Report Next in Personalization 2021 This will unlock the secret that companies that do well at building strong relationships with customers will experience faster revenue growth than their competitors. And the closer it is to customers, the more the company will receive
Important points in the article:
- Personalization is becoming more important than ever, and Covid-19 and the rise of digital have helped raise that standard. 75% consumers switch to a new store, product or purchase method during this period
- 71% consumers expect businesses to provide them with personalized interactions. And the 76% was disappointed when that wasn't done
- Personalization helps bring better business efficiency, along with building relationships with customers. Companies with fast growth, 40% their revenue comes from personalization
Personalization is not only an important capability, but also plays a role in supporting the improvement of business efficiency of enterprises.
Personalization is not simply a desire of consumers, but a demand from them. As customer loyalty becomes increasingly difficult to capture, getting personalization right is even more important. Nearly 75% consumers have experimented with a new purchasing behavior in the past 18 months, and more than 80% plan to continue with that behavior
What's more, research shows that companies that excel at personalization generate 40% more revenue than their competitors. Across US industries, moving to be in the top 25% for personalization would create more than $1 trillion in value. Leaders in this space achieve results by tailoring services and reaching the right audience at the right time with the right experiences.
The 7 charts below show consumer attitudes towards personalization change and how companies are doing well to grow customer lifetime value at scale
The growing importance of personalization
The surge in online engagement since the pandemic has escalated expectations — giving consumers more exposure to the personalized approaches of e-commerce leaders and raising the bar for everyone else. From web to mobile and in-person interactions, consumers now see personalization as the default standard for engagement.
Our research shows 71% consumers expect companies to provide personalized interactions. And 76% felt disappointed when this did not happen. This also reduces the pressure on companies, if consumers don't like the experience they receive, it's easier than ever to choose something different. Three-quarters of consumers have switched to a new store, product or purchasing method during the pandemic.
Research shows that shoppers have strong views on personalization
72% said they expect that the business they choose to buy from will view them as individuals and know their preferences. When asked about their definition of personal harmony, consumers often refer to positive experiences that make them feel special. They respond very positively when brands show they are investing in the relationship, not just the transaction. Thoughtful touches like post-purchase inspections, sending instructional videos, or asking consumers to write reviews will create positive brand perceptions
…And they will “reward” those who do it right
More than three-quarters of consumers (76%) say that receiving personalized communications is a key factor in their consideration of a brand, and 78% says that similar content drives they make a purchase next time
Personalization is especially effective at driving repeat interactions and loyalty over time. Repeated interactions generate more data that helps the brand design more relevant experiences – thereby creating a “flywheel effect” – a loop that creates increased motivation for customers. businesses, helping them go from “good to great”) and gain strong, lasting value and customer loyalty
Efficiency drives excellence
Research shows that personalization typically helps businesses increase revenue by 10% to 15% (with companies seeing increases ranging from 5 to 25%, by industry/sector and execution capabilities). The more you know how to apply data to improve your understanding of your customers and increase their engagement, the greater your profits will be. For purely digital companies that build models from data, targeting customers directly, personalization is not only in how they market, but also in how they operate.
Personalization leaders also get better feedback from customers. Their attention to relationships and long-term values helps grow the company, and customer loyalty.
Personalization can also be a revenue growth driver for businesses with limited direct access to customers, such as consumer packaged goods companies. Among those companies, those growing the fastest are more likely to prioritize personalization than those growing more slowly. Research shows that even small changes in improving customer interactions add up to a competitive advantage – and this advantage grows over time.
Well-developed companies organize their business around personalization
The companies that get the best results from personalization have a unique approach. Instead of viewing personalization as simply a marketing exercise or an analytics problem, they see it as an opportunity at an organizational scale. And instead of focusing on short-term wins, they look for long-term growth drivers and promote long-term customer value.
Here are five things good growth companies can do to enhance personalized experiences and create value:
- They rely on data and analytics to identify opportunities. Looking at the customer lifecycle, leaders build a detailed view of where the most value is. They leverage customer segments and micro-segments as well as factors in behavioral, transactional and interaction trends. They use those insights to define and measure their personalization goals and align their efforts with customer-centric KPIs.
- They invest in rapid execution powered by advanced analytics. Leaders develop content creation at scale and AI-driven decision making so they can respond to customer signals in real time. They leverage models and predictive analytics to determine which content and messages will serve which customers (e.g., trend models or next-best-action prediction algorithms). They also establish robust measurement processes to track the impact of customer interventions and feed that information back to their systems and teams. These processes help them deliver the right content through the right channels at the right time in the consumer journey.
- They invest in data and technology that is fit for purpose. Instead of letting “a thousand flowers bloom,” personalization leaders target a specific set of customer outcomes and the use cases that support them. They align the organization's resources around these use cases and work back from the desired outcomes to build data and technology maps and identify the enablers and investments needed. needed to provide.
- They are committed to an agile operating model. Businesses that are successful at scaling personalization create teams working in marketing, product, analytics and technology, using a hub and spoke approach. Each hub owns specific elements of the personalization journey, with each speaker empowered to build underlying use cases. Together these teams perform hundreds of tests each year, enabled by advanced data analytics and test-and-learn techniques.
- They invest in talent and training to hone their capabilities. Leaders bring a similar data-driven approach to building their teams and organizational capabilities. They focus on the skills needed to support personalization at scale (e.g. digital and e-commerce acumen, advanced analytics, product management or performance marketing) . They then map these capabilities against their current talent base, using the results to inform hiring, training and upskilling. This approach allows companies to predict the expertise and tools they will need as their personalization programs improve
Personalization is a force multiplier — and business need — that more than 70 percent of consumers now consider a basic expectation. Organizations that can build and activate capabilities at scale can take customer lifetime value on a new trajectory — driving double-digit revenue growth, higher retention, and stronger relationships. The long-term relationship is richer and more cultivated.
