AI Or The Human Touch? Striking A Balance In Customer Retention

Forbes

4 days ago

AI and human contact: a winning combination
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.'