How do brands make their customer experiences relevant when reaching out to hundreds or thousands of customers every single day? And will customer engagement increase if they "only" receive automated responses? How does this affect customer value? The answer is both simple and challenging: Personalization and scale, combined with a pragmatic approach and feedback through customer behaviour.
Scale allows us to customize
Personalization and scale may initially seem like opposites - who hasn't experienced a standardized response from a brand that required extra reading to understand the meaning? This is often because communication needs to cover different situations or types of customers. Some argue that scale equals standardization and a solution that must fit everyone. However, my experience shows that scale actually provides us with good opportunities for personalization, where initiatives, instead of being general, create higher relevance for customers. Personalization at scale is about taking the desired customer experience so seriously that every part of the experience is based on context and past behaviour. It involves personalizing all aspects of the brand's actions. From my perspective, I will primarily focus on the part of the customer experience that deals with direct communication between the brand and the customer.
Expectations and results
Brands naturally implement personalization at scale because it differentiates them, provides better customer service, and better results, but also because of customer expectations: Consumers (71%) expect to receive personalized interactions (McKinsey, The Value of getting personalization..., November 2021). Consumers (76%) also believe that receiving personalized communications is crucial to considering a brand, and 78% say it affects their willingness to repurchase.
When brands use personalization at scale, the same study shows that their revenue grows faster than their competitors. They thus create strong, lasting customer value and loyalty by designing more relevant and personal experiences based on data from repeated customer interactions. This is also evident in my work, where personalization at scale is a significant factor in achieving positive results in the Danish market.
Engagement model
It can be easy to say that brands should work on personalization but difficult in practice. However, it is my experience that you get far by respecting both the customer and the brand.
A good customer experience is built, among other things, on frequent activities, but naturally, many wonder if the brand risks annoying the customer with a high frequency of activities? To answer the question, we have developed an engagement model, which in its simplicity involves analyzing each customer's current engagement and also the predicted lifetime value. Once we have identified what drives each customer's engagement, we tailor the activities and frequency to increase engagement and thus the value of the customer.
Feedback through customer behaviour
We are naturally interested in whether the planned activities for the customer also have the desired effect. Here, we use customer engagement and behaviour as an expression of feedback. We use a suppression model to control the frequency of communication from a perspective of:
- How much communication the individual customer would be interested in or engage with
- How important the brand assesses the communication to be in driving increased engagement and sales. (Because every communication naturally has a cost associated with it.)
Based on customer feedback and the value of the initiatives, we adjust the activities. This means that some customers receive many activities with high frequency, and others receive fewer activities. Both are tailored so that customers have a good experience and are willing to interact with the brand. Frequency alone does not suffice. We prioritize the content of the communication based on the potential increase in customer engagement and value. Thus, it becomes a business goal to increase all customers' individual engagement scores through tailored communication to each individual.
Everyone can participate.
Now you might think that your brand is smaller, and it's difficult to get started, but I would challenge you and say that it's just about getting started.
