How Personalization Can Spark Customer Loyalty
August 2, 2019
Editor’s Note: This guest post was contributed by John Hall, Co-Founder of Calendar.com.
Last year, I had to buy a couple pairs of shoes. As I was checking out, the cashier asked if I’d like to sign up for the store’s rewards program. It was free, so I figured it couldn’t hurt. I haven’t bought anything from the brand since.
There’s nothing wrong with the shoes I bought. The store has every type of footwear you could imagine, and the prices aren’t too shabby. So why haven’t I returned?
Well, besides not being a shoe hoarder, I’d have to say it’s because the company doesn’t send me personalized messages. When it emails me about a promotion, it’s the same message all of its reward members receive. There’s nothing special about it — at least to me.
But what if the brand sent me an email offering a discount on the shoe brands I’ve purchased in the past? What if the company gave me 10% off on my birthday? Or what if it pushed certain types of men's footwear during specific seasons, such as sandals in the summer or snow boots during the winter? I’d be more inclined to be a returning customer.
The point: If this store targeted me specifically, I would be more likely to become a loyal customer. This has become the norm as customers demand more meaningful relationships instead of tired loyalty programs. In fact, according to the "Leveraging the Value of Emotional Connection for Retailers" report, “emotionally connected customers have a 306% higher lifetime value (LTV), stay with a brand for an average of 5.1 years vs. 3.4 years, and will recommend brands at a much higher rate (71% vs. 45%).”
The best way to build these emotional connections? Personalization.
Why Should You Care About Personalization?
Personalization has been defined a few different ways. It can, at a base level, mean products marked with one's initials, name, or monogram. It refers to making things personal, such as by applying a general statement that speaks to a core audience. It can include designing or tailoring to meet an individual's specifications, needs, or preferences.
Whether you realize it or not, each has been used in marketing strategies for the past several years. It could be an email or SMS that uses your first name or a coupon for a product based on previous purchases or demographics, like your location. Through personalization, you’re connecting products or services with the right audience. Additionally, you’re sending them the right messages at the right time.
This may sound like a lot of work on your end, but your customers demand a more personalized experience — and they’ll go elsewhere to get one. Personalized home page promotions influenced 85 percent of consumers to make a purchase. Additionally, personalized shopping cart recommendations were responsible for influencing 92% of online shoppers.
Perhaps more importantly, 81% of consumers want brands to get to know them better. They want them to understand when they should be approached — and when they shouldn’t. More than three-quarters say they’ll only engage with personalized offers.
If you provide customers with a personalized experience, they’ll reward you by increasing your revenue, making more impulse purchases, and returning fewer items. Most importantly, they’ll become loyal to your business.
Why Personalization Drives Customer Loyalty
Personalization drives customer loyalty in a variety of ways. For starters, it greatly improves the experience throughout the entire customer journey. This is in no small part due to artificial intelligence and machine learning, which can guide customers in the right direction or anticipate their needs.
For example, let’s say someone lands on your website to learn what services your business offers. A chatbot could ask the visitor what he’s interested in and direct him to the page containing that specific information. If the visitor shared his email address, he would then receive further details and updates. If he made a purchase, he would receive offers and messages tailored to his purchase.
However, at its core, personalization drives loyalty because it builds upon the following foundational emotions:
- Trust. Through a personalized experience, your audience feels you have their best interests in mind.
- Commitment. Because you’re making the effort to build a long-lasting relationship, customers believe you genuinely value the relationship.
- Reciprocity. Because you’ve gone out of your way to get to know your customers, they’ll return the favor by keeping your brand top of mind.
How to Give Your Customers a Personalized Experience
If you want to give customers a personalized experience, start moving away from mass production and generic marketing messages. Your swim store may be having a blowout sale. But how likely is it that a single man in Tulsa would be interested in women’s beach attire? Instead, he needs to be segmented with a similar audience so he’ll receive more relevant messages.
Next, rethink your loyalty and rewards program. Rather than offer the same rewards to everyone, crunch the data to determine which rewards your customers actually value. For example, The North Face’s VIPPeak Program allows customers to earn points for a curated experience, not just discounts on products.
Also, make sure you’re delivering personalized content, either via email or your website. Again, this could be through using the customer’s name in an email drip campaign or directing him to the correct webpage to solve a problem.
Other ideas: Solicit feedback from customers, encourage them to get creative using your products and services on social media, or crowdsource product development like LEGO. What’s more, don’t forget to anticipate customers’ needs. For instance, I receive a reminder every two months when our dog food is getting low so I can reorder it before running out. Perhaps most importantly, share relevant recommendations and create unique experiences for your customers.
Investing in personalization may seem like an expensive and overwhelming task, but technology has made it more attainable. It’s certainly worth the ROI — and the customer loyalty — in the long run.
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