With Customer Loyalty at Stake, How Are CEOs Approaching Personalization?

The demand for personalization as a key element of a successful customer experience (CX) is not new. Heading into 2022, it is now one of the biggest influencing factors for consumers which indicates two key factors: 

1. Current personalization efforts are failing to meet customer expectations
2. Customers are becoming increasingly frustrated with the irrelevant digital experiences they’re being served.

The reality is that customers really don’t care how complex it is to achieve personalization. As Greg Ng from Brooks Bell discussed in a recent webinar, customers don’t really know (nor do they care) about organizational structure. They see the brand as a whole and expect a consistent brand experience regardless of the channel they’re engaging on or department they’re dealing with. 

Personalization gone wrong

Personalization sounds like a simple ask from a customer perspective, but companies have a very different view. They’re focused on achieving specific key performance indicators (KPIs) because that is a tried and true measurement of success. The problem is that most enterprise companies operate in silos and the people within those silos don’t talk to each other. Each silo is fervently chasing their own specific KPIs with little regard if they’re working at cross purposes to other KPIs within the organization or if their efforts are having a negative impact on the customer experience.

There is a goldmine of customer information that never gets shared, especially with regards to existing customers. As a result, actual customer needs and wants are never heard, they remain a guess and this impacts the customer experience—most often negatively. Instead of knowing what elements can make a difference to CX, brands are just throwing out ideas and hoping they’ll land somewhere.

What is a better approach to personalization? 

Sree Sreehararaj, CTO of Sephora echoes this sentiment. Selling beauty products is personal, and each customer’s needs and preferences are different. In store, with a sales and beauty consultant interacting with a customer face to face, it was relatively easy to connect with customers and ask questions that could pinpoint what they needed or wanted. Transitioning this type of customer experience to digital channels was understandably challenging. Instead of simply seeking to replicate the experience digitally, the Sephora team sought ways to leverage digital capabilities to expand and enhance the digital shopping experience. It wasn’t a shotgun approach of targeting messaging to customer segments or personas, but rather the team diligently worked on finding ways to connect one-on-one with customers and genuinely engage with them across all digital channels. This required experimenting with different ideas and then listening and learning what customers were responding to in order to understand what was important to them. 

Building better customer connections

Traditionally most brands have sought to build connections with customers with the sole purpose of making them aware of specific products and their features. The problem with this type of brand awareness is that it is less about the customer and more about the brand. When this same strategy is applied to personalization efforts, it misses the mark and is the reason why brands fail to effectively connect with customers. 

A possible reason behind this is that customer needs and wants are assumed rather than actively sought out. Customers are usually segmented according to demographics which really have very little impact in terms of aiding personalization efforts. (We’ve written about this in a previous post: Why demographics can’t help with personalization).

Another example is recommendation engines which have worked very well for industry leaders such as Amazon, but when copied by other companies have been less effective. Past buying behavior doesn’t always indicate what a customer is looking for when returning to a website. Especially when big shifts happen in the market that influence how and what customers buy. A better way is to see how they respond to new ideas and experiences that are served to them while browsing. This can be achieved more effectively through a culture of experimentation. 

How AI enables greater experimentation and personalization at scale

A primary challenge in personalization of digital experiences is finding ways to build one-on-one connections with thousands or even millions of website visitors. Fortunately AI’s ability to navigate multiple touchpoints and variables can help brands overcome this hurdle and enable experimentation at a different scale. 

This is especially valuable in a rapidly changing marketplace. In the past, brands may have created customer personas to market to, but this is an outdated strategy that is no longer effective (and perhaps never really was). The data isn’t relevant and there are too many varying factors influencing customer buying decisions. According to Kerry Liu from Kinaxis, leveraging technologies such as AI is essential if brands want to be able to keep pace with change. Based on learnings from how visitors are browsing a website, AI can predict what information to serve next that’ll lead a visitor further along the customer journey. This is based on how a particular visitor is uniquely browsing which enables brands to serve more personalized digital experiences. 

Personalization takeaway

The demand for greater personalization is not one that brands can ignore. 80%  of customers are more likely to buy from a company that provides a tailored experience and 66% of customers expect brands to understand their individual needs. Trying to achieve this manually is practically impossible, but technologies such as AI thrive off complexity and are able to learn from online behavior to generate insights that guide personalization efforts. Digital experiences continue to influence buying decisions and finding the right technologies to help optimize CX is likely to remain high on the agenda for CEOs.

Additionally, CEOs have an important role to play in encouraging and enabling a culture of experimentation and learning within their companies. The more difficult task will be to find ways to remove organizational silos in favor of fostering a culture of collaboration and alignment which will improve personalization efforts. When this type of culture is in place, artificial intelligence as a technology can then become the enabler that makes personalization strategies far more effective. Brands that manage to consistently deliver more personalized customer experiences will be ahead of the curve and far better equipped to respond to changing market conditions.