Personalization is something that seems so easy. However, most of us are still getting it wrong.
The Next in Personalization 2021 Report by McKinsey reveals that companies who excel at demonstrating customer intimacy and personalization generate faster rates of revenue growth than their peers. And the closer organizations get to the consumer, the bigger the gains.
I don’t know about you, but after the last couple of years, I’m definitely interested in bigger gains. Read on for more on the report and how your brand can get personal in 2022 and beyond.
Personalization Matters More Than Ever
During the pandemic, and over the last 18 to 24 months, roughly 75% of consumers tried a new shopping behavior. Furthermore, more than 80% of those intend to continue with new behaviors. Because of this, brands emerging as leaders in personalization tailor their offerings and outreach to the right individual at the right moment with the right experiences.
The report from McKinsey highlights key ways in which personalization matters more than ever:
- Their research shows that 71% of consumers expect companies to deliver personalized interactions. And, when that doesn’t happen, 76% get frustrated. Bottom line: If consumers don’t like the experience they receive from your brand, it’s easier than ever for them to choose something different.
- 72% of consumers in the McKinsey study said they expect the businesses they buy from to recognize them as individuals and know their interests. When asked to define personalization, consumers associate it with positive experiences of being made to feel special. The experiences were listed as touchpoints such as checking in post-purchase, sending a how-to video, or asking consumers to write a review.
- The report also shows that personalization is especially effective at driving repeat engagement and loyalty over time. Recurring interactions create more data from which brands can design ever-more relevant experiences and generate strong, long-term customer lifetime value and loyalty.
- The more skillful a company becomes in applying data (including social intelligence) to grow customer knowledge and intimacy, the greater the returns.
- The brands leading the charge in personalization also have better customer outcomes. Their focus on the relationship and long-term value leads to better retention and loyalty.
[source: Next in Personalization 2021 Report]
The research suggests that even small shifts in improving customer intimacy create competitive advantage—and these benefits grow with maturity.
So, how can you get personal?
Recognize Individuals & Their Interests
Show your commitment to the relationship and not just the transaction. Think about your own customer experience (CX) strategy. Do your touchpoints along the digital customer journey go the extra mile? Do you do things like…
- Check-in with the customer post-purchase?
- Send a how-to video for product issues?
- Ask consumers to write reviews?
Conversely, three-quarters of consumers switched to a new store, product, or buying method during the pandemic. So while focusing on CX seems easy, consumer satisfaction is waning. One reason for this is highlighted in this Harvard Business Review post. In part, it says…
In this environment, even the most well-intended employees can forget that customers are their organization’s lifeblood. Internal teams are more likely to double down on their own metrics and agendas. In the short term, this puts the organization at risk for silos. In the long term, an organization without a clear sight line to customers is at risk of being out-innovated and eventually becoming irrelevant. One need look no further than Sears, Blockbuster or Monster.com to see what happens when an organization loses their tether to customers.”
Moreover, the HBR article goes on to give three ways in which teams can be more customer-focused.
- Get granular. Instead of saying, “our customers are counting on us to deliver!”, try: “Plumbers Supply Co is counting on us to fill their pipeline in Q1. Without our paid leads, they won’t be able to keep spending on paid media.”
- Next, include customer impact in your own company’s decision-making. This is as easy as asking, “how will this impact our customers?“, as you make your own critical selections.
- Think Conversation (our favorite!). As in, talk to your customers! When is the last time you did this? We strive to make this happen quarterly, and it truly makes a difference.
And, if you’re using social media marketing to talk with your current and would-be customers, you should be gathering social intelligence to ensure a better connection. Ultimately, social media provides power to customers by allowing them to control their own digital journey. It also means they’re not limited to just being reactive when there are issues. Social media means customers can proactively reach out via any channel at any time with questions or concerns.
Using social media data, or social intelligence, allows you to provide a truly valuable experience. Better personalization means gathering insights about how customers are feeling, and then using that information as a way to nudge their journey towards connection, conversation, and conversion.
Growth = DO BETTER
Are you starting to see a common theme here? The businesses that truly have customer-centric strategies are outperforming those that don’t, and using personalization is a surefire way to both acquire and retain customers.
We have more choices than ever. It’s crucial that teams understand who your customers are and how you serve them. Personalization does not have to be difficult, but it does require effort. So, who’s game for doing better this year?
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