Maximize Customer Lifetime Value with Personalization

In an increasingly competitive market, you must focus on improving the customer experience in order to gain incremental revenue. These days, customers are savvy and they know what they want. In fact, they demand it.  Improving customer experience for such savvy customers is no easy feat and personalized shopping experience is something everyone expects these days. It has never been more crucial for businesses to employ big data to deliver personalized customer experiences. Personalization, when done right, can be very effective to retain customers.  Customer retention is critical especially in difficult economic times. 

A recent Forbes Insights survey found out that what keeps people coming back is a highly personalized experience, and often requires a deep data analysis of each customer. Almost 70% of executives who were surveyed in a Forbes survey said that personalization is either critical or heavily significant in outcomes like loyalty, retention or share of wallet. In-house marketers who are personalizing their web experiences see, on average, a 19% growth in sales. “Blasting emails won’t delight a customer. But detecting a mood swing and changing the tone of push notifications does,” shares Kenji Yoshimoto, chief analyst for direct marketing at Shiseido, a brand that predominantly uses innovative data management technology in loyalty programs.

So, why enhance customer experience through personalization? Because the cost to recruit new customers is a lot higher than the cost of retaining those who have demonstrated a willingness to be loyal to your brand by making frequent purchases.  Personalization isn’t all about acquisition and retention, in 2020, almost 51% of customers will expect brands to identify their needs and make relevant recommendations that include price sensitivity to enhance their overall experience. The more personalized it is, the longer they stay with your brand. Customer retention in an economic downturn is extremely critical and can be achieved by constantly listening, learning and adjusting to customer needs and responding accordingly. The objective is to connect with customers on an emotional level so that they feel a personal, genuine connection with the brand. Once customers are comfortable in the relationship, they will remain loyal and even refer family and friends.

What is personalization? It’s all about anticipating and recognizing tailor made experiences or offerings that offer value and meaning throughout the customer journey. This is precisely why mining data about the customer is so important. The more relevant information you can collect, the better you can serve them. Hilton hotels understand that perceived value is different by customer and it’s not a one-size-fits-all model. Hilton’s personalized rewards model keeps customers coming back to their hotels. Another example is Amazon. If you log in to Amazon, what do you see? A list of recommended products based on your browsing and purchase history. No wonder, Amazon leads the way when it comes to personalization. Starbucks has upped its personalization game with the use of AI. Leveraging real-time data, their system can send over 400,000 variants of hyper-personalized messages. Offers that are doled out are customized as per user preferences, based on their recent  activity and past purchases.

Power of personalization

  • 75% of business buyers expect companies to send their company personalized offers.
  • 79% of organizations that exceeded revenue goals have a documented personalization strategy, according to Monetate.
  • “87% of customers surveyed stated that personally relevant branded content positively influences how they feel about a brand,” according to OneSpot.
  • 65% of business buyers are likely to switch brands if a company doesn’t make an effort to personalize communications. 
  • A recent survey showed that customers now value personalization more than speed when it comes to customer service. 

Here are some personalization customer retention strategies: 

  • It’s crucial to analyze behavioral data to increase retention rates. Then develop strategies based on the analysis of customer behavior. When prospects become customers, businesses aren’t just getting recurring revenue, they are getting access to data insights to know the customer better and a chance to build a personalized experience for the customer. Data led strategy helps you understand customer sentiments, tweak your offerings and resolve bottlenecks in the customer journey. 
  • Know and understand your customer personas. Map their entire journey starting from the motivation to purchase from you, their purchase moment, the engagement and association with your company, to what’s encouraging them to keep coming back for more, their feedback, etc. More than a way to understand customer behavior, customer journey maps can be used to find points that need improvement thus improving customer experience. 
  • Spend time to analyze the data. Understand your customers, their background, common behaviors, necessities and desires. With right data at your disposal and a marketing automation software, you can deliver customized content. Treat every customer like you would want to be treated.  You can promote personalized and 1:1 communication with your customers through in-app messages and live chats. The biggest benefit of live conversations is to offer guidance and support at the moment the customer needs it.

Personalization has redefined how we do business these days and the way we touch customers at every point of the life cycle. Personalization isn’t easy and for any brand to implement it appropriately requires effort in terms of designing and executing a well-thought out customer strategy.

 
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