Brands Need to Take Hyper-Personalization Seriously in 2023
By Dennis DeGregor, VP & Head of the Global Experience Data Practice, Verticurl - a WPP Company
Whether retailers are grappling with the implications of economic uncertainty, the frustration of persistent supply-chain constraints, or the challenge of attracting and retaining talent, it’s clear that many companies face significant headwinds in the months and years ahead.
During difficult or uncertain times, retailers rely on their highly loyal customer bases, hoping to count on these consistent, predictable revenue streams during an economic downturn. However, to reap the benefits of a predictable, growing revenue stream, brands must provide hyper-personalized experiences that retain existing customers and attract new ones.
According to one consumer study, 71 percent of buyers expect companies to deliver personalized interactions, and 66 percent are frustrated when brands don’t deliver on this expectation. What’s more, the study notes, “Personalization drives performance and better customer outcomes. Companies that grow faster drive 40 percent more of their revenue from personalization than their slower-growing counterparts.”
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As companies look to connect with and engage customers in the years ahead, here are five operating principles that can help them execute a next-generation, hyper-personalized customer model.
#1 Master Experience Journey Management
To create a healthy customer portfolio, brands must master the art and science of experience journey management.
Simply put, companies should strive to wow the customer at every key moment of their channel journey, connecting across touchpoints and engagement sessions by leveraging the right data to target and personalize experiences. Undoubtedly, this means having the right technology to collect, aggregate, and apply the numerous data sources that inform these personalized experiences.
It also requires brands to craft messaging and experiences that align with and support the promises made through traditional advertising and media coverage. Additionally, a recent Harris Poll found that 82 percent of consumers prefer brands with values that align with their own.
Ultimately, experience journey management means consistently augmenting the brand positioning at every interaction at every touchpoint, both digital and human.
#2 Prioritize Real-Time Interactions
Customers are increasingly engaging with brands online, and the emergence of these digital channels has brought real-time interactions to the forefront of the customer experience.
When the customer or prospect is in session on a company’s website, social media, mobile app, or another online platform, successful retailers deliver personalized, targeted content in real-time.
For example, consumers attending a live sporting event should be provided with spatially appropriate messaging that enhances and elevates the experience. In contrast, targeting consumers with ads for at-home activities, products, or services at such a venue misses the mark and diminishes brand salience.
That’s why successful retailers will develop the technologies needed to sense real-time customer needs and opportunities, and to respond with personalized, targeted content in real-time.
#3 Leverage Strategic Data
For many retailers, data is an abundant resource, but isolating the data that matters and turning it into actionable insights is like drinking from the proverbial firehose.
Today’s shifting consumer expectations demand that brands enhance their capacity to leverage strategic data. They must develop a strategic plan that identifies the 20 percent of essential data that drives 80 percent of the company’s experiential marketing efforts. The currency of the 21st century is time, and brands that maximize the amount of value returned to customer or prospect compared to the time invested will thrive, not just survive. Brands that provide high value to consumers for time invested and money spent are seldom disrupted.
Having such data can amplify content-marketing efforts, delivering more personalized experiences that convert leads into sales at higher rates than competitors.
#4 Provide Customized Offers
Too often, brands turn to historical data to make future marketing decisions. Instead, it’s time to leverage predictive analytics to determine a customer’s needs before they arise, enabling companies to provide customized, strategically priced offers to promote customer loyalty. Brands that proactively provide timely and relevant content, continuously enhanced based on both historical and predicted content consumption are the digital champions of the future.
In continuous customer orchestration mode, brands should strive to deliver timely, relevant, proactive content that increases the degree of personalization with every subsequent interaction. By doing this, brands create deeper, richer interactions, and emotional connections to the brand grounded in digital empathy.
In 2023 and beyond, brands that deploy the above hyper-personalization model will lead the pack in their competitive peer group(s).
#5 Adopt Continuous AI-driven Process Automation
In today’s world of increasing real-time interactions and technologies, AI is exploding in importance to brands because of its ability to predict and prescribe outcomes in real-time.
AI solutions can analyze live data to help create offers that are critical to keeping customers in session, decreasing cart abandonment rates, and driving revenues higher.
To be effective, the AI engines have to be smart enough to know when to trigger the action out of the machine dialogue and move it to a human in order to best optimize the client journey. This optimization of the machine/human interface, powered by AI is the frontier of innovation and infinitely more powerful than relying on machines alone.
Looking Ahead to 2023
In 2023 and forward, the “value exchange” will become the prevailing consumer model. The brand must provide the consumer value for their time, their money and, most important of all, their data.
Data is the new oil. Leveraging customer data via hyper-personalization has the best return on capital of any asset on the books. Every piece of data can be assigned its own economic value, which allows the company to deduce the right value exchange formula for compensating the consumer for that data. For every piece of data the customer gives us in every transaction, we need to exchange value with them in such a way that they see the greatest utility in dealing with our brand versus our competitors. The amount of effort required to get what the customer needs from the brand and the value they receive from that interaction is the core of the value exchange formula.
This is increasing as we drive into 2023 and beyond, and it’s a priority worth pursuing now.
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