INFLUENCE AI DRIVEN MARKETING TO CUSTOMER RETENTION AND CUSTOMER LOYALTY THROUGH EMOTIONAL CONNECTION (STUDY OF LALAMOVE USERS IN JAVA, INDONESIA)

Abstract

This study aims to analyze the influence of AI-driven marketing to customer retention and customer loyalty with emotional connection as a mediating variable. The study employs a quantitative method, analyzed through Partial Least Squares Structural Equation Modeling (PLS-SEM). The research sample consisted of 385 respondents who used Lalamove services in Java Island, selected using purposive sampling. The results of the study show that AI-driven marketing has a significant impact on customer retention and customer loyalty, as well as on emotional connection. Furthermore, emotional connection has been proven to have a significant influence on customer retention and customer loyalty, while mediating the relationship between AI-driven marketing and both variables. However, the mediation that occurs is partial because of the direct influence of AI-driven marketing remains significant. This finding confirms that the implementation of AI-driven marketing can increase customer retention and loyalty, both directly and through strengthening emotional connections. The practical implication is that Lalamove can strengthen its business strategy by optimizing AI-based personalization while building emotional engagement with customers in Java.