Nov 30, 2023 | 12 min read

Transforming your business with artificial intelligence

Imagine having a secret tool that not only tackles analytics but also crafts content and handles a myriad of tasks, all to boost your company's efficiency. Introducing: Artificial Intelligence for businesses.

Artificial intelligence in business is revolutionizing the way companies and entrepreneurs operate. From automating analytics work to generating complex content, AI can handle various tasks to make your organization more efficient.

Today, AI is no longer just a silent hero in the corporate world, helping modern brands maintain a competitive edge in their market. While only 35% of companies currently utilize AI in their operations, 91% of the world’s most successful businesses already incorporate it into their workflows.

If used properly, AI technology can transform your business into a more streamlined, consistent, and potentially profitable company. To that end, this guide is your friendly introduction to the perks and quirks of AI in business, along with some savvy tips for integrating it into your workflow.

Evolution and growth of AI in business

From its beginning, AI has been closely linked to big business. When the term was first coined in the mid-1950s, an average AI system cost up to $200,000 a month to lease. As a result, the main players in the field were large research institutions and companies hoping to develop AI into an eventual Return on Investment (ROI).

By the 1980s, the introduction of deep learning allowed businesses to gain knowledge from experience. Corporations quickly utilized this new technology to create expert systems, which could store and relay advice from learned professionals to newcomers in a field.

Since this boom, AI in business has revolutionized much more than how we receive expert advice. The power of contemporary AI has caused businesses to rework how they operate by switching from traditional to AI-driven models. 

For instance, rather than having to crunch numbers by hand, AI-based modeling empowers businesses to emulate countless different scenarios at the push of a button. This allows them to make more informed decisions about:

  • Sales forecasts
  • Marketing campaigns
  • Research and development and other investments
  • Nearly every other facet of their operations

Fast forward to now, and AI can do everything from identifying your most important demographic to generating a video ad for them. For example, Nextdoor’s generative AI tool allows you to enter a prompt to write engaging ad copy. By giving the tool a few details, you allow it to generate tailored copy for your ad and edit how you please. 

To that end, when utilized to their fullest, these tools can benefit your business.

Benefits of AI in business

There are many ways AI can facilitate your business’s operations and, potentially, boost your bottom line. The benefits of AI in business include:

Improved efficiency and productivity

AI completes tasks far faster than humans can. From searching for users in an index to running figures on a proposed budget and generating content, AI takes seconds to do what can take humans hours. 

Imagine a digital marketing agency where the team spends hours researching keywords manually. By integrating an AI-powered tool like a keyword research assistant, they could reduce this process to mere minutes. The AI could instantly analyze search volume, competition, and relevancy, allowing the team to focus on strategy and content creation.

When professionals utilize an AI tool to complete their tasks more quickly, they can handle larger workloads.  

Enhanced customer experience

There are countless ways AI can foster positive and seamless brand experiences, like using programmatic advertising to show the right ad at the right moment to the right consumer. 

Consider an e-commerce clothing store that uses AI to personalize the shopping experience. When a customer visits the website, AI analyzes their browsing history and displays products they're likely to purchase. For instance, if the AI notices a customer often looks at sports apparel, it may display ads for running shoes during their next visit. 

Thanks to this strategy, over 90% of customers have grown to expect such positive User Experience (UX) and deem it imperative to their perception of a brand.

Data-driven decision making

AI can collect and collate data across various platforms and touchpoints to facilitate your business’s decision-making process. Almost every AI tool is capable of:

  • Consolidating user demographics to inform your segmentation efforts
  • Analyzing sales metrics to see which products and services are delivering or underperforming
  • Monitoring trends to help you decide where to focus your marketing campaigns
  • Other data-driven and analytical tasks that can help you secure key insights into your operations

For example, a health food chain utilizes AI to track purchasing patterns across its locations. The AI evaluates sales data and customer feedback to identify that products labeled as "gluten-free" sell twice as much as others. Armed with this insight, the company shifts its product development to focus on expanding its gluten-free offerings, which leads to a significant increase in market share within that category.

Cost reduction through automation

AI automation gives smaller businesses with less capital access to services they would otherwise be unable to afford, such as accounting and marketing services.

Imagine a small manufacturing business integrates AI-driven machines on the production floor. These smart machines can predict maintenance needs and schedule self-repair before breakdowns occur, reducing downtime. Additionally, the AI optimizes production flow based on real-time demand data, minimizing waste and energy costs. By automating these processes, the business reduces its operating expenses and can allocate funds to other areas like research and development or employee training, leading to overall growth.

Competitive advantage

There’s a reason why the biggest and most valuable brands rely on AI: it can expand your business and give it a competitive edge over those that don’t.

Consider a local bookstore that uses AI for inventory management. The AI predicts which books will be in demand, helping the store stock efficiently. It also analyzes sales data to create tailored recommendations for returning customers, enhancing their shopping experience. As a result, the bookstore thrives by offering a personalized touch that online giants cannot match.

Whether it’s a bigger budget from saving through automation or more data to help you make better decisions, AI provides businesses with the tools they need to succeed in modern commercial markets.

Challenges of implementing AI in business

Despite all of its upsides, there are some notable drawbacks to implementing AI applications into your organization. 

Data privacy and security concerns

Recently, some functions of modern AI technologies, such as massive data collection on social media, have been scrutinized by professional and political organizations. In response, The White House has drafted a blueprint for an AI Bill of Rights suggesting consumers should:

  • Be protected from unsafe and ineffective systems
  • Not face discrimination at the hands of AI and algorithms
  • Not be subject to covert data collection and have the option to opt out of such practices
  • Know when an automated system is tracking them and gathering information on their actions

While not codified into law yet, this blueprint offers solid guidelines for upholding a healthy relationship between your business, AI, and your customers’ data.

Implementation costs

While the actual costs of implementing AI vary by scope, use, and industry, in general, it’s not a cheap process. In fact, high startup costs are the top factor preventing businesses of all sizes from adopting AI into their current operations.

Despite the initial sticker shock, however, businesses that go ahead and implement AI anyway report an overwhelming degree of satisfaction with its effects. 

Workforce adaptation

AI has developed rapidly in recent years, and many professionals aren’t used to its widespread implementation in the workplace. This can be especially true of smaller businesses, which are more likely to lack a clear AI strategy than larger corporations.

Workers must take time to adapt to the new operational procedures AI establishes. After this initial adjustment period, however, these tools should help refine workflows.

Legal & ethical considerations

Aside from the potential AI Bill of Rights, there are other legal considerations to account for when employing AI in your business—especially generative technologies. Technically, U.S. copyright law doesn’t cover any works created by a computer or machine

So, if you use ChatGPT or similar generative software to create social media content, there’s generally no recourse if it’s plagiarized or stolen. While you still may own individual assets of your brand, such as its logo and slogan, your AI-generated articles and artwork will have no protection under contemporary legislation.

AI applications in business

AI spans almost every facet of contemporary business. No matter what market you’re in, there’s likely an application that will boost your business or expedite your operations.  


Healthcare wait times are on the rise across the nation, but AI can help alleviate much of the burden weighing on doctors and other medical professionals. By using AI, medical providers can:

  • Perform administrative tasks more quickly
  • Instantly answer questions about medications and other essential topics via a virtual assistant
  • Help patients administer their correct dosages with medication-tracking applications
  • Flag unusual patterns in insurance claims to prevent fraud


AI is simply faster and more accurate than humans when it comes to handling data. Finance is a numbers game and, no matter how lightning-fast you are on a calculator, it’d be difficult to match AI’s ability to:

  • Provide insights for data analytics
  • Gauge a stock or asset’s appreciation or amortization
  • Model forecasts and predictions for potential market changes
  • Calculate complex sums in real-time


Just like e-commerce completely revolutionized the retail market, AI is in the process of changing how we perceive and purchase products. AI tools for clothing sites, for instance, have started generating models to match the user’s body type to give them a better sense of the fit. 

Retail businesses have also begun using AI modeling software to predict order volumes, suggest pricing strategies, and deal with customer service. 


From robotic arms bolting cars together to massive factories turning out toys in the trillions, the assembly line is the classic image of AI and automation in manufacturing. AI, however, can do more for the manufacturing process than physically assembling goods. 

Recently, manufacturing businesses have been using AI to:

  • Predict when machinery will need to be serviced
  • Reduce the amount of rejects they produce
  • Keep track of, reuse, and minimize waste materials
  • Increase output by keeping their equipment in optimal working condition
  • Forecast demand and adjust production to meet it

Marketing and sales

Marketers rely on relevant, trustworthy data analysis to craft campaigns and appeal to intended market segments and demographics. Utilizing AI in marketing is the fastest way to gather the necessary data to formulate effective messaging and targeting for your campaign—unless someone else does it for you.

Nextdoor Business offers key actionable insights for businesses of all sizes to give them a better understanding of the markets, areas, and neighbors they interact with. Before kicking off your next campaign, claim your business page, browse Nextdoor’s insights, and get a better idea of what will deliver conversions.

The future of AI in business

While there’s no predicting just how far AI will develop, there are some emerging trends and uses worth paying attention to.

Generative AI, for instance, has only been mainstream since the release of ChatGPT. Now, emerging generative technologies that render picture and video have the potential to redefine how certain businesses operate. 

For instance, realtors can instantly touch up photos and generate listings with AI. In the future, however, AI may even be able to render full house tours for buyers to access remotely via Virtual Reality (VR).

Furthermore, with increasing capabilities, AI could fill more and more roles for small businesses. In fact, there are already discussions on how AI could completely automate the day-to-day operations of most retail stores. Where AI will take business for certain, however, only time will tell.

Integrate AI and Nextdoor into your business strategy 

AI is a critical tool that can help contemporary businesses operate more efficiently. It can automate routine tasks, improve customer experiences, and raise your bottom line. While there are some ongoing ethical and privacy concerns regarding AI, it nevertheless has countless applications across numerous sectors when applied responsibly. 

Marketers and businesses using AI to expand their scope and convert more customers should focus their efforts on Nextdoor Business. Nextdoor is an essential small business advertising platform that fosters close relationships with neighbors and other potential future customers. It’s where real people in 260,000 communities across the country go for recommendations for superb businesses. And if you’re not there, they won’t find you. 

Claim your small business page today and begin meeting your new customers. 


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Author image Nextdoor Editorial Team At Nextdoor, we love local. The Nextdoor Editorial Team is dedicated to telling stories of local businesses, providing product education, and sharing marketing best practices to help businesses grow.