May 22, 2018Customer Data & Analytics, Customer Engagement, Customer Experience, Customer View, News, Omni-channel | Digital, Personalization, Retail, SmartJourney®
The Big Benefits of Personalization
It’s widely understood in the retail industry that personalization is key to connecting with customers. Companies understand that personalized communications and experiences have great influence on both customer retention and loyalty. However, the reality is many have yet to crack the code, and they often lack the tools to make it happen in a way that’s practical and efficient.
To keep bringing in customers, many retailers turn to discounting, which often inadvertently trains customers to wait for discounts before shopping with them. Unfortunately, this doesn’t bring brands any closer to building the type of loyalty that will keep customers coming back regularly. While discounting is part of the retail game, it shouldn’t be the only strategy to gain loyalty.
Stand Out From the Crowd
Understanding your audience is key to knowing how to connect with them. Retailers who have the tools and resources to embrace audience segmentation (and through that, personalization) stand out in the competitive retail landscape. One effective way of doing this is by leveraging a loyalty program to collect data about customer preferences and behaviors, and then using insights from the data to map out customer journeys, understand customer behaviors, and design and offer value exchange that’s actually meaningful to each customer.
What’s more, consumers are expecting this personalization. Aimia Loyalty Lens found that customers have increasingly high expectations of the brands with whom they share their data. For example, 61% of global respondents and 58% of respondents in the U.S. expect better experiences with companies whom they know hold their data.
As consumers increasingly expect businesses to provide relevant offers, products, and services, the businesses that cut through the noise are using what they know about their customers to customize the collective experience.
A Smarter Discount
This doesn’t mean you shouldn’t discount – but it’s about creating a smarter discount strategy. Data is the door-opener here – gathering data across all customer touchpoints (website, in store, via mobile app, etc.) can help bring the full picture together. From there, analytics help you understand the customer better, to improve and tailor their experience.
For example, we worked with a multi-lane retailer store to help them create a smarter experience. By segmenting their customers based on their interests and behaviors, we found a group of older customers who only purchase specific items each time. Identifying this specific behavior allows us to streamline communications to them accordingly. We stopped sending cross-store offers (since they never purchased anything outside of their area of interest). Instead, we tailored our communications and offers to specific experiences and emails based on the preferences of that customer segment. This was an opportunity to not only connect more directly to this group, but it allowed our client the chance to build the relationship without offering discounts on items this customer would purchase anyway.
The ROI of Personalization
By looking at the people who interact and transact with you, it’s possible to uncover new and improved ways to create personalized and relevant customer experiences. And the proof is in the numbers. For example, in one program that we manage, customers who are involved via interactions (in addition to transactions) may spend upwards of 225 percent more than those who aren’t, over the course of a year.
Outside of expecting a memorable experience, engaged customers tend to transact more. If you understand their needs and expectations, and can provide them with communications that are relevant, you can build more solid and profitable relationships. And the best way to get there? Map out your customer journey so you can begin to find the best ways to provide those personal interactions.