Since customer experience has risen to be one of the most prominent factors in any business in the last few years, personalized customer experience has become a ‘must-have’ from ‘better to have. Leaders started talking about personalization and its relevance, but are they doing it rightly?

The personalized experience sometimes won't appear explicitly, and customers won't know that they get a personalized experience; instead, they gradually become connected to the brand and become loyal customers over time.

But, some minor mistakes in the customer personalization strategy from the brand side can go wrong. Because, in the personalized customer experience, a customer gets a unique experience specifically for them. If something goes wrong or they don't get what they expect, they will leave you.

So, take the right initiatives to personalize the customer experience with the tips in this article.

What is Personalized Customer Experience?

A personalized customer experience is empowering a customer’s experience by offering your product or service, fine-tuning customer journey, and curating the communication, messages, and content they see according to their shopping behavior and history of communication.

Customer experience practices are not a ‘one size fits all process; they should be customized, relevant, and contextual to each indivisible customer. That is what makes a customer get an experience that satisfies their unique traits and preferences.

Why is Personalized Customer Experience Crucial?

benefits of Personalized Customer Experience

Personalization is not just meant to keep customers happy and satisfied. It can significantly contribute to your business's bottom line in many ways.

1. Improves Customer Retention and Loyalty

Shep Hyken, CAO (Chief Amazement Officer), Shepard Presentations, LLC, stated that loyalty is the “Holy Grail” of personalized customer experience, as 44% of customers reported that they repeat business with a brand if they get a personalized customer experience.

With curated, personalized experiences, brands can benefit from higher customer loyalty, increased retention, and customer lifetime value (CLV). Undoubtedly, all these positive returns will result in a great business bottom line.

For example, Amazon suggests books in the same genre we bought before, Netflix recommends the movies we would like to watch, Spotify’s personalized song suggestions, etc. This increased their subscription count and customer satisfaction, and when customers get personalized experiences, they are comfortable with your products and services.

2. Leads to Higher Purchases

According to a Forbes article, 49% of customers buy products from brands’ suggestions and recommendations they did not intend to purchase. For example, when a customer buys Christmas stars in early December, he might be looking for Christmas decorations for their home.

When you suggest more decorating options as suggestions, they will have a look at them and buy them even though they did not intend to buy them that day. This increases the Average Order Value (AOV). So pushing customized recommendations and suggestions will lead to more sales and impulse customer purchases.

3. Elevates Conversion Rate

Delivering personalized customer experiences converts more sales without any doubt. If customers feel they get what they are precisely looking for and sometimes exceed their expectations, they will buy it without any doubt.

Also, studies revealed that people are ready to spend more and spend on expensive products from where they get personalized customer experiences. So, deliver personalized experiences and personalized shopping experiences in customer journeys to make a first-time buyer into a loyal customer and get a sustainable competitive advantage.

Customer satisfaction through personal customer service and experience is a great way to elevate the conversion rate. It organically builds your business's bottom line with more loyal customers and establishes your brand in the marketplace.

4. Gives a Competitive Edge

Customers have endless options in the marketplace. They can quickly switch from one brand to another and abruptly stop doing business with a brand without any second thought.

But, when they get a personalized customer experience from a specific brand, which satisfies all their needs and preferences in all phases, they will choose that brand over any other options. And the word-of-mouth they share will be your brand's most powerful marketing weapon.

As per a Forrester study, 77% of customers have opted, recommended, and spent more for a brand that provided them with personalized customer service and experience.

10 Tips for a Personalized Customer Experience

Many companies limit the personalization process by simply segmenting customers based on their purchase details and putting them into a customer persona they should not belong to.

For example, if a customer buys a crib, brands assume that he is a baby's father and might like more toys and push suggestions for other baby products. What if the customer buys it as a gift to his neighbor's kid? This kind of personalization is irrelevant to that customers and won't convert in the future.

So initiating personalization blindly and aggressively is a waste of time and cost. It should be done systematically and strategically with proper research on your customers and a niche market. Check the below tips to get a clear idea of that.

10 Tips for a Personalized Customer Experience

1. Listen to Customer Feedback

Customer feedback is an excellent source for your personalization strategy. Here, you get the raw customer opinions driven by their emotions and reactions to the product or service you offer.

Training your employees to capture customer feedback by asking customers at the right time and through the right channel will help get the customer's opinions with exact emotions.

For example, you can ask for feedback after a live chat, after resolving a CRM ticket, or after a purchase. 

You can go through them and understand the essence of the content they provide. Based on that, you can categorize them into different groups—for example, feedback related to customer service, website speed, delay in delivery, etc.

So you can take groups individually and resolve them on a priority basis. And you can categorize them based on emotions like positive or negative.

If the feedback is negative, you need to understand the pain points and friction in their experience and find measures to improve that area. Checking positive feedback will help you know your vital areas and keep continuing and making improvements that help you gather more loyal customers.

Furthermore, the customer service team can resolve individual customer issues precisely according to the urgency and seriousness of a customer’s situation. This kind of personalization will improve customers’ trust in you.

Analyzing the overall customer emotion on the reviews helps you decide and redesign your overall customer experience strategy.

2. Micro Segment your Target Audience

As I have already mentioned, customer segmentation based on their one-time purchase can’t help to decide if a specific customer belongs to a particular category.

So segmentation won't always work. What we need in today's world is micro-segmentation. You need to check the customer's purchase history for a specific period, their demographic details, how much they are willing to spend, what kind of products they have been shopping for in the last few months, etc. Based on that, you need to understand what this specific customer needs.

For example, suppose you see a customer has bought sports shoes and sportswear for the last six months, and all their purchases are related to sports. They buy for themselves and spend x amount of money on an average basis; in that case, you can assume that this person will buy more sports items in the future.

Customer data and insights should play a significant role here. You can determine which sports this person is into based on the type of products the person buys. Then you can push recommendations and suggestions of related products to this user.

So, simply categorizing customers into broad personas will generate a group of dissatisfied customers. Because each person is unique, one person's top priority on a product might be the third priority for the other one in the same persona. Mirco segmentation will help differentiate each customer's very minute preferences and pain points and help curate the experience for that specific customer exclusively.

3. Provide Customized Communication

Customers like to interact personally rather than with very formal communication. It will improve the conversion rate and more sales if they can connect with a brand with a human touch.

To ensure the communications are customized per each customer, the customer service reps and all front-liners should understand the tone and pitch of a customer conversation and use it in the brand’s communications side.

For example, some customers like short conversations like one or two-line chat, others like to explain their issues in detail, and they prefer audio or video calls to explain their concerns. You can easily integrate these functions in your apps using external in-app chat APIs or video chat APIs.

The brand should patiently listen to all customer issues and concerns and provide the solution they are asking for. This helps to build confidence in customers to do business with your brand.

Providing custom product recommendations and suggesting a product will help in enhancing your personalized customer experience system. Additionally, sending follow-up messages after a purchase or service assistance will make the customers feel that your brand values them as potential customers.

4. Include Customers to be a Part of the Personalization Process

Participating in personalized customer experience initiatives will significantly boost the entire personalization process. When you offer tailored communication to customers, they will become loyal customers as they feel they get a product or service according to their choices from your brand.

Combining these experiences with personalized interaction moments will enhance the experience to the next level. For instance, the 'Try it On' option of Maybelline is an excellent example of participating customers in the personalization process. They allow customers to try a makeup product virtually before making a purchase. This helps customers choose a product based on their skin tone and preferred color of customers.

Incorporating the right technologies like VR, ML, and AI will help in this.

5. Ensure Consistent and Connected Experience through Omnichannel

To deliver a consistent experience, you must be available for customers whenever they need your help and assistance. It should be through all channels they try to connect you.

If a customer connects with you through submitting a CRM ticket, and the next time they ask for an update on Facebook messenger, you should not act like you don’t know the person, even if both channels are handled by different people. Similarly, CRM tickets may be handled by multiple support agents as per the emergency and issues of a specific customer.

Customers should not feel disconnected if more than one person is involved in support assistance and communication. In such cases, you should adopt a single platform where the customer communication from all the channels, like social media platforms, SMS, CRM, live chat, customer feedback, etc., are gathered and synced in one place. This will ensure connected and synced communication across multi-channels.

Being available 24/7 across all channels for customers will also improve their trust in you. If this is impossible, you can even integrate an AI-integrated chatbot to serve customers when no staff is available. Try to understand which channel experiences more traffic from customers and put an extra focus on such channels.

6. Be Relevant and Contextual

As per a Gartner survey with 2,500 customers, 38% will stop doing business with, and more than half will unsubscribe from a brand if they feel the highly personalized customer experiences a brand offers are "creepy!"

Nobody wants recommendations of products that are meant for people “like them”; they want recommendations that are precisely based on their interests.

Amazon is an excellent example of providing relevant, contextual, and personalized customer experience practices. Amazon never sends an irrelevant product recommendation to a customer; they always tap into the customer journey and their buying behavior in the current and past period and understand what they will require as an individual, not as a person belonging to a specific segment. This helped Amazon as a brand to gather higher customer loyalty and increase Customer Lifetime Value.

Regarding contextual customer support, digital customer engagement tools can provide accurate and real-time customer responses. An AI-integrated live chatbot can assist customers in real time with personalized service. For example, technology like co-browsing allows you to collaborate and help customers with real-time problems like complex form-filling, finding products, etc. A video chat and voice assistance with real humans will take this experience to the next level.

Simply leaving a live chat with pre-set solutions and posting hundreds of FAQs on a static page may not always work. Some customers might ask queries, and others might connect you for emergency help. Understanding the context and acting upon them will elevate the personalization you offer.

7. Tap on Customer Data and Insights

Data is one of the essential factors in the customization process. Because without knowing the details of the customer journey and customer requirements, how can we design an experience they will like? But many customers are concerned about privacy while sharing their personal data. But, if the brand ensures a personalized customer experience in return, they are ready to share its data.

To understand customers in detail, you need to gather primary demographic data, customer feedback, reviews, chat history, calls, CRM tickets, etc.

When you capture data, ensure they are unbiased, reliable, and accurate. Because biased or incorrect data will create inefficient insights and lead leaders to make distorted decisions.

Also, cover all data such as external, private enterprise data, data from CRM, social media, live chat, etc., and transactional and behavior data. Ensure you got data from the first party, third party, and all unstructured and structured data.

Because if you miss some part of the data, it will be like missing a piece in the jigsaw. You need all data to get the complete picture of your customer's experience. Then you can understand the customer segments and personas at the micro level and offer more personalized customer experiences for them.

Gathering these details from multiple sources, analyzing them, and converting them into actionable insights allows you to better understand the overall omnichannel customer experience and take relevant personalization decisions accordingly. To give the hyper-personalization, better if you enroll in any AI-integrated customer experience analytics system where you can get comprehensive and profound actionable insights from the data collected from multiple sources.

And these customer insights will be beneficial in the personalized marketing campaign to attract new customers.

8. Encourage Customer Service Employees to Personalize Experience

Employees, especially customer service teams, are the humans who directly interact in the customer journey through different customer service channels. How they interact with customers is equal to how the company treats them. So the front liners are present there on behalf of the company itself.

Encouraging and training employees to handle customers in a personalized method is essential. The best way to encourage them is by giving them authority, allowing them to access customer service, and decision-making power to handle customers independently. This will motivate employees to handle more customers in a personalized manner across all channels. You can measure the performance of employees by checking the customer feedback they got for their service and the number of issues they resolved in a certain period.

Assigning the same representative to handle a specific customer will also help establish a connection with the customers, and they will feel free to communicate with the representative.

By doing this, the employee can understand their conversation's pain points, tone, slang, and emotions. In this way, you can curate a personalized experience for them. Furthermore, the employees can encourage customers to self-service to resolve their issues.

Ritz-Carlton is a famous company that encourages employees to offer personalized customer experiences by granting them the full authority to handle their customers. They offer $2000 for their employees to spend daily to delight their guests with personalized and delightful customer service.

9. The Effective Utilization of AI and Technology in Personalization

AI, NLP, and machine learning help in offering a more personalized customer experience based on “real-time” data, not based on the data from a 30 minutes ago interaction. We know that chatbots can’t deliver fully personalized customer experiences. Yet, advanced systems that are up-to-date with the current technology can be used to provide personalized customer experiences like real-time customer assistance.

For example, based on the customers’ current browsing and navigating pages on your website, you can use a chatbot to give suggestions and help them find their products. Also, help them with answers and quick solutions to their queries.

Furthermore, providing robust and AI-integrated self-service portals will be an added advantage.

10. Automate Your Customer Experience

Implementing an AI and NLP-driven live chatbot can help automate your customer experience.

Chatbots generate a 30 - 40% response rate and can elevate it up to 80 - 90% customer engagement.

An advanced chatbot can respond to customer queries with some personalization, like mentioning the customer’s name and other details in the conversation. If you have fed frequently raised complaints and questions and their solution in the backend of the chatbot, it can provide the answers within seconds to the customers. This improves customer satisfaction.

Also, these chatbots will be available 24/7, unlike human presence. If a customer encounters any severe issues at midnight, a chatbot will help them!

These actions reduce friction in the customer’s journey and make the entire journey even smoother.

Furthermore, the chatbot can provide real-time assistance to customers, such as sharing information on-site in real-time, suggesting products, navigating to specific product pages, etc.

To Conclude,

Customer experience personalization is shifting into hyper-personalization and is becoming normalized as customers expect it from any brand by default. To ensure you offer personalized customer experiences to your customers, provide a unique customer experience to each customer with micro-segmentation.

Offer an experience consistently relevant and contextual to customers’ current status in the customer journey. And tap on customer data, insights, and technology and encourage your employees to deliver the hyper-personalized customer experience and provide self-service portals to your customers. So, personalize the customer experience from today and implement it in your company's marketing department to get new customer attention and delight existing customers.

Read more: How To Humanize Experience Using Technology and Customer Data?