2020 radically transformed the way that consumer brands do business. With stay-at-home orders in place around the country, the choice was stark: Go digital or go bust.
But the change didn’t stop there. As shopping habits shifted, so did consumer expectations. Now accustomed to the digital experiences offered by the likes of Amazon and Netflix, customers grew to expect the same highly personalized, one-to-one experiences across the board.
Personalization is now table stakes, and according to a new study by Twilio Segment of 3,000 businesses and consumers, 75% of businesses feel the same.
Customer loyalty is on the line
The study found that if brands fail to offer a personalized experience, 44% of consumers say they’re likely to take their business elsewhere.
We can expect that figure to keep rising. For years, retail brands have focused on offering consumers affordability and convenience above all else. But for the post-pandemic consumer, personalization is inching even further up the priority list.
Today, 60% of consumers are likely to become repeat buyers after a personalized experience, so if you’re investing in personalization you’re investing in customer loyalty and future sales.
In addition, more than a third of consumers now say they’d return to shop with a brand following a good experience, even if there are cheaper or more convenient options available elsewhere.
That’s quite the revelation and bodes well for brands that are set up to offer positive, personalized experiences above all else.
So how are brands doing?
Put simply, expectations are outpacing experiences. While 85% of the businesses studied by Twilio Segment believe they are offering personalized experiences, only 60% of consumers seem to think that’s the case.
That’s a problem, particularly as market leaders continue to pour investment into their digital offerings, raising the bar for everyone else.
The challenges of data access and accuracy
The first step to personalization sounds pretty straightforward: Brands need a firm understanding of who their customers are, how they behave and what they want.
For that to happen, access to high-quality, reliable and trustworthy customer data is essential. It’s a straightforward tech problem, but too many brands are falling at this first hurdle.
In fact, the study revealed that nearly half of brands see a lack of accurate, real-time customer data as the biggest challenge to their personalization efforts.
There’s a simple solution: a strong data foundation. Personalization (and, frankly, any other insights-driven customer experience you want to roll out) can’t work without this single source of truth, consolidating, cleaning and organizing your customer data so it’s ready to activate.
A first step is getting the right customer data platform (CDP), a technology used by today’s top brands to collect data from anywhere a business interacts with customers in order to create a cohesive, unique customer experience. It will allow you to break your customers into distinct audiences, against which you can design hyper-targeted experiences based on their needs, preferences and historical interactions with your brand.
Omnichannel is being overlooked
With so many digital and physical touchpoints, it can be tricky to understand where and how consumers are interacting with your brand. And understandably so, given that the average person now uses more than 10 channels to communicate with businesses.
But that’s no excuse. Consumers are tired of receiving inconsistent, unpersonalized communication from brands across channels.
For the 75% of businesses that are failing to deliver omnichannel personalization, departmental silos and legacy infrastructure are key barriers to success.
Luckily, there are clear steps that can be taken to overcome these challenges and power the consistent, contextual personalization that customers expect across all touchpoints. To power these omnichannel experiences, businesses need to invest in technology, like a CDP, that unlocks insights from all sources—web, app, CRM, payments and more—to truly get to know their customers and create continuous, unique customer journeys and experiences to meet each of their needs.
For example, an athletic goods retailer could know when to execute a new sneaker campaign based on the customer's logged running miles in its app, or a financial services provider could know when to promote investment products based on its knowledge of a checking account holder.
Investing in the future
In today’s competitive digital environment, we can expect innovative and digitally native brands to continue setting new standards for the digital experience, raising customer expectations along with them.
Personalization isn’t going anywhere. To thrive, brands must invest in the digital customer experience and in the technology that powers it.
Without them, customers will walk.