Small business owners know that sales are the lifeblood of their businesses. They bring in the cash that allows companies to survive and thrive, if they’re lucky—and smart.

However, attracting and retaining customers remains one of the biggest challenges small business owners face today. That’s why small businesses need every edge they can get in today’s uber-competitive environment. Luckily, you now have one: artificial intelligence. AI has emerged as a powerful tool, offering many compelling advantages that can significantly boost sales for small businesses.

Don’t worry that you or your employees don’t have the knowledge or skill set to implement AI solutions. If you go to Upwork and search for AI solutions, you can find skilled people ranging from consultants to app developers to specific service providers you need at the budget you can afford.

How AI can boost your sales

Here are just a few ways AI can help you increase sales at your small business:

Enhanced customer targeting and personalization

According to global consultancy giant McKinsey, 76% of consumers say receiving personalized communications is a “key factor” when considering doing business with a company, and 78% say personalized content made them more likely to repurchase.

McKinsey also reports that personalization typically lifts revenue by 10% to 15% “and that the more skillful a company becomes in applying data to grow customer knowledge and intimacy, the greater the returns.”

So, how can AI help you better target your customers?

• AI analyzes vast amounts of customer data, including purchase history, demographics, and online behavior. This allows for highly targeted marketing campaigns, personalized recommendations, and tailored experiences, increasing the relevance and effectiveness of your outreach. By understanding individual preferences and purchase history, businesses can increase customer engagement and drive sales.

• Customers appreciate receiving personalized product recommendations because they’re shown relevant items they are more likely to purchase, saving them time and money.

• Use AI algorithms to segment customers into distinct groups based on demographic, behavioral, and transactional data. Small businesses can improve engagement, relevance, and conversion rates by targeting specific customer segments with personalized marketing messages and offers, ultimately driving sales and revenue growth.

Improved lead generation and conversion

AI analysis can go beyond customer transactions.

• AI can also analyze online conversations and social media interactions to identify potential leads who are actively interested in your products or services.

• Employ AI algorithms to automate lead scoring and prioritization processes based on criteria such as lead engagement, demographics, and behavior. By identifying high-quality leads more efficiently, sales teams can focus their efforts on prospects with the highest likelihood of conversion, resulting in increased sales productivity and higher conversion rates.

Optimized pricing and promotions

Do you know what your competitors are charging for similar merchandise? Tracking your competition’s prices is critical to staying competitive in the marketplace. In addition to analyzing customer behavior and market trends, AI can analyze your competitors’ prices and recommend optimal pricing strategies for your products or services.

This also allows you to implement dynamic pricing. Using AI-powered algorithms, you can adjust product prices in real-time based on factors such as demand, competitor pricing, and inventory levels. By optimizing prices to reflect market conditions and customer behavior, businesses can improve profitability and drive sales while remaining competitive.

Streamlined sales operations and automation

AI can also streamline your back-office operations.

• AI can automate repetitive tasks such as data entry, scheduling appointments, and sending follow-up emails, freeing up your sales team’s time to focus on building relationships and closing deals.

• Using AI-powered automation tools to tackle these jobs also streamlines your sales processes and reduces manual tasks, errors, and inefficiencies. Businesses, especially smaller ones, can increase productivity and focus on more strategic activities by automating these tasks.

Sales forecasting

Accurate sales forecasts help small businesses predict future revenue, plan expenses, and make informed decisions for growth.

• AI-powered sales forecasting can accurately predict future sales performance and set achievable revenue targets. By analyzing historical sales data, market trends, and other relevant factors, businesses can make informed decisions regarding inventory management, resource allocation, and sales strategies to optimize revenue generation.

Marketing

Your business cannot survive if consumers don’t know you exist. That’s the purpose of marketing—to let consumers know about your business. Marketing connects you with potential customers, builds brand awareness, and drives sales.

• AI can take a lot of the guesswork out of marketing. AI algorithms can analyze vast amounts of data to identify trends, predict customer behavior, and optimize your marketing campaigns. By enabling you to reach the right audience with the right message at the right time, AI can increase conversion rates and maximize your return on investment (ROI).

• Email is still the most efficient marketing method with the highest ROI. Use AI-powered email marketing tools to automate the creation, personalization, and delivery of targeted email campaigns. By leveraging AI for content optimization, send-time optimization, and predictive analytics, your business can increase email engagement, drive traffic to your website, and ultimately boost sales conversions.

Enhanced customer service and support

Customer service has been on a severe decline. The Economist reports, “After rising steadily for two decades, the American Customer Satisfaction Index (ACSI), a barometer of contentment, began declining in 2018. Although it has edged up from its pandemic nadir, it has shed all its gains since 2006.”

Unhappy customers can be a big problem for small businesses, but AI can help companies provide better customer experiences.

• Integrate AI-powered chatbots into your website or messaging platforms to provide immediate assistance to customers. The chatbots and virtual assistants can provide instant customer support, answer inquiries, resolve issues, and guide customers through the purchasing process 24/7. They can even offer product recommendations.

• Businesses can lessen customer frustration by offering timely assistance, though you likely won’t totally eliminate it. Use AI-powered sentiment analysis tools to monitor real-time customer feedback, reviews, and social media conversations. This helps you proactively address customer concerns, improve brand reputation, and drive sales by creating happy and more loyal customers.

Visual search and image recognition

If you operate an e-commerce business, integrating AI-driven visual search and image recognition technologies into your e-commerce platform enables your customers to search for products using images instead of text. By simplifying the search process and providing more accurate results, businesses can enhance the shopping experience and increase sales conversion rates.

AI is not a magic bullet

Of course, there are some factors to consider when adopting AI solutions. Cost is a primary consideration. Implementing AI solutions costs money, of course, so it’s crucial to carefully evaluate the potential ROI before adopting any new technology. The expenses can vary significantly depending on several factors, including:

The complexity of the AI solution: Simple chatbots or basic marketing automation tools can cost a few hundred dollars per month, while custom-built AI solutions for specific tasks can cost tens of thousands or even more.

Deployment method: Cloud-based AI solutions are typically more affordable, with subscription fees ranging from $10 to $100 or more monthly per user. On-premises solutions, which come with upfront hardware and software costs, can be significantly more expensive.

Data storage and processing: AI solutions often require storing and processing large amounts of data, which can incur additional costs depending on the volume processed and the platform used.

Data dependence: The effectiveness of AI relies heavily on the quality and quantity of data available. Small businesses might need to invest in data collection and management strategies to fully leverage AI’s capabilities.

According to industry reports, rough estimates can vary widely:

• Simple AI tools: $100 -$500 per month
• Marketing automation with basic AI features: $500-$2,000 per month
• Custom AI development: $10,000+ per project

These are just estimates, and your actual costs may be higher or lower depending on the specific solution and factors mentioned above. It’s also important to consider indirect costs like employee training. You must carefully research and compare different options before making any decisions.

Outsourcing talent

One smart way to save money is to outsource many required tasks. Depending on what you need, instead of hiring a pricey company or worrying about finding employees you can afford, you can, as I noted above, go to Upwork, search for AI solutions, and find the talent you need and can afford. Another advantage of using a service like Upwork is that you can look for the providers you need; see various options in one place; check out their costs, ratings, and reviews; and make more informed choices.

Using Upwork enables small businesses that cannot afford expensive AI solutions to implement AI. The average base salary of a software developer is nearly $120,000. Compare that to Upwork app developers, with prices starting at $300 to $500.

As your business grows, your AI needs will likely change. Using Upwork allows you to find the skilled talent to fill those needs versus hiring an employee whose skills were good for what you required then but aren’t as advanced as you need now.

AI solutions offer businesses a competitive advantage

Don’t forget that while AI can automate tasks and provide valuable insights, it cannot replace the human touch in sales. Building genuine customer relationships and understanding their needs remain essential for a successful business. Ideally, blending your team with smart AI solutions will lead to more satisfied customers, spending more money, and increased sales.

Embracing AI technology and implementing its solutions enables businesses to better understand their customers, optimize their operations, deliver exceptional customer experiences, increase sales, drive long-term growth and success, and stay competitive in today’s rapidly evolving marketplace.

About the Author

Rieva Lesonsky is CEO of GrowBiz Media and SmallBusinessCurrents.com and has been covering small businesses and entrepreneurship for over 30 years. Get more insights about business trends by signing up for her free Currents newsletter.