A good personalized strategy begins with a solid plan.
At its core, a personalized strategy is about delivering services, products or experiences that accommodate the unique needs and preferences of new and existing customer segments. In fact, a new report written by Harvard Business Review (HBR) Analytic Services revealed that 47% of executives surveyed are already providing customized communications across all marketing channels. However, personalization is much more than just an effective marketing tactic. Companies are using personalization to customize individual sales channels, offer personalized pricing or to create truly unique guest experiences — and they're seeing the results in their bottom line.
According to the HBR report, nine out of 10 customers are expecting authentic personalization from the companies they interact with, but what does it really take to make it work?
Maintaining Trust in the Era of Personalization
Before adopting personalization as a core strategy, organizations must take the necessary steps to protect customer trust in their brands. The majority of executives surveyed by HBR (92%) strongly agree that customer trust in their brand and products is their greatest asset and has influenced changes to their personalization strategies - even more than regulations such as GDPR.
Maintain customer trust in your brand by taking one step back and thinking about your customer segments as individuals. Think: if I were this person, how would this make me feel? What's the benefit? If you always start with the customer in mind, it's easy to craft a personalization strategy that offers customer segments more value and better experiences with your brand.
To further refine your strategy, keep an eye on competitors' approaches to personalization while also looking for lessons from companies outside of your vertical. When you take off your business hat, pay attention to how the companies you do business with are personalizing your experience as a consumer.
Developing a 360-View
About half of respondents surveyed by HBR indicate that they rely solely on internal data to inform their personalization strategies, but combining those insights with third-party sources creates a more holistic picture of what key customer segments are looking for. Companies looking to appeal to existing customers should determine how they interact with the brand and build personas documenting the customer journey to understand what motivates their decisions. When aiming to attract new customers, organizations can use anonymized, aggregated data insights to learn more about their needs and preferences. Customer surveys are a popular way to gather the data and insights necessary for personalization since they add more context around specific pain points and moments within the customer lifecycle. Industry benchmarking can also shed light on customer segments beyond your organization.
Connect the Dots Across Channels
While integrating personalization in an omnichannel environment may seem challenging, in reality, it's already becoming the norm for companies that adopt personalization as a core business strategy. In fact, eight in 10 executives surveyed by HBR say personalization is important to their organization's strategy — and more than half say it's an important driver of revenue and profits. This underscores the importance of customizing a product, service, or experience to different customer segments and developing a greater understanding of which platforms these customer segments are using to enter your ecosystem.
Maximizing the return on investment of personalization means uncovering steps within the customer's journey where a tailored customer experience could generate significant returns. For example, e-commerce companies routinely send emails with personal recommendations based on customers' recent browsing activity, sometimes within hours of leaving the site. Add in personalized pricing and offers that align with past purchases, and you create a better experience for your customer from start to finish.
In an increasingly crowded and competitive marketplace, personalization really does matter. Refining the way you apply it to maximize ROI requires a commitment to delivering benefits for the customer at every stage of the journey — regardless of the channel they use to interact with your brand. While many companies use personalization to great effect, there's still a lot to learn about using it correctly.
Read the full HBR report: "The Age of Personalization: Crafting a Finer Edge," to learn more about how how leading organizations use personalization to drive business impact.
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