7 Ways How AI Tools Are Helping Startups Make Money

In today’s fast-paced online world, Artificial Intelligence (AI) has entirely transformed how startups make money. AI adoption is increasing over the years and the greatest part is that they are helping startups reduce long-term costs. 

From streamlined operations to a better customer experience, it is completely revolutionizing how startups operate and compete with the market. 

In this article, we’ll dive deeper and learn more about the 7 ways AI tools are helping startups make more money and reduce costs. 

1. 24/7 support with AI chatbots 

While customer support agents can’t be online at all times, AI chatbots are online 24/7 and make the lives of business owners much easier. Statistics show that 88% of users engaged in at least one conversation with a chatbot throughout their lifetime. 

AI-powered chatbots offer cost-effective solutions by automating responses based on customer inquiries, handling frequently asked questions (FAQs), and guiding users through any current issues they are undergoing. There are three massive advantages AI chatbots have that help startups make money: 

1. Being available 24/7: Chatbots provide instant responses and make sure customer queries are addressed on time. 
2. Cost savings: Automating customer support reduces the need for larger support teams. This helps you save money in the long term. 
3. Personalization: Advanced chatbots use natural language processing (NLP) to understand and respond to customer preferences and emotions. 

Combining these three advantages makes it possible to convert visitors into buyers and reduce massive costs in the long run. 

2. Advanced customer insights with data analysis 

Data is the goldmine for small businesses, but analyzing it manually is challenging to do. AI simplifies data analysis and turns complex data into actionable insights. 

Above all, AI identifies trends in purchasing patterns and helps businesses tailor offerings. Moreover, you have other key features such as predictive analytics and real-time reporting that help visualize data and track performance metrics in real-time. 

AI-driven analytics help startups make informed decisions that meet customer demands and needs. Having the right data in place is directly related to making more money in the long term. 

3. Improved customer personalization 

Personalization is the key to standing out from competitors. AI allows small businesses to deliver excellent experiences by analyzing customer preferences and behavior. 

71% of customers nowadays are expecting companies to personalize services. That being said, here are the ways how AI is helping businesses personalize their services: 

1. Product recommendations: AI personalized product recommendations are used by many businesses and it’s a common practice set up by Shopify to make sure it’s following current user preferences. For example, even if you scroll through social media channels and search for something, you’ll see that it’ll start showing up more on your feed. This is all thanks to the help of AI product recommendations. 
2. Dynamic pricing: AI tools can adjust prices in real-time based on customer demand, analyzing competitors' prices, and other factors that link to it. 
3. Customized experiences: AI tools allow businesses to personalize website content for individual visitors, which is great for giving first impressions and turning them into paying customers. 

Personalization fosters customer loyalty and improves conversion rates. While AI tools are unarguably the best at personalizing product recommendations and content, they are also great at helping startups increase their revenue and leave great first impressions. 

4. Better online security 

You may be wondering how improved online security can make startups money and reduce costs. Well, it’s simple, customers are always going to purchase from businesses they feel safe at. If your business is promoting safety, this will impact your long-term revenue. 

There are more than 2,200 cyber attacks per day, and on average, there’s a cyber attack every 39 seconds! AI-powered cybersecurity solutions provide companies with robust protection by identifying and mitigating risks in real-time. 

Your main advantages of using AI tools to protect your online startup includes: 

1. Threat detection: AI monitors systems for any unusual activity, alerting you for any potential breaches. 
2. Fraud prevention: There are plenty of fraud prevention tools you can use to detect fraudulent transactions. Many of them assess risk scores to users and the higher they are, the more it’ll monitor or block them out. 
3. Data encryption: AI makes sure that sensitive data is securely stored to prevent any unauthorized access. Two-factor or multi-factor authentication practices are used to prevent this from happening, which makes it almost impossible to breach data. 

Protecting your information is important and it can save your business reputation which is closely linked to your long-term revenue. A business reputation is highly important and if it’s ruined, your revenue can be as well. 

5. Refined recruitment process 

Recruitment and employee management can be highly time-consuming for startups. The worst-case scenario can be having to hire someone over and over again. 46% of unhappy employees will look for another job in the following three months. 

AI helps reduce time consumption in the hiring process and time is the most valuable asset we have nowadays. Let’s take a closer look at how it manages to help recruiters do this: 

1. Candidate screening: AI tools use an applicant tracking system (ATS) to quickly scan resumes based on the criteria set. This helps recruiters save lots of time since it’s not easy to manually scan hundreds of resumes. 
2. Employee training: Popular AI platforms such as Udemy educate newly hired employees and make them grow over time. This helps reduce employee turnover rates and makes new hires more experienced which benefits your startup in the long term. 
3. Performance tracking: Provides AI-driven insights that assess employee satisfaction and performance. Staying updated with employee's satisfaction and performance.  

While turnover rates increase at workplaces where job satisfaction is low, AI tools are helping employees enjoy their jobs even more and making it much easier for recruiters to refine the hiring process. 

6. Streamlined operations through automation

AI helps small businesses automate repetitive tasks by freeing up their time and resources to focus more on strategic activities. You’d be surprised how many tasks take up your time daily and when AI handles all of these repetitive tasks, it saves you time and money in the long term. 

Also, AI has a lower margin of error in repetitive tasks. Recent studies show that AI's margin of error is 6.8% while in humans, it’s at 11.3%. This means that AI has a lower margin of error and is less likely to commit errors. 

Let’s take a deeper look at how AI is helping businesses automate daily tasks:

1. Automating routine admin tasks: Startups might sometimes struggle with handling time-consuming administrative tasks. AI-driven automation handles repetitive processes such as email management, data entry, scheduling, and unparalleled efficiency. 
2. Enhancing financial management: Managing finances is important for startups, but can be challenging to do when you don’t have a dedicated staff. AI minimizes errors in tax preparation and bookkeeping. It forecasts and helps startups overcome financial challenges.
3. Streamlined customer support: Delivers outstanding customer service that is important for startup success. This is done with the help of AI chatbots and virtual assistants. 

Task automation is crucial if you want you and your team to use their time much more efficiently. AI is not helping startups lower their margin of error, but focus their resources on more important things. 

7. Simplified inventory management 

Specifically for startups in e-commerce and retail, managing inventory is highly important. Many startups struggle with this part, but AI tools are streamlining stock management, reducing waste, and improving supply chain visibility. 

Key features of inventory management include: 

1. Automated reordering: Automating purchased orders to prevent stockouts. This means that if any product is out of stock, it won’t let you purchase it. Many e-commerce startups encounter this issue as they forget to inform buyers that something is out of stock. 
2. Demand forecasting: AI tools predict sales trends and help startups maintain their optimal stock levels. 
3. Inventory tracking: AI-powered systems provide you with real-time inventory level updates. 

While many startups might struggle with effectively managing their inventory, there’s nothing to worry about because AI-powered systems are automatically informing you and customers of what’s available and what isn’t. This helps prevent stockouts and keeps business owners updated on what steps to take next. 

A new future powered by AI 

AI tools are revolutionizing the online world and how startups operate and streamline their daily tasks, allowing them to make money in the long term and significantly reduce costs. They help you understand patterns and come up with solutions in a short time. 

That being said, for startups, AI tools are a game changer, and regardless if you are using them for customer support, marketing your product and service, or whatever other reason, you’ll be saving lots of time and money.