September 16, 2022

A Guide to Personalized Customer Experience

No one wants to feel like a number. And yet, so many companies leave opportunities on the table by not delivering a personalized customer experience.

While it can be tough to know where to start, personalizing your customer experience is no longer an option, it’s a must. Epsilon research tells us that 80% of your customers want personalization, and they’re likely to jump ship if they don’t get it.

However, although most businesses say they consider personalization a top priority, 74% admit their efforts are failing. Unfortunately, in today’s increasingly competitive landscape, failing to deliver a personalized customer experience can lead to lost revenue by losing customers. This statistic came from before the pandemic. And after the pandemic forced digital-first engagement, we anticipate these rates to grow.

Because so many businesses struggle to personalize the customer experience effectively, exceptional performance can be a brand differentiator. More importantly, improving your customer experience to meet and exceed market expectations is not one-and-done. Instead, it should be an ongoing effort.

Why Personalize the Customer Experience?

We’ve established that your customers want personalization. Let’s dive into the value it brings to your company.

Simply put, personalization is one of the best ways to improve the customer experience. As McKinsey says, “Personalization, once limited mainly to targeted offers, now extends to the entire customer experience. This means that customers want personalization throughout their interactions with a retailer—with multiple, personalized touchpoints that enable them to allocate their time and money according to their preferences.”

Although McKinsey is speaking directly about retailers, their observations are relevant for every industry and business, including those selling digital products and services. It makes a lot of sense. Customers are more likely to purchase if they feel your offering is relevant to their needs.

Personalized customer experiences aren’t exclusive to the sales process. They also relate to self-service. When people are able to get answers they need on their schedule, they’re more likely to feel positive about your brand and continue to buy from you.

Avoiding the Challenges of Creating Personalized Customer Engagement

By this point, it should go without saying that personalized customer experiences should be your focus. After all, consumers are 91% more likely to choose brands that give them relevant recommendations.

However, it’s equally important to get it right. The consequences of getting personalization wrong are devastating. Gartner shares that “Brands risk losing 38% of customers due to poor marketing personalization efforts.

To avoid the biggest pitfalls of personalization efforts, you want to make sure that your data is formatted correctly and consistently. After all, you don’t want to address emails to the wrong person, or worse yet, [First Name].

What’s more, you’ll want to ensure you have an accurate map of the customer journey. It enables you to make the most relevant suggestions and recommendations at each stage. If someone has already purchased one of your products, you don’t want to market it to them again. To that end, if they’ve told you they have a specific need and you offer a solution that doesn’t solve it, they’re more likely to move on.

How to Personalize the Customer Experience

Now that you understand the value of a personalized customer experience, let’s dive into the factors you’ll need to consider.

Customer Journey Mapping

Successfully personalizing your customer experience starts by gaining a solid understanding of how your customers interact with your brand. Start by mapping your customer journey and defining every touchpoint—whether digital or non-digital.

Customer Feedback Loops

Personalized customer experiences rely on exceptional data, meaning that User/UX research plays a significant role. In addition to harnessing the power of user data, customer feedback is one of the most important tools in your arsenal. With that in mind, you’ll want to create customer feedback loops by sending customers a series of surveys at different times, including:

  • After a purchase to identify why they bought, and what they want to achieve.
  • After people don’t purchase to understand what happened to stop them.
  • After they conclude your business relationship to understand why they moved on.
  • After any customer service engagements to understand how they view the resolution.

While this information is important for personalizing future customer experiences, you can deliver a better real-time experience by closing every customer feedback loop. Ensure you respond to every piece of feedback, whether good, bad, or neutral. And where applicable, offer resolutions-—no matter how small.

From there, it’s a matter of taking the data and evaluating whether the problem is systemic or a one-off situation. Your next step is updating your roadmap accordingly.

One of the best personalized customer experience examples regarding customer feedback loops is Amazon. While they’re a great all-around example, the way they’ve grown their feedback loops and returns process sets the standard for what all companies strive for.

Predictive Analytics

Today’s world comes with an exceptional amount of data. Using data to analyze trends and insights allows you to predict customer behaviors. For example, after someone looks up tickets to Hawaii, they might be interested in bathing suits, luggage, or travel insurance. The key here is to understand what situations might serve as triggers for purchases. While the possibilities are endless, you can simplify the process by exploring your customer journey map to identify searches, consultations, or even other purchases that might lead to purchases.

StitchFix does this extremely well. While it blends digital and non-digital experiences, they pay attention to trends to find clothing options for users they might love based on similar users.

Omni-Channel Personalization

One of the best ways to deliver an exceptional customer experience lies in taking an omni-channel approach to personalization. In addition to personalized recommendations, customers crave a consistent and cohesive experience everywhere they interact with your brand. This can mean blending digital with non-digital experiences, or it can mean delivering a consistent experience across every digital platform.

Two examples of this in action are Equinox, a fitness brand that has in-person fitness studios as well as in-home equipment that is supported by apps and online content. By delivering a consistent experience online and in-studio, along with personalized recommendations for classes, they’re developing a cult-like following.

Trex is taking a different approach and using augmented reality (AR) to help customers design their future backyard escapes. Best of all, after using the online platform, users can generate a budget, plans, and a shopping list they can take to any retailer or contractor.

Customer-Focused Cultures

It’s not enough to create processes, procedures, and digital products that deliver a personalized customer experience. You must also foster a team culture that prioritizes serving your customers. While developing a strong customer-focused culture is more difficult to quantify, we can look to Costco as a company that excels in this area. By prioritizing their team and their customers, they’ve built trust and created superfans.

Personalization is the Future of Customer Engagement

When you think about leveraging the customer experience as a competitive advantage, it changes the way you view every interaction. According to Salesforce, “creating unique customer experiences as part of a customized journey will win over customers every time.”

And while there are a lot of moving parts that go into creating personalized customer experiences, by taking the time to do it well, you can win customers for life.

3Pillar Global’s team of experts excels at helping companies just like yours develop personalized customer experiences that turn prospects into superfans. Contact us today to get started.

Special thanks to these members of FORCE, 3Pillar’s expert network, for their contributions to this article.

FORCE is 3Pillar Global’s Thought Leadership Team comprised of technologists and industry experts offering their knowledge on important trends and topics in digital product development.

Customer Experience (CX)
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