Four Common Pitfalls Of CX Personalization
Personalization can serve as a differentiator for your brand’s Customer Experience platform, but there is a fine line between providing a uniquely specific service and creating an invasive perception of your brand. Ideally, customers will feel as though your brand is not taking advantage of information to maximize profit from each individual, but instead are using this data to provide a more accurate value. The following article was written by Accenture Interactive for Adweek, and it details four of the most common mistakes that organizations make when implementing these personalization tactics. You can access the piece by clicking here, or by reading below:
This piece was originally published by Adweek in February 2018:
“Today’s consumer landscape is overflowing with choices, and people often turn to third parties like influencers and media to get curated advice on everything from buying a new car to choosing a restaurant for dinner.
Brands, however, are put on the sidelines, as many are not delivering the personalized content, expertise and services consumers expect, informed by a deeper understanding of their needs.
The price of this missed opportunity is significant. Four out of 10 consumers switched companies in 2017 because of poor personalization, according to Accenture’s recent study on hyper-relevant customer experiences. This, in turn, cost companies an estimated $756 billion last year.
The upside to doing personalization well is that 75 percent of consumers are more likely to buy from a brand when they’re recognized, remembered or served with relevant recommendations. “The whole concept of personalization is simply on steroids right now,” explained Macy’s executive chairman Terry Lundgren at NRF’s Big Show. “It’s all about the consumer in that one moment in time. We’re doing anything we can do to connect directly with consumers and make shopping convenient for them.”
With that in mind, here are four key concepts to keep in mind when thinking about how you’ll do personalization in 2018:
1. Are you listening to the wrong signals?
Companies that think they’re good at listening to their customers often pay attention to the wrong things. For example, a retailer might look at purchase history as a window into future customer needs, but fail to consider context or other attributes. So the person who bought a blue shirt gets recommendations for—take a guess—other blue shirts without any consideration of what about that shirt—fabric, fit, style, etc.—mattered in the first place. According to Jeriad Zoghby, global personalization lead for Accenture Interactive, this leads not only to irrelevant recommendations but also to the potential loss of that customer.
To see what better looks like, “pay attention to Netflix,” says Zoghby. “They don’t care about the transaction. They care about the attributes—whether you like certain genres, directors, themes, characters or actors. That allows them to develop new private label products based on market concentration. Retailers should be doing the same thing.”
In short, focus less on what people bought in the past and more on why they bought them, as well as the micro-moments that led to the purchase.
2. Are you still using personas?
Customer segmentation will only get you so far. Many brands are still trying to personalize experiences by putting consumers into pre-defined buckets based on demographics and psychographics. Instead, brands need to drill down to the individual shopper and they need to do it in real time.
“If I go online and look at a product in January and you’re still talking to me about it in June, and in the meantime, I’ve been in your store five times looking at other products, you’re not talking to me in a relevant way,” says Forrester principal analyst Brendan Witcher. “You come across as not listening.”
The solution is to build a living profile based on all the interactions your brand has with the customer—how they use your app, what offers or themes are in the emails they open, the attributes of the products they’ve purchased, etc. And because all this is a living profile, it changes as needs evolve.
3. Do your customers trust you?
Generally, customers are willing to entrust their personal data to brands and retailers so long as those brands follow three rules: First, they are transparent about their data collection; second, they give customers control over it; and third, they use it to benefit the customer, not just themselves.
“It comes down to transparency, control and service,” Zoghby says. “Do this and 80 percent of customers are good with you collecting their data.” You need to ensure that customers feel like they own their data and they’re receiving something of value from you in exchange for sharing it.
“Look for opportunities to make your customers feel like they can trust your brand, that you’re listening to them, you understand their needs and you’re working to solve those pain points for them,” suggests Witcher.
4. Are you being creepy?
Many brands worry about being too personal, yet new data from Accenture Interactive’s personalization research indicates that 80 percent of customers report they’ve never received a communication that was too personal or invasive. Of the 20 percent who have, half the time it was because the brand experience was using data from an outside source. That leads to two guidelines. First, brands risk being viewed as creepy if they try to gain an advantage by using information that the customer didn’t provide to them directly. Second, make sure the goal is to create a benefit for the customer.
“Personalized interactions that don’t add real value can add time and friction, and this might end up infuriating customers instead of helping them”, says Mikhail Naumov, president of DigitalGenius.
“Sometimes it makes sense to provide answers that are more direct and to the point,” says Naumov. DigitalGenius applies artificial intelligence to text-based communications with customers, allowing service agents to respond faster and more efficiently to common questions. More important, agents can choose which transactions to personalize, when a more personalized response is appropriate.
Above all else, companies that put their customers’ needs ahead of bottom-line concerns will deliver better customer experiences. That’s how to build trust and boost customer loyalty, and it is the essence of keeping a strong focus on customer experience. As Jeff Rosenfeld, vp of customer insight and analytics at Neiman Marcus, recently explained, “personalization improves the experience by making the entire journey, from initial exploration through post-purchase, much easier. We like to call it ‘friction reduction.’”
Making things easier is really the core tenet. Per Rosenfeld, “great personalization helps drive a virtuous cycle of loyalty in which the customer is engaged, provides data that improves the personalization further, which increases customer engagement, and so on. As loyalty improves, revenue goes up.”
CX Personalization FAQs
What are common pitfalls of CX personalization?
Common pitfalls include over-automating interactions, misusing data, failing to balance personalization with privacy, and delivering irrelevant content that doesn’t align with customer expectations.
Why can over-automation be detrimental?
Over-automation can make interactions feel impersonal and robotic, undermining the goal of personalization.
How can businesses avoid these pitfalls?
By using data ethically, maintaining human elements in interactions, and ensuring personalization efforts are genuinely customer-centric.
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