In personalized customer experience, you matter the most, even when it’s about buying books.
Take Penguin Random House. The publication features an online quiz for readers to reveal their reading qualities and what makes them unique. It then suggests books that fit their tastes.
To further pique the reader’s curiosity, the company also offers to set you on a blind date. Take a matchmaker quiz and you meet a famous character from classical literature.
Such examples of personalizing customer experience make customers feel more valued and listened to. It helps brands appear more human and trustworthy, which can boost customer loyalty and retention.
According to McKinsey & Company, companies that personalize experiences can garner up to 40% more revenue than others. Customers who receive such experiences are willing to pay a premium for services. Let’s explore personalization in customer experience, why it’s important and how companies are using it to their advantage.
What is personalized customer experience?
Personalizing customer experience means treating customers as individuals with unique tastes and preferences. You tailor your products, services, and marketing interactions based on their needs.
The personalization is based on data collected from customers indicating their behaviors, and purchase and navigation history. You then suggest solutions and talk in their language to drive conversions.
A sample Penguin Random House’s quiz results to know your reading type.
Close to 22% of customers are happy sharing their personal data with brands in return for a personalized experience, according to Deloitte.
Companies are also going a step further today to ‘hyper-personalize customer experience’. This involves connecting online and offline channels and predicting customer preferences.
Personalizing customer experience lets you anticipate customer needs. As Steve Jobs, founder of Apple said: “Get closer than ever to your customers. So close, in fact, that you tell them what they need well before they realize it themselves.”
In marketing, personalizing customer experience covers multiple aspects:
- Targeted messaging: Delivering targeted messages to customers based on segmentation along geography, behavior, psychographics and intent data.
- Multichannel marketing: Relying on multiple channels such as emails, social media, landing pages, push notifications and SMS to deliver messages.
The multichannel approach focuses on delivering consistent messages across channels through a unified view of the customer.
Already, 47% of businesses are personalizing communications across channels, indicates research by Harvard Business Review Analytic Services.
- Customized offers: Providing tailored discounts, product recommendations and promotions. This also includes dynamic pricing based on customer behavior and market conditions.
Example: Nike’s shoe customization feature lets customers take the lead. The NikePlus loyalty program also provides unique product recommendations based on buyer behavior.
- Contextual targeting: Valuing cultural nuances of different customer segments to craft messages around occasions, including festivals such as Christmas or Diwali.
- Journey mapping: Adjusting brand positioning and delivery of different content types depending on the location of the customer along the stages of the sales funnel: Awareness, interest, decision and action stages.
- Tracking metrics: Such as conversion rates, engagement and customer lifetime value to gauge impact of marketing campaigns.
Benefits of personalized customer experience
Author Kevin Stirtz believes that customer experience is the next competitive battleground. Personalizing experiences helps brands seem more relatable while setting them apart.
It brings many benefits:
Increased customer satisfaction
By understanding customer preferences and behaviors, you can tailor experiences for them, leading to higher satisfaction rates.
The anticipation of customer journeys also helps in creating smoother customer journeys, reducing frustration.
Personalization empowers customers making them feel in control. Such experiences also have a higher recall value as they delight customers in unique ways.
Example: Netflix recommends movies and shows based on viewer’s history.
Netflix’s recommendations system suggests movies and shows based on viewer’s interest and watch history.
Improved customer retention
When customers feel valued, they trust you more and stay with you. Some may even become evangelists for your brand.
The retention increases the lifetime value of customers. You can offer special privileges to loyal customers and cross-sell and upsell products to them.
Example: A loyalty program by California Burrito adds points on every meal purchase, redeemable at a later stage.
Enhanced revenue
As many as 40% of US consumers have purchased something more expensive than they planned owing to personalized experience. The loyalty garnered through such experiences promotes repeat purchases while lowering cost of acquisition.
Nearly all retailers achieve an increase in revenue per user after personalization investment, according to research by Netcore.
Offers matching customer’s histories and messaging tailored to their voice drives better conversions, thereby helping lower market spends.
For instance, CakeRush increased its revenue by 80% using Netcore’s personalization platform.
Example: Amazon increased its revenues through its product recommendation features, including ‘people also bought’ widget and personalized home page.
Find out how much ROI web personalization could unlock for your website using our calculator!
How to personalize customer experiences
Personalizing your customer experience starts with identifying the goals for your strategy. It must be closely tied to your business goals and scaling strategy. Customer-centricity should define the approach.
Here are the steps:
1. Gather and analyze data
Before collecting data, define your personalization strategy. It should align with your brand persona including consistent voice, tone and identity.
Be clear about the goals you’re trying to achieve. For example, it could be to boost increased sales, improved customer loyalty or a combination of multiple goals. Set timelines for goals and make progress measurable.
Determine which information is crucial to understanding your customer. These could relate to:
- Demographics
- Psychographics
- Social media interactions
- App usage data
- Financial information
- Browsing history
- Buying history
- Customer support and sales interactions
- Market reports and research
Rely on a suit of data collection modes for this including surveys, website analytics, offline interactions, third-party data, social media listening.
While collecting data, be transparent to your customers about the purpose, scope and methods of data collection. Stress that the data collection would help enhance their experience.
2. Create segments
Some reliable customer engagement platforms unify all of the above to provide a unified view of the customer, with real-time updates based on every interaction.
After you clean data, segment it based on common characteristics such as geography, preferences and attitudes, and social media behaviors. Create multiple buyer personas out of this.
Using Netcore, you can integrate profile data, multichannel activity and behavioral data to create segments. These segments are dynamic in nature as they update every time a user interacts with you. You must also set segmentation and targeting rules based on different variables.
3. Implement personalization
Integrate your customer data with marketing and sales systems. Automation tools make this easier and free you from repetitive tasks.
Create content templates and assets for different customer segments. Using personalization platforms, you can auto-populate them with customer-specific information.
- Deploy AI: You can rely on AI to drive product recommendations based on customers’ explicit and implicit behaviors. AI integrations keep output dynamic based on every customer interaction.
Predictive personalization is one of AI’s most significant applications in customer experience, according to a Forbes article. It also helps create niche campaigns for customers to target their unique pain points.
Netcore’s Co-Marketer helps you highlight relevant and contextual recommendations in real-time.
For instance, it helped Mothercity Liquor achieve a 5 times uplift in website engagement through tailored recommendations.
- Harness multiple channels: Today, customers interact with you across multiple channels, one at a time and simultaneously. Therefore, it’s crucial to target them on channels most effective for them. According to research, omnichannel customers shop 1.7 times more than shoppers using a single channel. Further, more than half the B2C customers engage with three-five channels each time they make a purchase.
Knowing which channels your customers prefer and leveraging those for targeted messages can boost conversions. Personalizing those channels such as emails, push notifications and landing page prompts can drive greater value.
For instance, using interactive emails, you can embed interactive elements in emails such as GIFs about popular culture references that suit your customer’s tastes.
You must pick the right platforms for this. Performing brands do not simply invest where they can, found Gartner. They focus on tools that “drive greatest impact on conversions. such as directing users to high-value touchpoints across channels, creating intentional cross channel experiences that move customers down the funnel.”
Here, Netcore helps you create multi-channel marketing campaigns with different messages for different segments along the buyer’s journey.
Example: Starbucks promotes use of its mobile app, emails and in-store experience to gain rewards for purchases. The company targeted consumers based on their preferred channel.
4. Refine personalization
Create dashboards to offer a unified view of your customers across various touch points along their journey. This lets you review performance of your campaigns and redirect resources to effective outreaches.
Continually update buyer personas based on real-time collection of new information, including expansion to newer markets and introduction of products.
Deploy A/B testing to experiment different personalization strategies and determine the most effective one. Do pilot runs before scaling campaigns. Here multivariate testing can help you reach the best possible combination of variables for an optimal campaign.
Most importantly, listen to your customers. Gather feedback through active signals like surveys, social media and support platforms.
Example: Spotify’s ‘Discover Weekly’ feature updates music suggestions based on dynamic user activity.
Examples of personalized customer experience
Personalization is good for business. Seven in 10 retailers who invested in personalizing customer experience have seen at least a four times return on investment, according to research by Netcore.
Grammarly
The AI writing assistant tool sends personalized reports every week to its users informing them about their writing style and tone. It segments the tool’s use along productivity, mastery and vocabulary and tone. Grammarly lists the top mistakes a user makes, suggesting ways to correct them.
Part of Grammarly’s weekly report that points out top mistakes.
Domino’s
The pizza maker offers discounts on customer’s favorite meals. It does so through push notifications. The app uses previous order and navigation history of customers to deliver offers.
Alexa
The voice assistant can differentiate between Amazon accounts by recognizing the voice of the associated speaker. Users can fetch information about their account without logging on to Alexa.
Gatorade
The energy drink’s wearable sweat patch lets users calculate how much they sweat during a workout. It then offers personalized recommendations on fueling and boosting performance.
Gatorade’s sweat patch that shows fluid profile of users after a workout.
Get personal
Personalization has several benefits for brands. It delights your customers and helps maximize revenues. Most importantly, it lets you differentiate yourself from competitors.
To personalize customer experience, you must start by defining the goals for your personalization strategy. These goals should be linked to business goals.
Next, gather and analyze data, create segments, and choose appropriate channels and content types to personalize.
Roping in technology can help here.
Netcore helps you create a data-backed unified view of your customer. The tool’s data platform lets you view every customer interaction to attribute accurately and run effective campaigns. You can also perform multichannel marketing by using AI to capture real-time customer behavior for dynamic segmentation.
By automating on a customer engagement platform like Netcore, you can create templates for different types of customer interactions and set triggers for customers.
Personalization lets your customers know you value their preferences and time. This is important to build trust in you and create long-lasting relationships.
