May 13, 2019, 710 views

With technology evolving and competition heating up and retailers seeking to break through the clutter to increase their presence in a crowded market, customer retention is crucial.

New research proves that consumers are expecting, if not demanding, highly personalized experiences. And the good news, for those businesses that can deliver, is that customers are typically willing to spend more when they receive such custom-tailored service.

Last year, Forrester found "superior CX drives superior revenue growth in industries where customers are free to switch business and competitors deliver a differentiated customer experience." Additionally, the brands that do it best bring in 5.7 times more revenue than their competitors that lag in such efforts. There's a reason why companies such as Amazon and Apple have been doing so well in the past few years — they understand the value of CX. Brands become CX leaders by personalizing engagement in an entertaining, valuable and non-creepy way, of course.

According to Segment, which helps companies manage and activate data about their customers, more than 1,000 consumers and found the majority of them were less than impressed by the lack of personalization in their shopping experiences. On average, 7% expressed some level of frustration when their experience was impersonal. The benefit to creating personalized shopping experiences becomes obvious. Customers are willing to spend more money, and the companies that make the effort to deliver a personalized experience win.

Here are some findings of the survey:

  • Personalization drives impulse purchases

Forty-nine percent of customers bought items they did not intend to buy due to a personalized recommendation from the brand they were doing business with.

  • Personalization leads to increased revenue

This is the big win for the company willing to make an effort to personalize the customer’s experience. Forty percent of U.S. consumers say they have purchased something more expensive than they planned to because of personalized service.

  • Personalization leads to fewer returns

Only 5% of impulse purchases (mentioned above) were returned, and 85 percent of impulse buyers were happy with what they bought.

  • Personalization leads to loyalty

This is the “Holy Grail” of personalization. Forty-four percent of consumers say they will likely repeat after a personalized shopping experience.

Standardization and efficiency at the core are table stakes for business to survive today. What’s different now is that in order to thrive, transformation efforts will need to be executed with a customer context in mind. It’s no longer just about consistent customer experiences. AI and machine learning, combined with sophisticated marketing technologies, enable and unlock opportunities for personalized experiences delivered at scale. That means that the customer experience has become the driver of the new operating core of the business.

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