The single most important factor of customer experience is personalization. Whether it’s a b2b, b2c, or any type of industry, customers expect to buy not what they already know, but what they can feel. When you feel understood, you immediately put your trust in the brand you’re buying from, with both your eyes closed. So it’s no surprise that business owners go above and beyond to make sure every one of their customers feels unique and valued.
The good news is that personalized customer experience doesn’t have to be elusive. With data-driven insights into user behavior available now more than ever, businesses of all sizes can easily make 1:1 connections with their customers – something that was once thought only possible for large corporations.
How data can improve the customer experience
When you understand your customers, you know what they like, and what they don’t like and it helps you tailor your services accordingly.
According to a recent study by McKinsey & Company, personalized experiences can increase customer engagement by 80% and sales by up to 20%. And it’s no wonder why. Consumers want to feel like they’re more than just a number. They want to feel like businesses understand their individual needs and preferences. And data is the key to making that happen. Businesses can use data in a variety of ways to improve the customer experience.
Better understand your customers’ pains
When you have a problem with a product or service, the last thing you want to do is jump through hoops to get it fixed. So by analyzing customer feedback and support tickets, businesses can identify common pain points and address them proactively. For example, a software company might send customers a personalized email with a solution to a common problem that they’ve been experiencing.
This shows customers that the business is listening to their needs and concerns, and it can lead to a more positive customer experience overall.
Personalize your targeted marketing campaigns
No one likes to see irrelevant ads. But when you see ads for products and services that you’re interested in, it’s a whole different story. That’s the power of targeted marketing campaigns.
By analyzing customer data, businesses can identify specific segments of their customer base and tailor their marketing messages accordingly. For example, a clothing retailer might target customers who have recently viewed maternity clothes with ads for maternity dresses and baby products.
This means that customers are more likely to see ads and promotions that are relevant to their interests, which leads to higher conversion rates.
Improve product/service recommendations:
Imagine walking into a store and being greeted by a salesperson who knows exactly what you’re looking for. That’s the kind of experience that personalized product recommendations can create.
By tracking customer interactions and purchase history, businesses can recommend products and services that customers are likely to be interested in. A streaming service might recommend movies and TV shows to customers based on their viewing history.
What makes a good CX strategy?
Customer experience (CX) is the sum of all the interactions a customer has with a company, from the first time they become aware of the brand to the last time they interact with it. A good CX strategy focuses on creating positive and memorable experiences for customers at every touchpoint.
Here are some of the key elements of a good CX strategy:
Customer-centric: A good CX strategy puts the customer at the heart of everything the company does. This means understanding the customer’s needs, wants, and expectations, and designing experiences around those. Disney is known for its world-class customer experience. The company has a team of over 60,000 “cast members” who are trained to go above and beyond to make sure that every guest has a magical experience.
Omnichannel: The customer journey is no longer linear. Customers expect to be able to interact with companies on any channel, at any time. A good CX strategy makes it easy for customers to switch between channels and continue their experience where they left off.
Employee-focused: Employees are the front line of the customer experience so creating a great customer experience always starts by creating an even greater employee experience by providing them with all the training and resources they need.
Types of Customer Data to be Used for Personalization
To get started with data for personalization, you first need to understand the types of data points you can use to create an audience and personalize.
Demographic data
Your customers’ demographic data provides a snapshot of their background, including age, gender, location, income level, and education. When you have that information handy, you start to understand your customer’s preferences and lifestyle, allowing you to better segment your audience. For instance, knowing that 72% of online shoppers are millennials can help you craft marketing campaigns that resonate with their unique preferences and habits.
Behavioral Data:
This type of data tells a real-time story of how your customers interact with your brand. It includes website browsing history, purchase history, product reviews, social media engagement, and more.
According to a study by Accenture, 91% of consumers are more likely to shop with brands that provide relevant recommendations and offers. So by analyzing their preferences, habits, and what makes them tick, you can pinpoint those customers who are most likely to be interested in specific products or services.
Engagement Data
This shows how your customers engage with your brand across the various touchpoints.
Some common examples of engagement data include:
- How often do your customers like, share, or reply to your posts on social media?
- Total website visits
- User flow
- Clickthrough rate
- Email opens, forwards, and bounce rate
Attitudinal data
There’s no simpler way of getting to know your customers than by just asking them questions. Attitudinal data is directly gathered through customer feedback, surveys, social media comments, and online reviews. While the previous types of data are more objective, getting a first-hand opinion about what customers think helps you understand their sentiment, so you can identify areas for improvement and make necessary adjustments accordingly.
Measuring Your Customer Experience ROI
So, you’ve invested in creating personalized experiences for your customers. But the question remains: how do you measure the return on investment (ROI) of your customer experience (CX) initiatives?
While CX is undoubtedly influenced by subjective factors like emotions and perceptions, there are concrete steps to quantify its impact on your bottom line.
1. Set clear goals and objectives.
What do you want to achieve with your CX initiatives? Do you want to increase customer satisfaction, retention, or lifetime value? Once you know your goals, you can start to track the right metrics.
2. Track key performance indicators (KPIs).
KPIs are quantifiable metrics that can be used to measure the progress of your CX initiatives. Some common CX KPIs include:
- Customer satisfaction (CSAT) scores
- Net promoter score (NPS)
- Customer churn rate
- Customer lifetime value (CLV)
- Average order value (AOV)
3. Use a combination of metrics.
No single metric can capture the full impact of your CX efforts. Instead, use a combination of metrics to get a more holistic view of your CX ROI.
4. Compare your results to industry benchmarks.
This can help you see how your CX performance compares to other companies in your industry.
5. Use data analytics to identify trends and patterns.
Data analytics can help you identify correlations between your CX efforts and your business outcomes.
When you put your customers first, it shows. You pay attention to their feedback, both positive and negative, and you use it to improve your offerings. You don’t just sell them what you want them to buy; you sell them what they need and want – and that is the one thing that sets apart a good CX strategy from a great one.
Reference:
- McKinsey & Company. “The ‘how’ behind the numbers: Unlocking customer satisfaction and loyalty.” Link to McKinsey & Company Study
