Since the debut of ChatGPT, artificial intelligence (AI) is taking the online business scene by storm, including small local businesses too.
And it's not just hype, either. According to a report by McKinsey, AI has the potential to create between $3.5 and $5.8 trillion in value annually across nine business functions and teams in 19 different industries.
We're already seeing this in action, as 47% of digitally mature organizations claim to have an AI or machine learning process in place.
It's clear that AI can have a significant impact on business growth and success, so why shouldn't local businesses get a piece of the AI pie?
Can you use AI for your local business?
A misconception among some smaller business owners is that only bigger companies can make the most of AI to help streamline business processes and make smarter business decisions—but this isn't necessarily true.
In this article, we'll take a look at some of the most practical, even surprising, ways that any small business owner can do to leverage AI-powered technology to get more productive and efficient.
Ready to find out? Keep reading to discover 5 different ways your small business might use AI to help with all your day-to-day tasks.
5 ways to use AI as a small local business
1. For Customer Service: Implement an AI Chatbot
Customer service is an essential part of any business, but any small business owner knows how time-consuming it can be. Enter: an AI-powered tool like a chatbot.
You might already be familiar with chatbots; you've probably even interacted with chatbots that other businesses might be using.
Digital technology like these are as popular as they are because they help entrepreneurs save time while still making sure customer experience is taken care of.
By answering common questions and handling basic tasks, a chatbot can free up your time to focus on more complex customer issues. This can go a long way to improving customer engagement, manage customer inquiries, and develop customer loyalty in the long run.
As an added plus: it lessens the response time that your customers need to wait before having their inquiries addressed. As you can see, a simple chatbot goes a long way for customer relationship management and eliminating repetitive tasks.
Wondering how you can implement a chatbot with AI for customer service? Keep reading below.
Steps for small businesses to use artificial intelligence for customer service
1. Choose an AI Chatbot Platform
The first step is to choose an AI chatbot platform that's right for your business. There are several chatbot platforms available, such as Chatfuel, ManyChat, and Tars, that allow you to create a chatbot without any coding knowledge.
Your chatbot can then be programmed to help answer questions from potential customers or help to solve issues and concerns that other customers have, making it one of the more powerful tool to help save time focusing on your business processes.
2. Define the Chatbot's Purpose
Next, you'll need to define the chatbot's purpose and the types of questions it will be able to answer.
Common questions could include product inquiries, order status updates, and return policy information.
Depending on the chatbot software you opt for, you might even find done-for-you templates for customer service and customer engagement.
3. Train the Chatbot
Once you've defined the chatbot's purpose, you'll need to train it using natural language processing (NLP).
This will allow the chatbot to understand customer queries and provide accurate responses. Many AI chatbot platforms have built-in NLP features that can be trained using example conversations.
4. Integrate the Chatbot into Your Website or Social Media Platforms
After training the chatbot, you'll need to integrate it into your website or social media platforms.
Most chatbot platforms offer integration options for popular platforms such as Facebook Messenger, WhatsApp, and Slack.
If you have a website, you can embed that to your site so it pops out from the page.
2. For Marketing: Use AI for Content, Personalization, and Data-Driven Campaigns
AI can also help you personalize your marketing efforts, which can improve the customer experience and increase conversions.
Here's an example of AI-powered marketing automation in action: imagine an email marketing platform integrates their processes with AI.
With the power of artificial intelligence, the platform can now analyze customer data to determine the best time to send emails, the best subject lines, and even come out with recommendations for the most effective content to repurpose for your marketing strategy, like blog posts and social media posts.
Things like this can help you tailor your marketing efforts to each customer's individual preferences and increase the chances of them making a purchase.
With even content marketing professionals claiming that they spend most of their work week on creating content, AI can certainly come in to help them work faster, smarter, and with better insights.
So how can you use AI to do better content marketing? We've got the steps below, based on how some of the best marketing teams use AI to put their content and marketing on steroids.
Steps a local business owner can take to use AI for personalization in marketing
1. Collect Data on Customer Behavior
The first step to better use AI for your marketing strategy is to make sure you're able to collect data on customer behavior, such as their purchase history, browsing habits, and demographics.
This data can be collected through website analytics, customer surveys, and social media insights.
2. Use AI to Analyze the Data
Once you've collected the data, you can then use some marketing AI tools to analyze them and identify patterns and market trends.
This can help you understand what products or services your customers are most interested in, what marketing channels are most effective, and what messaging resonates with them.
This data can then be turned into powerful marketing campaigns, where you can proceed to create funnels that include blog posts, social media posts, email campaigns, and more.
Of course, marketing isn't just about distribution channels. It can even help you from the day to day level of improving how your products and business are seen in the market—use AI to generate product descriptions, summarize customer reviews, and do routine tasks that a marketing team might do, like catching up on market trends.
3. Create Personalized Marketing Campaigns
Using the insights gained from data analysis, you can create personalized marketing campaigns that target specific customer segments.
For example, you could create personalized email campaigns that recommend products based on a customer's purchase history, or social media ads that target customers based on their demographic information.
4. Test and Refine Your Campaigns
Of course, the most important part is to refine your personalized marketing campaigns after you've launched them. Even with AI, you won't always know how your marketing strategies perform.
A/B test things like designs, copy, and targeting to determine which ones are most effective. Then double down on what works, and test again.
There are several AI tools available to help local business owners with personalization in their marketing campaigns.
You'll also find several AI-powered personalization tools specifically designed for e-commerce businesses like Nosto which can help you deliver personalized product recommendations to customers.
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3. For Inventory Management: Use AI to Optimize Stock Levels
Managing inventory can be challenging, especially with a large number of products. AI can come in by analyzing sales data and predicting which products are likely to sell out, allowing you to optimize your stock levels and prevent overstocking.
This way, you say goodbye to wasted time and money. With some AI assistance, you'll never be caught without the products you need to keep selling.
Steps to use artificial intelligence for inventory management
1. Choose an AI-powered Inventory Management System
The first step is to choose an AI-powered inventory management system that can analyze sales data and predict which products are likely to sell out.
There are a few AI-powered inventory management systems you can count as options, like QuickBooks Commerce and Zoho Inventory. These systems offer nifty key features, including predictive analytics, automatic restocking, down to real-time inventory tracking.
By choosing the right AI tool for your business, you can optimize your inventory management process and save a lot of time and money in the long run.
2. Integrate Your Sales Data
After selecting an inventory management system, the next step is to incorporate sales data. This then allows your chosen software to analyze your sales history and make predictions about future sales.
3. Set Your Optimal Stock Levels
Based on the sales data analysis, the inventory management system might recommend optimal stock levels for each product.
What this does is help you prevent overstocking—reducing waste in the process—and makes sure you always have the right products in stock.
4. Receive Alerts and Notifications When Stocks Run Low
The inventory management system software that you choose might also be able to send alerts and notifications when stock levels are running low, or when a product is likely to sell out.
This way, you can stay on top of your inventory and make sure
5. Monitor and Adjust
Finally, it's important to monitor your inventory levels and adjust as needed.
Sure, AI can provide valuable insights into sales trends and customer behavior, but ultimately, it needs some human assistance, so don't rely entirely on digital technology for this.
4. For Fraud Prevention: Use AI to Detect Suspicious Activity
Fraud can be a major issue for e-commerce businesses, but AI can help detect and prevent fraudulent activity.
A fraud detection system that uses AI can analyze customer data and recognize patterns of suspicious activity, such as repeated purchases from a single IP address or atypical payment methods.
By doing this, you can decrease the risk of fraudulent transactions, which can protect your business from financial damages.
Steps a local business owner can take to use AI for fraud prevention
1. Start Collecting Data and Get Insights into Customer Behavior
The first step is to collect data on customer behavior, whether that's purchase history, transaction volume, and geographic location.
This data can be collected through your e-commerce platform or payment processor.
If you're in a high-risk business that might be attacked by fraudsters, there are some heavy-weight fraud prevention tools like Kount and Sift Science that use AI and machine learning to detect and prevent fraud to protect your business.
2. Use AI to Analyze the Data
Artificial intelligence can analyze data to identify potential fraudulent behavior by detecting patterns or discrepancies.
For example, it might alert you if it detects unusual transactions from customers, such as those with bigger order amounts than usual customers, those from high fraud risk countries, and those occurring outside of regular business hours.
3. Set Up Rules and Alerts for Fraud
There are often repeatable criteria that lets AI detect fraud, but you might need to set these up in the beginning.
Based on the insights gained from data analysis, you can set up rules and alerts that trigger when suspicious activity is detected.
For example, you could set up a rule that automatically flags transactions above a certain dollar amount or that originate from certain countries. You can also set up alerts to notify you or your staff when suspicious activity is detected so that you can take action.
4. Keep Tweaking Your AI Model
To improve the accuracy of your fraud prevention system, it's important to continually train your AI model.
This might involve feeding it new data and refining the criteria and alerts based on new insights gained from data analysis.
5. For Menu Optimization: Use AI to Optimize Your Restaurant Menu
If you own a restaurant, AI can help you optimize your menu and improve the customer experience.
Take for example how an AI-powered system might help you collect and analyze sales data to determine which dishes are the most popular and which ones are underperforming.
This can help you make informed decisions about which dishes to keep on the menu and which ones to remove or modify.
Steps a local restaurant owner can take to use AI for menu optimization
1. Upload Data About Your Menu Items
The first step is to collect data on your current menu items, including sales data, customer feedback, and ratings.
You might find this data from your e-commerce store analytics, like this one you get on Cococart, your point of sale system, or through customer surveys.
2. Use AI to Analyze the Data
Once you've collected the data, you can use AI to analyze it and identify trends and patterns in customer preferences.
For example, AI can identify which menu items are most popular, which items are frequently ordered together, and which items have the highest profit margins.
There are several AI tools available to help local restaurant owners with menu optimization.
Do you need a huge budget to use AI in your small business?
The short answer to whether or not you need a big budget in order to use AI in your small business is? No, not really.
There are many tools out there you can start using for free, like the ever-popular ChatGPT.
The not-so short explanation is: if you look hard enough, you'll definitely practical and cost-effective AI options that'll fit your needs—and can be free to use.
In fact, we believe that as the market for artificial intelligence tech that use machine learning and natural language processing grows, it won't be surprising to see more accessible and affordable options down the road.
Who knows? We might just see more and more free AI tools to take your business operations to the next level.
How will you use the power of artificial intelligence in your small business?
As you've seen above, AI can be a valuable tool for local and independent businesses looking to save time and improve their operations.
From customer service to menu optimization, there are so many ways that AI can help you streamline your business processes and cut cost along the way.
By leveraging the power of AI, you can stay competitive in today's fast-paced business environment and continue to grow and succeed.
And why just look at AI? Get the tools that help you streamline your business from the core. Use Cococart to help you take your business online and start selling in minutes.