A personalized experience used to be as simple as greeting a customer by name, but as digital and physical experiences merge, the bar for meaningful customer experiences is rising. Companies like Amazon, Starbucks, and Netflix have trained consumers to expect a personalized experience from businesses. And companies that stick with generic messages and experiences risk throwing away money.
More than three quarters (77 percent) of online shoppers who signed up to receive promotional e-mails said they were more likely to purchase from that merchant if the messages featured products based on their shopping habits and preferences, according to a survey of about 2,000 U.S. adults by Harris Interactive. While the purpose of a personalized experience-making customers feel valued-remains the same, technology and data is making it possible to push the boundaries of those experiences.
Indeed, U.S. consumers want more personalized retail experiences but they are divided on the tactics companies use to engage them and the types of personal information they are willing to share, according to Accenture. From a survey of about 1,000 consumers, nearly 60 percent want real-time promotions and offers, but only 20 percent want retailers to know their current location and only 14 percent want to share their browsing histories.
Consumers also expect to get something in return for sharing their personal information. The key benefits cited include access to exclusive deals (64 percent), automatic crediting for coupons and loyalty points (64 percent), or special offers (61 percent).
"Your customers know if they're your best customers and they expect to be acknowledged," says Jeriad Zoghby, managing director and global lead of personalization and media optimization at Accenture. Personalization is a great way to let customers know they're valued, Zoghby continues, but having a contextual understanding of a customer's preference for receiving personalized communications is also important.
Companies should divide the personalized experiences by a tiered system, he adds. For example, the occasional shopper could receive customized emails that introduce them to complementary products and services and valuable customers who tend to spend more would receive early access to new products based on their preferences in a high-touch experience.
Having insights into customer preferences also provides benefits beyond the direct ROI of satisfying an individual customer. If a company has excess inventory, for example, instead of discounting it or paying for generic display ads, the company should target existing customers who are likely to be interested in it. "Personalization is a data-driven experience and savvy marketers will look at how it impacts the rest of their company by pulling in inventory information and other types of data," Zoghby says.
Companies are looking for ways to analyze and act on data insights to differentiate the customer experience, says Eileen Kolev, industry solutions manager for retail at business intelligence provider MicroStrategy. "Brands know their customers expect personalized experiences," Kolev says. "And they have all this data, so it's a question of how quickly can they make use of it."
Retailers, Kolev continues, are using mobile technology combined with analytics on customer behaviors, purchase histories, and other information to deliver customized messages to in-store customers in real time. Retailers are showing a growing interest in using consumer-facing apps that can leverage CRM profiles, loyalty card data, buying patterns, and more to serve up personalized recommendations, she says.
And even though email is still a popular way for customers to engage with brands, companies should make sure that the emails are mobile optimized given that it will most likely be read on a smartphone or tablet. "You have to be where your customers are and communicate with them on their terms," Kolev notes.
For example, AAA Ohio teamed up with Liveclicker to insert weather-based content into emails that can be targeted based on the date and location of the email when it is opened. Earlier this year, AAA Ohio used Liveclicker's LiveForecast feature in a Travel Expo email campaign that was aimed at roughly 125,000 recipients.
The email reminded members of the upcoming event in Columbus, OH and advised them of the weather conditions that were being forecast for the area. Nancy Weaver, senior eBusiness manager at the motor club AAA Ohio, agrees that weather conditions are an effective marketing tool. "We want our customers to know that we're there for them at any time and that we can help them make smart decisions whether it's picking a travel destination or getting their car serviced, Weaver says. "And weather forecasting is another way for us to personalize our engagements with our members."
Compared to prior campaigns that didn't include the weather forecasts, click-through rates to AAA Ohio's site increased by about 10 percent. The company is planning to include the weather feature in other campaigns about travel destinations, Weaver says.
"Weather forecasting adds that extra 'whiz bang' feature that makes our emails more personal and relevant," Weaver notes. "And with all the snow we've been getting, we're excited to use this for things like warm weather vacations and cruises to make our emails stand out even more."
Additionally, consumers increasingly expect "a certain level of personalization" in their interactions with businesses, Weaver notes. "Customers expect businesses to know who they are with minimal effort," she adds. "And if you can't personalize your engagements, your business looks less professional."
The Addressable Customer
Customers are engaging brands across a growing mix of channels including mobile, email, social media, brick-and-mortar stores, and more, making it critical for companies to connect these many touch points. But the lack of a standard persistent ID makes it difficult to identify customers across devices and channels.
Numerous solutions have emerged, such as user IDs or logins. Google and Facebook can identify their users across their respective properties when people sign into their products. Social logins offer other companies similar benefits by letting people skip the process of creating a unique username and password if they log in through Facebook, Google, Twitter, or another entity.
And as more companies use social logins as a marketing tool, companies like Gigya see an opportunity to tie the data with demographic, psychographic, and behavioral identity data to provide richer customer profiles.
Auto racing organization Nascar turned to Gigya for help last year identifying its fans to connect with them on a more personalized level. "We have many dedicated fans, but we wanted to better engage them," explains Ben Selland, senior director of technical operations, in a presentation last week at the Adobe Digital Marketing Summit.
Using its Customer Identity Management platform, Gigya collected user data like names, birthdays, hometowns, education history, and interests from people who signed into Nascar's website through a social login. It then combined the user data with other customer information like CRM data from online registration forms to create customer profiles. Nascar used the profiles to segment and further personalize its email campaigns.
"Now we can send targeted emails to fans who live near a certain race track or tell them about products and drivers that they're probably interested in," Selland says. Selland declined to elaborate on the impact of the personalized content on the company's bottom line, but noted that within a few weeks after launching the social login capability, the company saw a roughly 8 percent increase in website registrations.
The Internet of Me
The rise of Internet-connected objects like cars, refrigerators, and homes that can be monitored remotely and programmed according to personal preferences are quickly becoming a reality. The Internet of Things (IoT) could transform consumers' relationships with brands, opening new opportunities to differentiate experiences. But just building new interconnected devices won't be enough to drive sales.
"The future isn't the Internet of Things, it's the Internet of me," observes Aseem Chandra, vice president of Adobe Experience Manager and Adobe Target. "I don't want millions of connected devices, it's the experience that matters." New devices that are connected to the Internet won't beat their traditional counterparts if they don't provide experiences that are valuable to consumers.
Indeed, what's old is new again in the race for personalized experiences. Brands may become better at predicting individual tastes and provide a wider array of options, but even the most sophisticated experience will fall flat if it's not centered on the customer.