Enhancing Customer Experience Through AI ‐Powered Marketing: How AI ‐Driven Chatbots Impact User Engagement, Satisfaction and Purchase Retention?

ABSTRACT AI‐powered chatbots are becoming central to customer experience strategies in digital marketing. This study examines the impact of various types of user gratifications: utilitarian, hedonic, technological, and social—on user engagement with chatbot services. Additionally, it examines how perceived privacy risks impact engagement and how engagement, in turn, influences customer satisfaction and retention. A survey was conducted among 179 Vietnamese participants with prior experience using chatbots. The data were analyzed using SmartPLS 4 with Partial Least Squares Structural Equation Modeling (PLS‐SEM). The results indicate that utilitarian and technological gratifications significantly enhance engagement, while hedonic and social gratifications show weaker effects. Privacy risk negatively impacts engagement. Furthermore, engagement is positively linked to customer satisfaction but does not directly predict retention. These findings offer practical implications for improving chatbot implementation and contribute to theory by integrating the Uses and Gratifications (U&G) and Perceived Risk (TPR) frameworks into AI‐driven marketing research.