How Personalization Will Transform Customer Experience
As businesses continue to adjust to the post-COVID reality, they need to take advantage of every opportunity for securing customer loyalty and winning over new customers. One area where businesses can make themselves more attractive and stand out from competitors is through personalization.
Personalization is proven to enhance the customer experience, with 91% of consumers saying that they’re more likely to shop with brands that provide personalized offers and recommendations. That appeal is so attractive that almost a third of customers, 31%, wish their experience was more personalized than it is currently. Even if you feel your business is offering personalized services, there’s likely more you could be doing.
So, what exactly is personalization and how can businesses incorporate it into their customer service and marketing?
What a Personalized Customer Experience Looks Like
We’re a long way from the days of one-size-fits-all marketing campaigns and sales tactics. Direct communication options like email and text messages are great marketing opportunities, but generic outreach messages are treated as useless (and annoying) spam. At the same time, the explosion of digital communication channels means so many more brands are fighting for bandwidth, so any way for a business to stand out — like offering a personal connection to their customers — is an important tactic in gaining market share.
Large organizations have employed different tactics to tailor promotional materials to the individual.
Targeted Digital Communication: The most common means of personalized customer communication is through sending direct communication that’s personalized to the user, or to certain defined customer personas. Curating customer data, whether through purchases, registration forms, surveys, or subscriptions is ground zero for these campaigns. From there, you can further define your outreach for different audiences:
- Emails, SMS, and Push Notifications: Thanks to custom fields and segmented lists, personalized messages are your first means of direct personalized contact. They’re also a great means to gather additional information about the customer.
- Banner ads: You can create customer web banners and other click-through ads to display product recommendations based on a customer’s search and purchase history. You can present broad, generalized ads to customers with a light search history, and display more product-specific ads to those who’ve used specific search terms.
- Landing Pages: Landing pages are distinct from home pages, in that they’re the page you can direct users to after they click an ad or a link within an email. You can create multiple landing pages for distinct customer personas, increasing the likelihood they’ll find the content relevant enough to engage with the page.
Recommendations and Customization: This particular tactic is one of the oldest, with Amazon’s recommendation algorithm conceptualized back in 2003. Since then, streaming services like Netflix, Hulu, YouTube, and others have employed their own algorithms to keep customers engaged with content. Digital music and podcast service Spotify combines recommendations with hyper-personalization by creating custom playlists for specific situations. Spotify’s service will even automatically provide extra recommended songs to playlists shorter than 15 songs.
The practice is popular with customers, as 58% prefer to buy from a retailer that recommends options based on their past purchases. It’s so popular, that even public broadcasters have invested in recommender systems to provide personalized content for their viewers. Both the British Broadcasting Corporation (BBC) and the Canadian Broadcasting Corporation (CBC) are employing AI to better engage viewers through curated content.
Highlighting the Individual: The future of marketing is less about promoting a product, and more about highlighting the individual customer. Financial institutions can especially benefit from this shift in approach through an omnichannel view of a customer’s financial history and the ability to proactively connect in real time to promote relevant opportunities. A review of financial institutions on their ability to effectively reach out to customers found that 55% of smaller institutions felt that their ability to identify growth opportunities lagged behind that of their larger competitors – because they lacked the support of an enterprise CRM system.
Having knowledge about your customer’s history — especially their history with your brand — goes a long way toward building connection and loyalty. Up to 65% of customers prefer to buy from a company who “knows their purchase history,” which can include not only what they purchase, but how they’ve used it. One particularly customer-focused campaign was EasyJet’s personalized customer stories. For its 20th anniversary campaign, EasyJet centered its TV and social media ads around EasyJet customers and their travels over the previous 20 years. The company sent out personalized emails that summarized all of an individual’s past trips and stats (like miles traveled and countries visited) and recommended new related destinations and curated “top 20” lists and guides from other customers.
Situationally Based Personalization: Technology has created a greater number of, and greater access to, customer data points. In the healthcare industry, personalized care is essential to ensure best-care practices. For example, technology can be used to perform a more comprehensive screening of ambulatory patients, enter the relevant data into a centralized system, cross-check against records, and then provide recommendations for care. Tom Jackiewicz, CEO of Keck Medicine of USC, noted that technology “would be the quarterback” in determining who could best serve a patient and in what capacity.
Publicly available data is a major untapped resource for companies looking to provide more personalization based on a customer’s location. Geographic, demographic, and meteorologic data can be accessed through government resources and employed for more targeted marketing. One very clever use was Very’s weather personalization for clothing recommendations. The company’s banner ads would suggest personalized outfits for purchase based on local weather patterns, so areas experiencing summer heat would see ads for light clothing, while areas that had rain and colder weather would see ads for layered clothing and jackets.
Personalized Products: Sometimes the simplest route is the easiest and giving customers the ability to personalize their products, or doing it for them, can have positive results. Since 56% of customers would rather buy from a retailer that recognizes them by name, it’s helpful to explore different personalization opportunities. Few personalization campaigns have been as successful as Coca-Cola’s Share a Coke campaign. The campaign reversed an 11-year consumption decline in the U.S. and helped the drink brand boost its presence throughout 80 international markets.
Perhaps the biggest industrial shift for personalized products is in manufacturing. An industry once known for its “assembly line” production of identical parts is now adapting to allow for customer input along different points of the supply chain. Combining newer technologies like laser cutters and 3D printers with customer service portals allows for the development of personalized products straight from the manufacturer – for everything from shoes and computers to cars and machine parts.
The Benefits of Realizing a Personalized Experience
There are many different means of developing personalized content, and most customers say they want it, but does it really produce results? In a Harvard Business Review survey 64% of respondents acknowledged that their businesses’ personalization strategies had a positive impact on their revenue gains, with 19% saying that it had a “big” impact. Other studies have seen similar results:
- A 2019 Personalization Development study found that 93% of companies that had an “advanced personalization strategy” saw revenue growth. In comparison, only 45.4% of companies that did not have a personalization strategy saw equivalent growth.
- A Forbes study found that 40% of executives replied that personalization had a direct impact on “maximizing sales, basket size and profits in direct-to-consumer channels, such as e-commerce.” They’ve also seen increased customer lifetime value and transaction frequency as a result of personalization.
The rewards of personalization are apparent but, like anything worth doing, it requires a commitment to be done well. You should explore and employ multiple strategies so that personalization feels authentic, and not just a few customizable fields on an email. You should also carefully consider the style and degree of personalization, as it can cause harm if done poorly. A Gartner report shows that 38% of customers will reportedly stop doing business if a personalization effort is too “creepy” and invasive of personal information.
How Businesses Can Achieve Personalization
There’s a lot of different things businesses can do to personalize their customer content, for the sake of brevity here are some of the most important foundational steps your retail business can take (if you haven’t done so already):
Explore All Existing Sources of Customer Data
Businesses that have been in operation for years sit on a treasure trove of useful customer data. Multiple different departments such as sales, marketing, and product dev likely collect sales data, survey data, NPS scores and more. One of the first steps will be to break that data out of departmental silos using a system that integrates it across the company.
Companies should take the lead from situationally based personalization campaigns and explore ways to exploit public resources like weather and census data. There’s also the potential to utilize third-party aggregators and ally with business partners to share cross-sections of relevant customer information.
The ultimate goal is to segment customers to the finest level possible. To accomplish this effectively, you’ll need to have the right technical resources.
Employ a Customer Relationship Management System
Lots of customer data is potentially useful, but it can also be overwhelming. A small local business might find spreadsheets useful to organize data, but medium-sized (and larger) businesses and enterprises need more powerful options to make that data actionable. At the most basic level, a modern business needs to have a Customer Relationship Management (CRM) system. Modern CRM systems are designed to bridge multiple departments, automate simple tasks, and even employ chat bots and virtual agents.
Using a CRM system, a company can:
- Manage marketing campaigns across multiple channels through one interface.
- More easily build out profiles based on a customer’s purchase history and preferences.
- Develop custom segments and reports for a better understanding of trends.
- Align different departments to support a unified customer experience.
- Use AI to assist in completing tasks quickly and inform customer insights.
Update any Legacy Systems
Many of the current personalization techniques are possible through CRM systems that take advantage of modern advances in AI to deliver a better understanding of the user experience. Unfortunately, some businesses may feel compelled to hang on to outdated, legacy systems out of concern of not being able to afford an updated CRM system. For example, it can feel difficult for retail businesses invest in necessary IT systems, with 70% of survey respondents admitting that they feel the organizations were struggling to keep pace with digital change.
Businesses need to consider their available options for updating their system. An on-premise CRM system has higher upfront costs for installation and hardware maintenance. Alternatively, a software as a service (SaaS) CRM system will cost much less to implement because it has a monthly licensing fee. Other benefits provided by a cloud-based system include easier remote access, automatic software updates, simplified back-up and recovery, and easier upgrades to scale with size. It’s an important investment decision in how the company will be able to effectively develop personalized customer content.
Take a Holistic Approach
While modern systems can do a lot of the heavy lifting when it comes to implementing personalization, consistently addressing your customers at a personal, individual level requires unity across all aspects of the company. Don’t overlook how important it is to align your messaging across all the customer channels, including call center interactions, direct messaging, customer service portals, and in-person interaction. If personalization is to feel “real,” then it needs to be a frictionless omnichannel approach across all functional areas.
How Hitachi Solutions Can Help
For businesses looking to utilize personalization best practices with their customer outreach, Hitachi Solutions can help. We’re a gold-certified, award winning Microsoft partner with years of experience helping hundreds of clients implement Microsoft Dynamics 365 for CRM, ERP, Customer Service and more.
One way our experienced team can help implement your new system as fast and smoothly as possible is through our Digital Compass guide to technology transformation. This easy-to-follow playbook has two innovation tracks that will assist you in realizing a personalized customer experience:
Experience will assist you in designing solutions from the user’s perspective through our Customer Service, Marketing Maturity, and User Experience workshops.
Operations will better unify your business operations through customer insights and data-informed outcomes via the Dynamics 365 Customer Service platform.