenly resigned, and shares U.S. equities indexes were mixed at midday Tuesday as tech stocks got a boost from semiconductor stocks. The tech-heavy Nasdaq climbed, while the S&P 500 and Dow dropped. Nvidia (NVDA) and Advanced Micro Devices (AMD) shares surged after the Trump administration reversed course and said it will allow the companies to sell key AI chips to China again. Shares of MP Materials (MP) soared after Apple (AAPL) said it would invest $500 million in the owner of America's only operational rare earths mine. Apple shares rose as well. Shares of medical equipment provider Steris (STE) gained on an upgrade from Morgan Stanley, which pointed to positive developments in its sterilization operations and market trends. Newmont (NEM) was the worst-performing stock in the S&P 500 as the gold miner's CFO, Karyn Ovelmen, suddenly resigned. Shares of BlackRock (BLK) dropped after the investment manager missed quarterly revenue estimates, even as it posted a record $12.5 trillion in assets under management. Wells Fargo (WFC) shares declined after the bank's net interest income came in below forecasts, and it lowered its guidance. Oil and gold futures declined. The yield on the 10-year Treasury note fell. The U.S. dollar was up on the euro, pound, and yen. The rally in cryptocurrencies stalled, with prices for most major digital coins lower. Read the original article on Investopedia Error while retrieving data Sign in to access your portfolio Error while retrieving data Error while retrieving data Error while retrieving data Error while retrieving data
Forbes
29 minutes ago
- Forbes
McDonald's AI Breach Reveals The Dark Side Of Automated Recruitment
Millions of McDonald's job applicants had their personal data exposed after basic security failures ... More left the company's AI hiring system wide open. If you've ever wondered what could go wrong with an AI-powered hiring system, McDonald's just served up a cautionary tale. This week, security researchers revealed that the company's McHire website—a recruitment platform used by over 90% of McDonald's franchisees—left the personal information of millions of job applicants exposed to anyone with a browser and a little curiosity. The culprit: Olivia, an AI chatbot from designed to handle job applications, collect personal information, and even conduct personality tests. On paper, it's a vision of modern efficiency. In reality, the system was wide open due to security flaws so basic they'd be comical if the consequences weren't so serious. What Went Wrong? It didn't take a sophisticated hacker to find the holes. Researchers Ian Carroll and Sam Curry started investigating after Reddit users complained that Olivia gave nonsensical responses during the application process. After failing to find more complex vulnerabilities, the pair simply tried logging into the site's backend using '123456' for both the username and password. In less than half an hour, they had access to nearly every applicant's personal data—names, email addresses, phone numbers, and complete chat histories—with no multifactor authentication required. Worse still, the researchers discovered that anyone could access records just by tweaking the ID numbers in the URL, exposing over 64 million unique applicant profiles. One compromised account had not even been used since 2019, yet remained active and linked to live data. As Carroll told Wired, 'I just thought it was pretty uniquely dystopian compared to a normal hiring process, right? And that's what made me want to look into it more.' Why Security Fundamentals Still Matter Experts agree that the real shock isn't the technology itself—it's the lack of security basics that made the breach possible. As Aditi Gupta of Black Duck noted, the McDonald's incident was less a case of advanced hacking and more a 'series of critical failures,' ranging from unchanged default credentials and inactive accounts left open for years, to missing access controls and weak monitoring. The result: an old admin account that hadn't been touched since 2019 was all it took to unlock a massive trove of personal data. For many in the industry, this raises bigger questions. Randolph Barr, CISO at Cequence Security, points out that the use of weak, guessable credentials like '123456' in a live production system is not just a technical slip—it signals deeper problems with security culture and governance. When basic measures like credential management, access controls, and even multi-factor authentication are missing, the entire security posture comes into question. If a security professional can spot these flaws in minutes, Barr says, 'bad actors absolutely will—and they'll be encouraged to dig deeper for other easy wins.' And this isn't just about AI or McDonald's. Security missteps of this kind tend to follow each new 'game-changing' technology. As PointGuard AI's William Leichter observes, organizations often rush to deploy the latest tools, driven by hype and immediate gains, while seasoned security professionals get sidelined. It happened with cloud, and now, he says, 'it's AI's turn: tools are being rolled out hastily, with immature controls and sloppy practices.' Automation and the Illusion of Security McDonald's isn't alone in betting big on AI to speed up hiring and make life easier for franchisees and HR teams. Automated chatbots like Olivia are supposed to streamline applications, assess candidates, and remove human bottlenecks. But as this incident shows, convenience can't come at the expense of basic digital hygiene. Simple safeguards—unique credentials, robust authentication, and proper access controls—were missing entirely. The rush to digitize and automate HR brings with it a false sense of security. When sensitive data is managed by machines, it's easy to assume the system is secure. But technology is only as strong as the practices behind it. Lessons for the Future If there's a lesson here, it's that technology should never substitute for common sense. Automated hiring systems, especially those powered by AI, are only as secure as the most basic controls. The ease with which researchers accessed the McHire backend shows that old problems—default passwords, missing MFA—are still some of the biggest threats, even in the age of chatbots. Companies embracing automation need to build security into the foundations, not as an afterthought. And applicants should remember that behind every 'friendly' AI bot is a company making choices about how to protect—or neglect—their privacy. The Price of Convenience The McDonald's McHire data leak is a warning to every company automating hiring, and to every job seeker trusting a bot with their future. Technology can streamline the process, but it should never circumvent or subvert security. The real world isn't as neat as a chatbot's conversation tree. If we aren't careful, the push for convenience will keep putting real people at risk.
