In today's relentless business landscape, personalization in customer experience (CX) has evolved from a luxury to a vital necessity. In fact, 81% of customers prefer companies that offer a personalized experience. This desire extends to promotions and offers; according to a recent Adobe Commerce survey, 67% of consumers say they want personalized offers based on their individual spending habits, whether they’re shopping online or in store.
Why do customers value personalization so highly? Customers value personalization because it offers relevant, time-saving experiences and makes them feel understood and appreciated by the brand. Brand interactions informed by the individual customer’s data lead to better-quality resolutions, are more efficient, and are more likely to delight. Showing that you understand your customer demonstrates that you value their business and builds trust—especially when that message is delivered with a personal touch by knowledgeable, empowered employees.
Investing in a more personalized customer experience is also beneficial for your organization’s bottom line. Personalization has been shown to increase customer satisfaction (CSAT) scores and brand loyalty, both of which can help to increase customer lifetime value and overall revenue. Bigger picture, personalization helps increase a brand’s return on experience (ROE) by increasing the likelihood that every touchpoint is contributing to creating highly satisfied customers.
Customers want personalization and brands want to provide it, but executing a personalized CX strategy can be tricky. Here’s what brands need to know.
What does CX personalization look like?
At its core, CX personalization is about using data to proactively solve customer problems, upsell or cross-sell products and services, and boost satisfaction. Data used to personalize customer experiences usually includes:
- Demographic data
- Purchase history
- Survey feedback
- Website visit history
- In-store visit history
- Digital ad interactions
- Social media engagement
- Contact center interaction history
Virtually any touchpoint in the customer journey can be employed in a strategic personalization strategy. Possibilities for using this data include:
Ultra-tailored communications
Trigger timely, relevant, and automated re-engagement emails or text messages that acknowledge the customer’s purchase history and prompt them to buy again—on their schedule.
Recommendation engines
Robust customer profiles can help you understand what each customer is mostly likely to purchase in the future. Recommendation engines built on algorithms or artificial intelligence (AI) can be used to surface this information to the customer so they can act on it and personalize it further.
Individualized loyalty programs, rewards, and goal tracking
Loyalty programs do not have to be one-size-fits-all. Programs that offer personalized rewards based on what’s important to the individual are more likely to keep customers coming back. Add personal goal tracking to gamify and incentivize the experience.
Predictive service recovery
You likely know the situations that require service recovery for your brand without looking at the data. Use this knowledge to predict when a customer may be experiencing dissatisfaction and reach out before they do. This type of proactive service helps decrease contact center call and email volume, and it can surprise and delight customers when done well, turning detractors into promoters.
A squeaky-clean CRM
Your customer relationship management (CRM) platform is key to personalization. Just like any data-driven CX strategy, your results will only be as good as the data you put in. Further technology investments that will help with personalized communications may include an integrated ERP, marketing automation software, and omnichannel customer service helpdesk software.
Artificial intelligence
AI has significantly broadened the scope of what’s possible with CX personalization. A McKinsey analysis found that the two biggest hurdles for CX personalization have historically been data management and data analysis. AI gives CX teams the ability to question their data in natural language, eliminating the need for high-level analysts to help design personalization strategies.
AI is also being used during customer interactions to increase the level of personalization that employees can provide, with AI copilots quickly surfacing the context human agents need to have a personalized phone conversation or write a personalized email.
An empowered frontline team
Beyond your tech stack, though, a key part of your CX personalization strategy that should not be overlooked is your frontline team. The team members who interact with customers every day can personalize the customer experience by:
- Finding creative solutions for customers that result in first-contact resolutions
- Offering bespoke recommendations based on their knowledge of a customer
- Communicating in a way that makes customers feel understood
A company culture that empowers employees to do these things is a powerful force for creating personalized, highly satisfying experiences.
Bonus: organizations that prioritize this kind of employee empowerment see higher overall satisfaction (OSAT) scores—we call it the Service Profit Chain.
Is your organization ready to take CX personalization to the next level? Find out how SMG can help.
