Stop Segmenting; Start Individualizing

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Stop Segmenting; Start Individualizing
Stop Segmenting; Start Individualizing

First impressions are already important. But in today’s customer-centric world, every impression counts.

According to Brendan Witcher, principal analyst for Forrester Research Inc, customers’ expectations reset every time they’re exposed to a better shopping experience. And they’re not just pinning direct competitors against each other, either. Witcher says they’re comparing all of their brand experiences, whether they’re with a bank, a government entity, or a fashion retailer.

“These buyers demand a new level of customer obsession,” Witcher said at the recent 2016 Bluecore Explore Summit in New York.

Marketers recognize the importance of meeting—if not surpassing—customers’ expectations—and many are investing in new technologies to make their experiences a cut above the rest. An April 2016 Forrester report shows that 72% of businesses consider improving the customer experience a top priority, and 63% of marketers are prioritizing the implementation of technology investments to help achieve their goals.

Of course, actions speak louder than words. And while many marketers say they’re working on improving the customer experience, consumer behavior suggests otherwise. Another Forrester report shoes that 68% of consumers say they’re unlikely to return to a website that doesn’t provide a satisfactory customer experience. The research and consulting firm also finds that just 7% of consumers agree that their email offers are well-timed to their needs, down from 9% in 2015.

“[Customers] want to know you get them” Witcher said. “They want to know that it’s not just another email from another nameless, faceless brand out there. It’s from someone who gets me.”

Creating experiences that are tailored to customers’ needs and preferences has long been the Holy Grail for marketers. Because, as Witcher put it, “Great personalization doesn’t really look like personalization…What it looks like is a great experience.”

But for many organizations, marketing’s personalization capabilities haven’t been all that personal. First, marketers had segmentation. And while Witcher says it served its purpose for what data and technology marketers had available to them in the past, organizations are now in an era where they don’t need to rely on segmentation, except in situations where they know very little about the customer.

“We can do things better today,” he said.

Then, marketers had personalization—a tactic Witcher says has been monopolized by product recommendation engines and simply built off of segmentation, rather than customers’ intent in the moment.

As the evolution continues, Witcher says marketers now need to rely on individualization. Forrester defines this business strategy as “experiences that use customer data to structure interaction, functionality, and content around the needs of individual customers.” 

According to Witcher, every individualization strategy contains these four elements:

1. Customers are identified and treated as segments of one based on their data-packed profiles.

2. Customer data is assessed in real-time to dynamically identify intent.

3. Personalized content is delivered equally across screens and channels (because customers don’t change simply because they change devices).

4. And central data repositories and connected technologies enable richer and more contextually relevant experiences.

Some brands are already moving in this direction. Witcher cited Neiman Marcus and Acustom Apparel as two examples.

Luxury department store chain Neiman Marcus allows customers to select their favorite in-store associates and connect with them directly through the NM Service app. The app has two interfaces—one for shoppers and one for associates. According to a 2012 press release, when a customer with the app enters the store, location sensors alert the associate of her arrival. Customers are also able to view whether their favorite associates are working that day, as well as indicate their favorite products or leave messages for them, all of which is relayed to their associate of choice.

As for Acustom Apparel, the men’s clothing retailer performs a 3-D body scan to take each customer’s measurements and then allow him to customize his outfit, such as the lapel and lining of a suit jacket.

As for brands hoping to emulate their success, Witcher suggests starting small and initiating an evolution, not a revolution. Here are five of his suggestions to help organizations do just that:

1. Identify gaps in the company’s ability to deliver individualization: One of the top inhibitors of individualization is dependence on legacy personalization tactics, Witcher says—that and failure to invest in the right technologies. Change can be scary, and Witcher knows that marketers are stretched thin. So, he advises them to devote their time, energy, and resources to identifying what will impact the customer experience the most and how they can better pinpoint customers’ intent to deliver the individualization that they crave. Forget coming up with the perfect slogan or achieving that next level of segmentation.

“The truth is they have to prioritize what’s going to impact the customer experience, first and foremost,” he later told DMN “and stop focusing on things that customers don’t care about.”

2. Take off departmental blinders and consider every part of the customer journey. Marketing isn’t the only department impacting the customer experience. Sales, IT, customer service all play a role, too. It’s important for marketers to break down silos and work with multiple departments to ensure that the customer has a seamless, connected experience. Also, they should be prepared to perform tasks that extend outside of their traditional marketing role.

3. Design each digital touchpoint to collect and leverage customer data. Marketers can’t create individualized experiences if they don’t know whom they’re talking to. That’s why Witcher says it’s vital for marketers to take advantage of the opportunities they have to learn more about their customers.

“They need to become a customer-obsessed organization and realize that they can’t deliver great customer experiences if they don’t understand customer needs,” he told DMN. “Too many organizations today focus on what they want to say to the customer instead of what the customer wants to hear from them.”

4. Focus on creating great customer experiences and don’t over-personalize. To avoid coming off as creepy, marketers need to prove that they’re exchanging customer data for value. Witcher says being upfront about what marketers are using this data for can help.

5. Leverage digital partnerships. See brands that do what you do (or want to do) only better? Witcher suggests asking to partner with them, such as through co-branding.

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