Today’s consumers have no shortage of choice, especially when it comes to online shopping. We live in the era of hyper-adoption—and hyper-abandonment. With thousands of companies offering similar products and services, what can eCommerce retailers and digital marketers do to ensure your customers have a great experience when they interact with your brand so they keep coming back?
According to consumer behavior and eCommerce expert, Brendan Witcher of Forrester Research, the difference between customer experience (CX) leaders and those falling behind is how they use customer data. “Every year I conduct research to find out what’s going on in the market and what retailers are investing in. This year, the biggest buzz is around the idea of becoming ‘data-led’,” he says.
By now most of us are familiar with the idea of being data-driven, but how do we make the leap to becoming data-led? Let’s look at what this means for both brands and consumers, and what steps you can take to start becoming “customer-obsessed” in order to drive revenue, conversion, and loyalty.
Experience (or CX) has become a key differentiator and an important factor in every customer journey. In fact, 61% of shoppers say they’re unlikely to return to a website that does not provide a satisfactory customer experience. The problem is, what makes an experience satisfactory is different for everyone and even differs for the same consumer from moment to moment. How can brands keep up? By making customer experiences personal.
Statistically speaking, this is a pretty astonishing number—almost eight out of 10 shoppers respond to personalization. This is why organizations today are investing in it. The tricky part is getting it right.
Consumers today expect more than just product recommendations or to be welcomed to a website by name. Personalization extends to website content, physical locations, product recommendation and promotions, the mobile app experience, and more. It’s all about making the experience as easy and seamless as possible so it works for the consumer.
But outdated methods can create a gap between what organizations think their customers want and what they actually want. While 89% of retailers are investing in personalization, only 40% of consumers say the information they receive from retailers is relevant1. So where is this gap coming from, and how can we close it? The main culprit is segmentation, which has historically driven eCommerce personalization efforts. Personalizing based on segment (using single data points) usually provides the “wrong” experience for the majority of the group, because no consumer fits into a single box.
Today’s digital leaders recognize this, and have moved beyond segmentation towards 1:1 personalization at scale. You need to get to know your customers individually using all the data you already have at hand.
Technologies like AI and machine learning are enabling this evolution by pulling every data point into a single customer profile and using it to predict multi-dimensional intent.
To be data-led really means to be customer-led. Data is so important because it’s your customers talking to you. If you’re not providing the experience they’re looking for, you’re not listening to them. The good news is, today’s digitally savvy customers want to be understood—in fact, they expect brands to understand them. Consumers already know brands are collecting data about them all the time. It’s how those brands use their data that matters.
Many organizations have already moved from being data-aware to being data-driven. The problem with this approach is that it’s easy to start with an idea—for example, consumers like free shipping— and find the data to back it up, whatever it is. This is why smart companies are investing in becoming data-led, which means drawing insights from the data you collect and using those insights to make strategic decisions.
Organizations today have access to an unprecedented amount of data. Profile data (age, gender, zip code, etc.) is readily available, but it’s the information that customers volunteer themselves that really enables you to individualize experiences. To get customers to want to share data with you, you have to deliver real value. You also have to be careful not to “creep them out.”
Today’s digital marketing leaders collect and use all kinds of data to deliver effective personalized experiences: think Amazon, Sephora, Stitch Fix, and so on. These companies truly understand the power of data. They have a complete view of their customers that encompasses not just their profile but their behaviors, affinities, attitudes, and sentiments, and combine that information with context to respond dynamically in real time.
For example, Hudson Bay has a feature called “Know it fits before you ship” that asks shoppers some very personal questions when they place an order, such as, “Choose your body type.” If a company asked this out of nowhere, it would be creepy. But asking in this context delivers real value, which makes it okay. The next time a customer returns to their website, the company (covertly) shows them clothing that suits their body type. This delivers ongoing value, driving loyalty.
Becoming customer-obsessed is not something you can achieve in one fell swoop, certainly not for every single touch point. Start with strategy. Before you invest in technology, make sure you understand why segmentation is creating bad experiences and what good individualized experiences look like. You can’t get to the next level if you don’t know where you’re headed.
A solid personalization strategy:
When you’re ready to move on to tactical steps, start small and figure out the best place to begin. Witcher recommends first consolidating customer data from all sources (internal and external) into a single, comprehensive repository. This will help you figure out where there are gaps in your ability to deliver personalized experiences, and roadmap filling them. Design each digital touch point to collect customer data, and use it everywhere—not just in that channel. Focus on using personalization to solve customer pain points first, and worry about delighting them later. Finally, as you personalize various touch points, always remember the Golden Rule: Be overt about collecting data, and covert about using it.
No single tool is going to enable you to deliver individualized experiences at scale. It takes a combination of people, processes, and technology to become truly customer-obsessed. Once you’ve checked all three boxes, you can deliver a personalized experience at every touch point to make doing business with your company as easy and engaging as possible.
The end goal is to use customer identities and personas to predict relevant products, journeys, and propensity to provide an ideal experience every time. When you collect customer data across the entire continuum and funnel it into a single platform, anyone in your organization (in any department) will have a full view of who your customers are and what experiences they’re having. While personalization is just one piece of the puzzle, a successful customer-obsessed marketing strategy will drive acquisition efficiency and profitability, onsite conversion and retargeting, and customer lifetime value.