Finding the sweet spot of personalisation

Customer-centricity remains the avowed goal for many marketers, whether they stick to their pledge in tough economic conditions or not. Of course, being customer-centric encompasses a lot, from customer service to pricing.

But in the digital era, personalisation is often talked about as a prerequisite of customer-centricity; the idea that unless an online retailer, for example, understands a shopper’s interests and then tailors their comms accordingly, that customer will be either actively nonplussed or simply less likely to convert when they land on the website.

Indeed, in Econsultancy’s digital and marketing trends for 2024, one of our trends is titled “customers are more than a conversion” and we discuss the connection between long-term loyalty and customer engagement, including the increasing sophistication of CRM platforms and loyalty programmes. The authors write, “the future of CRM is not necessarily segments of one, but there is a middle ground of impactful content storytelling – getting customers to help shape their interests and CRM preferences.”

The strategic importance of understanding customer preferences is shown by the success of McDonald’s growing loyalty programme, for example, with CEO Chris Kempczinski recently stating that it will help the restaurant chain in “optimising price while limiting customer resistance”.

Hyper-personalisation vs. gut feel

With rising privacy concerns and new frameworks, creating relevant and effective personalisation is not easy – especially given that in Econsultancy and Adobe’s 2023 research, 46% of respondents said they do not have access to vital real-time data to make experiences personal.

Speaking to Econsultancy, Mark Zablan, CEO at customer engagement platform Emplifi, says that “[where] many brands are getting this wrong is through not having a unified view of up-to-date data from all customer touchpoints.

“Brands need to better understand customer behaviours (including purchasing choices), see how they differ, and decide where and when to use personalised content to increase conversions,” Zablan adds, maintaining that “personalised customer experiences are not a nice-to-have, but an absolute must-have.”

Teams [are often] drowning in so much data they lose sight of innovation, settling for incremental improvements they call personalisation…

 

– Julius Kontiola, Kallan & Co

Zablan’s point about determining “where and when” to personalise is vital, and speaks to the often polarised nature of the debate around personalisation.

Julius Kontiola, Lead Strategist & Head of Experience Strategy at Kallan & Co, adds some perspective – “Teams, and even entire companies, often find themselves in one of two camps: some drowning in so much data they lose sight of innovation, settling for incremental improvements they call personalisation; others relying solely on gut instincts, struggling to connect with the very people they aim to impress – users, clients, employees, and other stakeholders.

“Usually,” says Kontiola, “the sweet spot lies in neither trying to hyper-personalise every interaction nor relying solely on big data averages. Instead, many would be better off by deeply engaging with 10-20 individuals from their target audience. Observe how they interact with your product or service. Don’t just rely on research agencies for insight reports; get your hands dirty. From there, build a robust hypothesis on what enhancements would truly set you apart and deliver unique value to these individuals. If necessary, validate these insights with broader data.”

Customer experience requires consistency

How best to personalise customer messaging is ultimately just one small part of a customer’s experience, and many companies are failing to deliver consistent experiences in the round, according to Nick Delis, SVP International and Strategic Sales at Five9, a contact-centre-as-a-service provider.

Retail returns, for example, can “sour an otherwise positive online experience,” according to Delis, “particularly when consumers have to go to a post office to return an item when the very reason for shopping online in the first place is to avoid crowds.

“We’re also seeing “retail ghosting” become more of a trend, whereby a brand ignores feedback, reviews, and questions from customers – resulting in huge losses and opportunities for great CX in the industry.

“Making customers feel valued begins with communication that is tailored and personalised to them, achieved through loyalty programmes in addition to timely and helpful responses to queries. A loyal customer base with longevity is built from great experiences that are consistent, thoughtful, and always keep consumers top of mind.”

Making personalisation happen

While cloud data warehouses and composable martech are allowing marketers to aggregate data with new-found flexibility, the reality is that many businesses do not yet have the right skills to experiment with personalisation.

CRM functionality is under-utilised and businesses that have yet to integrate data sources cannot take full advantage.

Improving execution capability may involve educating wider teams and making the case for personalisation.

At Movable Ink’s 2023 Think Summit in London, Rachael Thornton, Head of CRM for Boden, talked about “bringing the brand, and the creative team and the product team along on the journey with us, and really convincing them of the power of personalisation.”

The clothing brand has had success with pushing preferred categories, with personalised email not always winning on click-through rate, but delivering “a conversion uplift of around 30%” and making the channel much more efficient.

If personalisation can be shown to be a win-win, benefitting both customer and marketer, without leading to businesses getting lost in the weeds of short-term incremental uplifts, that would seem to be a good starting point for defining personalisation’s sweet spot.