Nearly 90% of online businesses now make personalization investments. Personalization's great promise may be realized later (at least not at scale), but it will be short. Soon, marketers will be able to create far more personalized and "human" experiences across moments, channels, and buying phases thanks to technology, data, and analytics developments. Reimagined physical environments will assist consumer journeys far beyond a company's front door.

What Is Personalized Customer Experience?

Personalized customer experience refers to the efforts made by a brand to provide an individualized experience to the customers by delivering solutions that cater to their unique needs and requirements. The custom offers are tailored to empower customers with distinct solutions that add value and quality to their lives.

Why is Personalized Experience so important?

Personalization is at the top of every forward-thinking brand's priority list regarding delivering a superior customer experience. Best-in-class customer care is increasingly based on personalization. 

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1. To Generate Consumer Demand

While 42% of customers find impersonalized information annoying, 80% of consumers are more inclined to make a purchase from a business that offers a personalized experience. Consumers prefer individualized experiences by a wide margin. Gen Z and millennials are digital natives who have become accustomed to personalized recommendations and information. You risk losing these priceless clients if you don't provide individualized experiences.

Businesses need to concentrate on providing personalization at scale as the number of Gen Z consumers increases. Although it's a complex task, it is getting more critical as more consumers enter the market.

2. To Develop Loyalty and Customer Lifetime Value

70% of customers claim that their loyalty to a brand is influenced by how effectively it comprehends their particular demands. When done correctly, personalization increases client lifetime value and loyalty. Engagement and conversion rates increase with personalization — successful customization results in higher business engagement and conversion rates. The key is personalizing in a way that appeals to clients' sense of relevance and utility.

3. To Support Other Business Goals

It's crucial to remember that personalization is a critical habit that can support other business objectives rather than being a standalone initiative. Personalization can be helpful whether you're trying to boost sales or improve customer retention. Making an investment in personalization is a wise move that will benefit you in many ways.

4. To Increase Customer Retention & Reduce Churn

Personalization makes customers happy as they feel your brand cares about them. And with valid logic, it's true. If you provide personalized CX to the customers, you need to fulfill customers' requirements with a high level of care at every touch point. The activities that personalize the customer experience, such as training employees to face customers' issues with great care, making them feel comfortable, sending them custom-tailored messages, and many such, increase customer retention rates and reduce churn.

5. Increase Sales

With personalization, you can ensure that your customers are treated well at every stage. Personalized care, customer communication, and query resolution make them feel special, which increases sales. A brand can increase its margin with growing sales numbers to make more profit. And customers will be supportive enough of the raised prices as they already would love your brand and want to spend more on the individualized solutions your brand provides.

Examples of Personalized Customer Experiences

Here are 3 examples of personalized customer experience:

1) Amazon - Product Recommendations

Every Amazon customer is aware of the platform's product recommendations, and it's definitely super useful. Amazon uses Machine Learning (ML) to generate personalized suggestions through websites, applications, email marketing systems, and more.

2) Spotify - Customized Listening

Spotify custom-tailors the listening experiences for its customers by providing relevant recommendations. To personalize, Spotify also uses Machine Learning (ML) technology. Customers are given suggestions for songs, podcasts, and shows of their preferred taste.

3) Grammarly - Weekly Progress Updates

Grammarly shares individualized weekly progress reports with its users to improve their writing experience. The report includes the statistics, achievements, and mistakes a particular user makes. These personalized progress reports motivate users and, at the same time, help to improve their writing skills.

How To Create Personalized Customer Experience Using Data Analytics?

Spotify, Amazon, and Netflix are great examples of personalization. They comprehend consumer preferences sufficiently enough to anticipate what they would desire next. You probably enjoyed what came after what you just watched, read, or listened to. 

Companies may become problem-solving, time-saving, and effort-easing machines by exploiting customer data in this manner. Additionally, companies gain customer loyalty if they save them time and effort.

Automating and scaling customization is now possible thanks to various software alternatives. Now, successful brands must concentrate on the following:

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1. Invest in Customer Data and Analytics Foundations

Consumers expect brands to comprehend their unique needs, according to 66% of them. If marketers lack the tools to continuously understand the needs of high-value clients, personalization is impossible.

Therefore, great marketers create systems to analyze structured and unstructured data, algorithms that can spot customer propensity and behavioral trends, and analysis tools that can feed that data into simple dashboards. Delivering tailored experiences involves creating a single customer data platform (CDP) to combine paid and owned data from many sources.

A single customer can be connected across devices, cookies, and ad networks using CDPs, which are not available with traditional CRM solutions. Additionally, real-time campaign execution across touchpoints and channels is made possible by built-in machine-learning automation, which can also clean internal and external data. The most effective ones are simple to use.

Marketing and IT must collaborate to make this technological leap. To design and update the organization's martech roadmap, create use cases, monitor pilot results, and assemble a comprehensive library of standards and lessons learned, a product-management team should be formed with participation from IT and marketing.

2. Consider Translators and Advanced Tech Talent

It will take quite different skill sets from today's standard marketing operation to personalize environments, moments, and ecosystems. Marketing organizations will require analytics translators and data scientists, and engineers who can explain business objectives to IT stakeholders and data-driven results to the business.

The demand for these interpreters will grow as data becomes more complicated and personalized use cases become more sophisticated. In order to provide cutting-edge customization capabilities, attracting and training translator talent will be highly advantageous.

Retail marketers are employing AI-driven customization to the tune of 54%. The competition for AI talent will intensify, as expected. Leading businesses are making active moves to hire relevant talent, even though organizations must decide which skill to hire and which to access through an ecosystem of external talent.

More excellent training will be necessary to ensure that everyone within the business is aware of how to use new personalization tools and how they might aid in making better decisions. This will need to match the growth of relevant tech talent with improved training.

In order to effectively serve clients, this calls for training call center employees, sales representatives, and marketers, for instance, on how to use emotion and sentiment analysis tools. Rotation programs, which allow participants to train in a range of teams, will be crucial in spreading knowledge and enhancing organizational competence in essential areas.

3. Build Up Agile Capabilities

Traditional segregated marketing teams won't function because customization initiatives are iterative and cross-disciplinary in nature. Personalization instead necessitates dedication to agile management, incorporating cross-functional teams focused on certain client groups or journeys and equipped with quick execution capabilities.

The performance evaluation must progress in a similar manner and concentrate more on testing speed, success rates, and innovativeness. 

Professional success will depend on the capacity to interact and integrate knowledge and exhibit the necessary competence. The ability to cooperate and resolve issues with coworkers from many organizational departments, including IT, analytics, product development, and legal, will be equally crucial.

In order to evaluate current projects, plan new ones, and realign funds and resources in support of essential priorities, annual budgeting and planning procedures must also become more adaptable with frequent evaluations.

4. Automate Customer Experience Solutions

71% of people concur that automation has gained more importance with better C-suite support. Therefore, intelligent automation (IA) is the fusion of technologies, such as robotic process automation (RPA) and artificial intelligence (AI), to improve the efficiency of formerly labor-intensive customer service operations.

IA presents a significant investment for businesses to meet the growing demand for enhanced CX when used in conjunction with collaborative creativity. Once put into practice, IA gives businesses a chance to create more great CX that goes above and beyond what customers anticipate.

But finding an effective IA solution is more challenging than turning a switch. It's crucial to realize that when developing automated solutions to assist client interactions. Poor process design, premature technology adoption, and a shortage of contextual data necessary to comprehend customer needs almost invariably lead to this.

Once analytics tools and AI engines have been established, businesses may begin employing machine learning to identify user intent, language patterns, and the most pertinent content. They will be more successful because of this.

The AI should be able to start recommending the subsequent best actions to your front line in a co-pilot mode as it acquires more context.

5. Get Personal With Generation Z

Personalized items appeal to 74% of Gen Z consumers compared to 67% of Millennials, 61% of Gen Xers, and 57% of Baby Boomers. For Generation Z, personalization is essential. Consumers are getting more and more interested in personalization, regardless of age or gender.

Among other things, it saves the client a ton of time and effort when a business suggests something based on their prior purchases or interaction history.

Start by analyzing your data governance plan and privacy policies to gain their trust. Ensure that your consumers have expressly consented to the use of their data for personalization and take steps to protect it on their behalf. While Gen Z appreciates personalization, they won't be fond of a company that uses its data for its own gain.

6. Clustering Is Key

When it comes to personalization, quality should always come before quantity. Anyone who has ever received an internet advertisement for a completely unrelated product can speak to the dissatisfaction this can cause towards the offending company

Fortunately, organizations can meet consumers' expectations for accurate and frictionless content with the use of AI, machine learning, advanced data, and analytics.

By using AI and machine learning to quickly evaluate vast volumes of data, such as big data, brands can succeed greatly. This allows them to present their customers with pertinent recommendations and information based on historical customer behavior.

Building the skills required to obtain the necessary data, and produce category groupings and profiles of related people, known as clusters, is an essential initial step. Individuals' data, such as age, gender, annual income, and expenditure score, are used to generate groups.

It is simpler for businesses to focus the products, services better, and marketing materials they offer based on others' actions in the same cluster when they are aware of what customers in comparable groups prefer, have previously ordered, or may require.

7. Big Data Vs. Small Data

The issue with big data dependence is that it frequently necessitates an investment in sophisticated technologies and novel analytics tools, which can be too expensive for many businesses, especially startups.

In these circumstances, businesses should consider using easily accessible modest data collecting. Individual agents may gather this data during one-on-one conversations or chats and add it to a customer's profile.

Small data collection requires fully motivated agents who value the business and are committed to helping it enhance its services by outlining any patterns based on different conversations. To do this, businesses must promote an environment that values their workers and recognizes and rewards these admirable traits.

Despite their differences, big and small data techniques are synergistic, and neither excludes the other. Brands should try to use both to establish clusters as accurately as possible.

Final Thoughts

In order to achieve the entire set of capabilities required for true dynamic personalization—always-on, real-time, one-to-one communication across the consumer ecosystem—developing a personalization competency is a journey. Often, starting is the most challenging part. However, most businesses have more than enough data and resources to start seeing benefits right away.

In order to quickly test and discover which offers and interactions best deliver, the first step is to decide which use cases to focus on, for example - converting new customers and increasing the spending of loyal customers. With this practical method, people can quickly gain valuable experience and skills. 

Brands will be able to forge better and more genuine connections with customers, provide more individualized experiences, and ultimately increase brand engagement by prioritizing the collection of both big and little data and analyzing it to unearth actionable insights.

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