There has never been a time when customer experience was more important than it is today. Customers expect a personalized experience when they deal with a business, and according to a report from Epsilon, 80% of customers are more likely to make a purchase when businesses provide a personalized experience. Personalization improves the customer’s experience, helps drive sales, and increases customer loyalty.
By Scott Clark
Everybody likes to be recognized as a person, an individual with unique traits, desires, needs, and experiences. We all appreciate it when someone remembers our name, our accomplishments and our choices. Consumers feel the same way, and appreciate it when a business recognizes them and caters to them personally. In a report from Accenture in which they surveyed 8000 consumers around the world, 91% of those polled said that they are more likely to do business with brands that remember, recognize, and provide them with relevant recommendations and offers. In this article, we’ll share 5 things you can do to personalize the customer experience.
It’s All About the Customer Journey
The customer journey is all the intersection points that a customer has, that is, every interaction the customer has with a business, from the first time they search for your business online, to their first experience on your company website, on through browsing your products, services or content, though the product selection and shopping cart experience, and then placing and receiving their order. It includes any emails, texts, phone conversations, newsletters or other correspondence a business has with the customer, and also includes any reviews or follow up questions they have, as well as any customer service interactions. In short, it is everything that they experience when they interact with any part of your business or brand.
By looking closely at the intersection points in the customer journey, we are able to create a history for each customer, determine future buying trends, make relevant suggestions and recommendations, and personalize the experience a customer has with a business, all of which has the effect of improving the customer experience. The intersection points also reveal any pain points (negative interactions) the customer has had the misfortune of experiencing on their journey. This provides a business with the opportunity to make improvements and adjustments that can improve the experience for every customer.
Related Article: Why the Time Is Right for Personalization
Segmentation Was Then, Micro-Segmentation Is Now
Segmentation used to be enough to deliver a personalized experience that customers appreciated. If a customer bought a shirt with their favorite sports team logo emblazoned on the back, and later received an email from the business that showed the customer various items with a sports theme, the customer was satisfied. Now, however, that email should display shirts that are emblazoned with that customer’s favorite sports team’s logo. The customer no longer wants to be treated as a group of people with similar interests (which is referred to as “audience targeting”), they want to be treated as an individual with very specific likes and dislikes. This is an example of micro-segmentation, and it’s what customers are expecting now.
Peter Curran, general manager of digital commerce at Lucidworks. Curran had this to say, “Traditional top-down segmentation is too general and too static. Just because I peeked at a $2000 espresso maker doesn’t mean I’m a big spender, or just because I bought a Mr. Coffee for my son’s dorm room doesn’t mean I’m a value shopper, just because I’m male doesn’t mean I don’t buy gifts for my wife or daughter. None of that is personalization.”
The level of specificity for customers has gotten to the point where audience targeting is practically (and appropriately) considered to be spam. “We now have the ability to be way more specific about how products are merchandised because we can combine product purchase and browse history with in-session signals to microsegment a guest.”
Harry Thakkar, a partner at Avatria, shared how segmentation can still be effectively used as part of the personalization process, but it must be followed up with specific and relevant personalization actions. “Once the customer data has been collected, it can be analyzed and segmented to help make it actionable. Segmenting is the process of using the data to organize customers with similar characteristics or shopping needs together. After you’ve grouped your customers into different personas or segments, you can then apply specific personalization strategies to them. Note that the more signals you can use to segment your customers, the more accurate your personalization will be–buying diapers once may not mean the customer has an infant, but buying diapers consistently over six months is a better indicator.”
Relevance Is Everything
Research from a Gartner survey on marketing personalization indicated that brands stand to lose 38% of their customers due to poor personalization practices. Customers are not interested in receiving recommendations that are relevant to people similar to themselves, they want to receive recommendations that are relevant to them, personally.
When a customer receives an email from Amazon, Amazon doesn’t show them products that people like themselves would be interested in, but rather, they show the customer products that are unique to their purchase and browsing history — and those customers are likely to visit the product page for those products that have been suggested, and actually purchase the product that was shown to them. Amazon recognizes a customer by name when they visit the Amazon home page and provides the customer with instant access to recent purchases, and showcases products that are likely to interest them, personally. They know the movies the customer has watched, and make recommendations based on their specific interests. Everything Amazon offers customers is uniquely relevant to them. As a result, when a customer gets an email from them, they are more likely to read it and click through to the product page. Customers appreciate the efforts Amazon has made to personalize and simplify the shopping experience.
Because of the high level of reliability and personalization they offer, Amazon and other tech giants have raised consumer expectations very high. Customers have used these services extensively during the COVID-19 pandemic, and they have come to expect the same level of personalization from all the brands they do business with.
John Nash, CMO at Redpoint Global, spoke with CMSWire about consumer expectations. “Today’s customers have higher expectations than ever for brands. Generic, repetitive, irrelevant messaging leads to fatigue and frustration, whereas timely, personalized interactions reinforce customer satisfaction and maximize lifetime value.”
There Can Be No Personalization Without Quality Data
Consumers are very concerned about privacy and the potential loss of personal data. Fortunately, a recent report from Formation.ai entitled Brand Loyalty 2020: The Need for Hyper-Individualization showed that 81% of the 2000 consumers that were polled said that they are willing to provide basic personal information in exchange for a more personalized experience. From that group, 28% said they were “extremely willing” to provide that information. Their personal data, however, is not free — customers expect their data to be used to deliver a top-notch personalized experience from any business they have provided their information to.
The report also revealed that 83% of consumers are more willing to share their data if the business they are sharing it with is transparent about how they will be using that data. In this age of data privacy, people do not mind sharing their personal information, but only if they have agreed to do so voluntarily, and only if they know how it is going to be used.
Thakkar believes that to effectively manage customer data, a data strategy is required. “A data strategy needs to be crafted that identifies the key points about the customer that the business would like to understand,” he suggested. “This will then allow you to begin compiling that information — whether it is via web analytics, customer profile info, surveys/polls, or past purchase behavior.”
To gain a deeper understanding of each customer, high-quality data is vital. Nash said that “It’s important to lay the foundation and follow the proper steps. First, gather all data sources, including first-, second- and third-party, unstructured, semi-structured and structured, batch and streaming, as well as anonymous and known data. Detailed transactional and behavioral data is also key. Ultimately, you’ll want to know all that is knowable about each customer, while collecting that data in a respectful and ethical way.”
Given the wide disparity of data that Nash spoke of, being able to effectively use that data with relevancy involves a single customer view that entails all of the data that has been gathered. Nash explained that “Once that data has been properly collected, it needs to be accessed and easily understood. A superior, personalized and highly relevant customer experience is only made possible with data that provides the right setting — specifically, a cleansed, up-to-date single customer view that tells you everything you need to know about a customer, or a ‘Golden Record.’”
Leverage Artificial Intelligence
Nash believes that for effective personalization, AI must be used for real-time decisions, and stated that “Advanced, real-time personalization will also require marketers to embrace machine learning to tap into on-the-fly insights that become triggers for contextually relevant communications.” Orchestrating the engagement of the customer is no easy feat. “This is where effective, real-time decisioning (RTD) comes in, which must yield a synchronous experience across all channels,” said Nash. Real-time decisioning refers to the ability to make a decision based on the most up-to-date data that is available, not data from twenty minutes ago, but data from the current interaction with the business.
Geoff Webb, VP of strategy at PROS, gave us his thoughts on the use of AI engines and personalization. He believes that AI-driven personalization helps to create a positive customer experience. “Using AI and machine learning are key to creating personalized offers because they allow vendors to analyze huge amounts of data quickly in order to present the best offer to their customers. That data, on previous interactions and real-time market dynamics, is how businesses unlock the potential of a seamless, personalized, and consistent customer buying experience. And that experience is likely to be the most powerful differentiator for businesses in the future.
AI has also been used to develop intelligent chatbots that can enhance the experience that customers have when they are on a website. Chatbots are useful for providing immediate assistance when customers cannot locate something on the website, or if they have questions about the business.
Without making too broad of an assumption, most of us have interacted with a chatbot on a business website. Most of the time, the experience was lacking something--a human touch. The problem with yesterday’s chatbots was that they were very impersonal, the exact opposite of personalization. AI chatbots are beginning to solve that problem by using real-time customer data which allows them to add a personal touch to the interaction. They have progressed quite a bit over the last few years to the point where it is difficult to know if one is talking to an AI chatbot or a live person. The personalization that AI facilitates goes well beyond knowing a customer’s first name.
Lucidworks’ Smart Answers uses deep learning to enable chatbots and virtual assistants to provide personalized responses to customers. Justin Sears, Lucidworks’ VP of product marketing, reflected that “If you can identify where a customer is on their path to purchase, it enables more appropriate personalization and recommendations.” Smart Answers enhances chatbots with a much greater level of personalization for customers, and can, for example, “detect if customers who recently purchased the same item have similar questions and proactively offer a suggested FAQ answer for that product.”
The applications of AI for enhancing customer experience are myriad. Mike Orr, CEO and co-founder of Grapevine6, suggests using AI to enhance the relevance of communications. “The business relationships that matter are built on authentic human connections. Leading organizations like SAP are moving their AI investment from the back-office to the very front where those connections live. They're investing in platforms that enable advisors, salespeople, and relationship managers to be more relevant and add more value in every communication by applying AI to digital engagement data to surface insights and content,” he explained.
Omnichannel Personalization: Email, Text, Phone, Web, In-Store
The goal of omnichannel personalization is to create consistent relationships with the customer any time they have an interaction with a business. Omnichannel personalization uses data from all channels, including in-store interactions, social presences, phone calls, mobile apps, websites, email, etc. and it extends the experience across every touchpoint between the customer and brand.
Sears recognizes the challenges of omnichannel personalization, and stated that “One of the big challenges to providing a connected experience is being able to collect, analyze, and react to real-time data across all of the different touchpoints customers have with a brand — clicking through a link on a marketing email, abandoning a cart on mobile, researching on a PC. A customer’s profile of preferences should follow them on every channel.”
There are several omnichannel personalization platforms available that make the challenges of omnichannel personalization easier. Typically they are based around an open infrastructure, which allows them to interact with legacy databases to bridge together the various sources of customer data. Another feature of omnichannel personalization platforms is the ability to make real-time decisions, a function that makes up-to-the-moment personalization possible. Other companies offer what they are calling an “omnichannel personalization engine” to provide similar functionality, and still others recommend using customer data platforms (CDPs) to provide omnichannel personalization functionality. The greatest requirement for a truly omnichannel customer experience is the ability to unify customer data, and that is one of the main functions of omnichannel personalization platforms, omnichannel personalization engines and CDPs.
Personalization used to be a nice option for marketing, but today it is a requirement for creating a positive customer experience. By micro-segmenting customers, providing them with highly relevant content, using omnichannel data, and leveraging AI, businesses can create a positive, personalized journey for their customers. As Sears reflected, “An effective personalization strategy enriches the customer experience, leading to greater customer satisfaction, increased revenue, and long-term loyalty.”
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