In today’s digital marketplace, customers expect much more than good products. Today’s consumer wants a tailored (our word) experience that is relevant, personal, and timely.
The cookie-cutter approach to providing customer experiences is becoming obsolete. Businesses that understand what their customers like, what they need, and when they need them are the businesses that emerge from the digital world.
This shift is why personalization is the future of consumer engagement. Personalization in some form be it personalized emails, personalized product recommendations, personalized website experiences, or personalized support is the bridge that helps businesses build a better bond with their customers.
This article will discuss what personalization is, why it matters now more than ever, how it works, and how businesses large and small can harness it to enhance engagement, drive loyalty, and retain customers.
What is Personalization in Customer Engagement?
Personalization is adapting content, offers and experiences to a user on an individual basis based on their daily interactions, preferences and behaviors.
Personalization allows a business to send content and messages to a customer that feels like they are customizing something for that customer specifically, rather than offering the same experience to everyone.
For example:
- A customer sees product recommendations based on items they browsed before.
- An email is personalized with their name, and even suggests items they were interested in.
- A website shows a difference in the homepage content based on a user's location or behavioral data.
It's the little things! These small details can change the way customers feel about the brand because they know someone is paying attention.
Why Does Personalization Matter?
There are several reasons why personalization is now an essential aspect of customer engagement.
1. It's What Customers Expect
Customers are accustomed to personalized experiences. When Netflix shows recommendations based on previous viewing and Amazon highlights recently viewed products, it demonstrates that people really do expect relevance.
If your brand isn't doing personalization, your customers may feel like they aren't valued and are at risk of disconnection.
2. Personalization Creates Better Relationships
If customers feel seen and understood, they are more likely to trust and remain loyal to you. Personalization fosters empathy, emotional connection and conveys that you understand their needs and wants, and this leads towards repeat business and long-term relationships.
3. Conversions and Sales Improve
Personalized experiences can steer users toward the actions that you wish them to take. Maybe that is as simple as clicking on a link, signing up for a service, or making an online purchase or it could be a more complex action in the future.
Tools such as sales engagement software help deliver these personalized touchpoints at scale. Personalization increases the likelihood that users will respond in the way you want.
4. Overload of Information
There is just too much out there. Personalization will help to cut through the noise by offering information that is useful and relevant to them.
5. It All STARTS With Data
Most businesses have access to today’s tools to be able to track user behaviors across websites, apps, emails, etc. This information can be leveraged to not only learn and understand customers but to provide smarter personalized experiences.
Types of Personalization
Personalization can happen in many ways across the customer journey. Here are a few specific examples:
1. Email Personalization
- Including the first name in the subject line or greeting
- Recommending products based on prior browsing or purchasing activity
- Include offers or discounts based on a user’s behavior (e.g., abandoned carts)
2. Website Personalization
- Showing different homepage content, or content for logged-in users
- Personalizing product listings based on prior searches
- Displaying local events or pricing based on a user’s location
3. Product Recommendations
- Recommending items that are widely purchased together
- Recommending similar items based on a product previously viewed
- Promoting trending items in the user’s favorite category
4. Advertising Personalization
- Retargeting ads based on products viewed but not purchased
- Promotional ads based on customers’ interests or characteristic behaviors
5. Customer Support Personalization
- Support agents utilize customer history to assist with some speed.
- AI chatbots for websites greet users on a first-name basis and refer to prior interactions for their experience with the brand.
How Personalization Works
Collecting and analyzing customer information allows for personalization. The process typically goes like this:
Step 1: Collect Data
Businesses can collect data in the following ways:
- Website cookies and activity tracking
- Purchase history
- Email interaction
- Customer support handlings
- Surveys and feedback
To achieve the best results from your personalization efforts, having clean and enriched customer data is essential. Data enrichment technology ensures your customer data is accurate and up-to-date, which is critical for personalized experiences.
Step 2: Analyze Behavior
The data can then be analyzed by AI and machine learning tools to detect patterns, such as:
- When do people shop
- What are the pages they visited
- What products did they like
- What emails did they open.
Of course, you need a sharp analytical mind for that. Debsie, an online learning platform can help you start the process.
Step 3: Segment the Audience
Using this information, we could then categorize customers into segments like:
- First-time visitors
- Repeat Customers
- Bargain hunters
- Beaten cart customers
Step 4: Deliver Personalized Content
With this segmentation data in hand, businesses simply deliver content personalized to the segment or, in certain cases, the individual. Deliveries could be done through:
- Dynamic website content
- Automation of emails
- Targeted ads
- In-app messages
Step 5: Learn and Improve
The system continuously learns from every interaction, and subsequently refines its recommendations and strategies.
Tools and Platforms That Help with Personalization
There are a number of tools that can help organizations provide more personalized experiences for customers, including:
- Email marketing tools (Mailchimp, Klaviyo, ActiveCampaign, Mailtrap)
- E-commerce platforms ( BigCommerce, Shopfiy or WooCommerce, Cs-cart) supplemented by personalized product recommendation plug-ins
- CRM systems (HubSpot, Salesforce) to capture, log, and analyze customer behaviors and preferences
- Analytics tools (Google Analytics, Mixpanel) to identify users' journey
- AI tools for real-time personalization and automated delivery of content.
Even small businesses can take advantage of personalization tools for getting started, and pay-off potential, while gradually increasing and becoming more complex in the personalization strategies they pursue. Consider integrating solutions like shared commercial kitchens that use AI personalization to optimize user experience and operational efficiency.
Benefits of Personalization for Businesses
Now let's analyze the business benefits of personalization.
1. More Engagement
Customers are more likely to engage with materials that address them directly and in a personal manner. Personalized emails have greater open rates and click-through rates than generic emails.
2. Increased Conversion Rates
When customers see the products or services that they need, they take action to acquire them. Often personalized product recommendations lead to much higher sales.
3. Greater Customer Retention
If a customer feels that your brand recognizes them, they will be inclined to return. There is a feeling of value associated with personalization, which creates loyalty. So, customer retention is the one of the top best benefits of personalization for business.
4. Better Customer Satisfaction
Personalization helps provide the right information at the right time which can help prevent problems before they happen and that results in happier more content customers.
5. Better Marketing
Rather than sending the same message to everyone, personalization allows a company to hone-in on the right audience with the right message. This means less time wasted and lower marketing spend.
Challenges of Personalization
The benefits of personalization are clear, but personalization presents its challenges as well:
1. Data Privacy Issues
Customers are receiving data privacy education and becoming more aware of how their information is collected and leveraged. Organizations must comply with privacy legislation such as the GDPR or CCPA, and clearly indicate how customers' information will be used.
2. Managing Data
Collecting and managing customer data can be challenging. It is not enough to say, "Data is the new gold"; organizations must have the capabilities and the infrastructure to support the responsibilities that come with large amounts of data and data management.
3. Finding the Balance
Excessive personalization may feel creepy or invasive to customers. Providing valid and relevant personalized recommendations are important. Organizations should focus on providing valid and respectable recommendations, versus overly personal or aggressive recommendations.
4. Multi-channel Integration
In-store experiences are being reshaped by e-commerce. When messaging is incorporated across email, your site curbside pickup, mobile apps, chats, and support, everything is enhanced but becomes more complex without the right structure to enable a frictionless experience across the organizational channels.
Real-World Examples of Personalization
Let's take a look at some popular companies that are using personalization effectively:
1. Amazon
Amazon makes recommendations based on someone's past browsing and buying behavior. In addition to recommendations, Amazon sends follow up emails, and puts a personalized home page in front of each user.
2. Netflix
Netflix suggests movies and shows to watch based on their history, preferences, and user ratings. They even take it a step further and change thumbnails to coincide with prior subject interests.
3. Spotify
Spotify creates customized playlists such as "Discover Weekly" and "Daily Mix". This is tailored for each listener based on their past listening habits.
4. Starbucks
Through the touch of a button on their app, Starbucks provides personalized drink preferences, exclusive deals, and/or updates of your favorite order with reward selections.
These examples demonstrate that personalization can create deeper customer engagement, more purchases over time, and a stronger connection with customers.
How to Get Started with Personalization
You do not need to engineer everything today. Small beginnings will turn into bigger changes over time. Here is a simple roadmap to follow:
Step 1: Understand Your Customers
Understand who your customers are, what they want, and their buying behavior. You have easy data to work with—website visits, email data and buying history.
Step 2: Understand Your Audience Segments
Consider if certain segments of your audience are similar in ways that matter to you—first time buyers, repeat customers or customers that bought in the past for the same kind of product.
Step 3: Personalize One Channel
Decide on an important point in time when personalization will matter the most. Start simple—a personalized email where you include first names. You can build from a place of adding personalization. Maybe recommend products based on previous behavior.
Step 4: Find the Right Tools
What tools do you need to collect the data you need, and deliver a personalized experience? Start off with some simple tools. When using these, some platforms offer freemium plans.
Step 5: Test and Adapt:
Measure your customer responses to personalized content. Check your open rates, click rates, sales conversions, customer feedback. Adjust based on the effectiveness of the actions you took on your customer.
