One of the biggest mistakes that businesses can make is treating customers as transactional pawns rather than building brand-customer relationships. Beyond potential sales, companies need to recognize that buyers prefer to be noticed rather than lost in the sea of consumers.
By providing a personalized customer experience, retailers can recognize and address each consumer's priorities to prove that they value every shopper.
The Psychology Behind a Personalized Customer Experience
Many businesses strive to provide personalized customer experiences, but few understand how and why it is so impactful. Studies show that 93% of companies that implemented a personalization strategy saw significant revenue growth. This is because 31% of retail customers say they wished their shopping experience was more personalized.
The answer is within a psychological principle called the Cocktail Party Effect. The theory was developed by Cognitive scientist Colin Cherry in the 1950s. Cherry found that people categorize overlapping conversations and ignore what is irrelevant to them. In other words, people tend to focus on information that is highly relevant to themselves.
Another study, by Brain Research, found that this is why people experience the tuning in effect when they hear their name. This is why marketing emails and promotions sent directly to customers begin with their name.
However, businesses can't keep the user's attention if the rest of the message is impersonal.
Retailers need to present personalized content based on retained customer data, such as items similar to those in their purchase history. Accenture found that 58% of customers prefer to purchase from a retailer that makes recommendations based on their previous buys.
Therefore, when a company is able to tailor its content and marketing campaign to individual customers, it can increase sales and retention.
8 Tips for Creating a Personalized Customer Experience
Whether or not they realize, many companies already have the means to create a personalized customer experience, they just need to be creative. Several ways to begin or enhance customized experiences are-
1. Encourage Customers to Create Accounts
In order to even begin creating relevant content, businesses need access to accurate customer data. By promoting the convenience of customer accounts, management can encourage buyers to create user profiles that track their interests, disinterests, purchase histories, and shopping carts.
This information allows marketing teams to send personal emails and messages with product recommendations based on the customer's sales trends. In return, retailers can experience a significant drive in sales. A study shows that up to 35% of Amazon purchases are prompted by customized recommendations.
However, companies need to ensure that creating an account is fast and simple, or else customers may be dissuaded from creating a profile.
2. Segment Promotions Based on the Consumer
Regardless of whether a company chooses to launch personal emails or social media ads, they must segment marketing campaigns based on buyer personas. For example, automated emails need to be grouped into subscriber types based on their likes and purchase histories, so each customer is only sent relevant content.
While all subscribers may be interested in the same brand, they should not be sent recommendations for specific product variances. Therefore, male subscribers would not be sent promotions on women's apparel. Sending irrelevant information could lead to customers unsubscribing to emails or deleting their profiles.
3. Retain Customer Information
Companies need to design their customer accounts to provide the most convenient shopping experience. This means that users should only have to input their personal, billing, and shipping information once.
After the initial purchase, this data should be automatically saved to their account to streamline future transactions. Customers should also be able to access their accounts from various sales channels so that they can make purchases in-store, online, or via a mobile device.
4. Implement Customer Geotargeting
The customers' location is useful information that allows marketers to customize promotions and sales channels based on the buyer's region.
For example, retailers that offer products to consumers worldwide tailor their online store based on the visitor's location. This means people from America would see measurements in the United States customary unit system (USCS), while people in England would see the metric system.
Geotargeting also helps enhance marketing schemes by generating local customers and customizing promotions based on a region's weather, holiday, and culture.
5. Consider Customer Feedback
A study shows that 68% of consumers abandon a company because they feel neglected. Therefore, management needs to consider all customer feedback, reviews, and ratings to enhance customer experience and satisfaction.
Aside from product reviews, businesses should ask customers for feedback on their in-store and online shopping experience, and how they feel it could be improved. Management should carefully weigh customers' input against the efficiency of their internal processes before implementing any permanent changes.
However, if an overwhelming number of buyers are complaining about similar elements, changes should be made to improve both internal systems and customer relationships.
6. Engage the Customers
It is important that businesses implement interactive elements on their e-commerce site so customers without an account can still have a personalized experience.
Many companies create short quizzes and questionnaires that provide visitors with product recommendations based on their responses. For example, Fabletics asks visitors questions on their exercise routine and style to provide the apparel that best fits their needs.
7. Know When to be Informal
While it is a good practice to formally introduce consumers to a brand, maintaining a formal tone can make it challenging to build a relationship with customers.
Therefore, businesses should communicate using personal pronouns, so customers feel like they are talking to a peer, rather than an entity. This can help returning visitors feel at ease and more welcome.
8. Customize Emails
Creating relevant content is sometimes not enough to attract customers. Marketing emails should address the recipient by name and have an engaging subject line that intrigues the reader enough to open the message, rather than regarding it as junk mail.
While it is unfeasible to hand-write each email, messages should seem personable and not autogenerated. Therefore, marketing teams should test different writing styles to determine which engages the audience the best.
Research has shown that brand preference is affected by more than just the lowest prices, with customer experience being a key factor. This has created another competitive element among industries, making it essential to offer a personalized customer experience.