05 May 2020
How Personalization Improves Customer Experience in 2020
Published on 11.11.2019
Customer experience (CX) is a complex concept to offer in any business. The needs of each customer in each business of any industry can fluctuate and change from day to day. For example, a retail banking customer can be interested in one type of service for him and his wife. The next month, there's a need for a banking product that caters to families. However, as numerous companies worldwide move towards digitally-focused services, one aspect becomes very clear – CX is key to a successful digital transformation.
When it comes to CX, there are a number of moving parts that must work in unison to make the biggest impact on your customers. Think of CX like a well-oiled machine in that one faulty part in the device can ruin the outcome of the finished product. In other words, customers have a tendency to be turned off by your company if just one aspect of their experience is not to their expectations. With CX, customers expect a modern experience that is true to its time and one that speaks directly to them. In fact, 70% of the customer's journey is based on how the customer is experiencing the brand.
To have a business without satisfied customers is to have a business without a sense of purpose.
In this article, we will be diving deeper into just one, and arguably the most important, of the many corners of CX – Personalization. Through a personalized experience, customers generate a positive sentiment towards the brand because they feel like the company understands exactly what they need.
Below are the three ways in which personalization is important to the customer experience.
1. Improves Customer Satisfaction
In most lines of business, there is one golden rule: A happy customer is a loyal customer. Customer satisfaction can come in many forms, and personalizing their experience on your digital channels is a great way to make sure they remain happy.
By creating a sense of satisfaction, you begin to meet and, in some cases, exceed their expectations. This will leave a lasting impression on them for quite some time and even lead to them championing your brand. However, customer satisfaction must come with a level of consistency in order to maintain the positive sentiment you clients experience.
Customer satisfaction is not as daunting of a task as it may seem. Whether your primary target is B2B or B2C, people tend to be drawn to a company that understands their wants and needs. This is how personalization fits into customer satisfaction. Through personalizing the customer journey, companies can now have a 1-on-1 conversation with their target audience, so to speak. This conversation opens doors to not only keep them hooked on your products or services, but also to keep them coming back at a later date.
86% of buyers are willing to pay more for a great customer experience.
2. Turns New Customers into Loyal Customers
As we have already mentioned above, a satisfied customer is a loyal customer. The second part of this golden rule is important because while securing the first purchase or first product adoption is important, companies still need to maintain the relationship with their customers to keep them engaged and invested in the brand. One of the key ways for this to work is through personalizing the CX.
By building loyalty through personalization, customers become aware their needs are being met each time they interact with a company's digital touchpoint. It shows a sense of inclusion and friendliness as if to say they are welcome back anytime. It builds a relationship with customers that becomes very difficult for other companies to interfere with in the future. Loyalty through personalization becomes infectious to the consumer.
The most intriguing aspect of customer loyalty, from the perspective of the company, is it opens the doors for them to upsell other products in the future. In fact, the success rate of selling to a customer you already have is 60-70%, while the success rate of selling to a new customer is 5-20%.
Worldwide, 96% of consumers say customer experience is an important factor in their choice of loyalty to a brand.
3. Increases Customer Advocacy
Besides it being a completely free form of advertising, word of mouth has become the most effective way to reach new customers. However, word of mouth is a double edged sword in that a customer's experience can determine if they advocate your brand or speak negatively about it.
Enhancing digital journeys through personalization sets up the customer to share their experience with their family and friends, opening up the door to reaching new consumers. This then allows them to share their experience with their family and friends, and so on and so forth. This on-going cycle of word of mouth helps spread a positive narrative about your company.
What's more, consumers have grown to distrust advertisements and so look for user reviews online to help them decide if a company can give them the service they are looking for.
A recent report states that 92% of consumers trust suggestions from friends and family more than advertising.