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*Disclaimer: Nothing in this article should be construed as legal, financial or tax advice. Please always consult a knowledgeable professional advisor. *
Experience is becoming increasingly important to where and how customers choose to shop. Learn more about how companies are approaching and curating experiences that meet their customers’ needs.
Businesses have been through a lot this year, and there’s never been more focus on honouring customer relationships and building customer loyalty. With businesses pivoting and adapting to a new way of operating, there is a strong need for businesses to leverage insights to understand new needs and expectations from customers.
Technology that was once viewed as digital convenience has become a necessity, with shopping options like online stores and kerbside pickup. These tools were once viewed as a luxury but are now a must-have for shoppers. Customers are now looking for companies that meet their needs and create a personalised customer experience in the safest ways possible.
Meeting those personalised expectations starts with understanding each customer as an individual with unique needs and preferences. Acquiring that kind of understanding takes time, making long-term customers’ buying histories exceptionally valuable to businesses. In fact, according to a study by Bain & Company, increasing customer retention rates by just 5 percent can increase profits by 25 to 95 percent.
That’s why digitally savvy marketers are making consistent, personalised customer experiences a priority. By learning customers’ needs and preferences up front, companies can design a personalised shopping experience that makes each person feel safe and comfortable. This makes it easier for customers to get what they expect from a company, with minimal decision barriers.
Anticipate customers’ needs
Customer personalisation and consistency have always been central to a great customer experience. There are now added elements to consider, like health and safety, but the basic principles of a superior customer experience that customers expect largely remain the same.
Mail-order catalogues and grouping department store goods by category were early ways that retailers made the physical purchase of products more convenient. Personal shoppers and VIP programs were expansions on the same idea, offering services that cater to specific clients’ needs and goals.
But customer experience today is about more than physical purchasing, and that’s changed the nature of shopping. According to Google data, 84 percent of shoppers use online resources to support their purchasing decisions, and that number continues to increase this year. It’s extremely important their online experience is seamless, as 86 percent of customers cite convenience as the driving factor in their online purchases.
Online eCommerce sites and marketplaces use search- and browsing-based information (as well as past purchase data) to personalise customers’ experience on their sites. Every time a shopper visits Amazon, for example, the recommended products and options are more and more tailored to their activities on the site. Convenient tools that help sellers track orders, offer wish lists, and rate products bring customers back time and again, earning more and more data to inform sophisticated recommendation algorithms.
Personalised recommendations are key to making an online customer experience about more than just convenient access to loads of product options. In fact, when presented with too many options, customers tend to get what is sometimes called “analysis paralysis”. They find shopping decisions harder to make in the face of more options rather than fewer, leading to purchase anxiety over the number of decisions they have to make. For eCommerce businesses, this anxiety can often result in a rise in abandoned carts.
That’s why the next era of personalisation is all about simplifying purchasing decisions for customers. Using technology to better understand customers and serve up hyper-targeted experiences and products aligned to their needs is the future of personalisation strategy. And it’s one of the best ways to build brand loyalty, because customer experience correlates to loyalty.
(Note: remember to always adhere to relevant data protection and privacy laws when structuring customer personalisation.)
Develop a relationship with customers
Truly understanding customers means seeing them as more than conversion targets. It’s about knowing what they want, their pain points, their concerns, and even their goals, in order to provide goods and services that meet a need or improve their lives. This creates a relationship that fosters customer loyalty.
The most digitally savvy retailers are learning that information as directly as possible (and large companies are wise to take a page from their playbook). Direct-to-consumer (D2C) companies, for example, use profiling tools like surveys and quizzes to understand customers’ unique needs from the very start of the relationship. They then use those insights to fuel their sales funnel and develop a more personalised customer experience.
Serving up a curated selection of things customers are likely to buy, especially in an in-person environment, eliminates analysis paralysis while building on the brand-customer relationship. That kind of memorable experience helps drive the kind of brand loyalty that gets customers coming back time and again.
Provide buying options that make customers feel safe
Right now, a personalised customer experience can also simply mean meeting them where they are—both physically and in terms of their shopping mindset. Shoppers today have varying levels of comfort with how they are able to shop, so providing options helps meet their needs as individuals. Some shoppers are more than happy to shop in a store, while others might prefer to click and collect, or just order online. McKinsey recently reported that there’s been a 30 to 75 percent growth in customers making most of all of their purchases online.
That same McKinsey report found that 63 percent of UK consumers have tried new shopping methods or have changed to new brands. This shows that customers are open right now, and that by incorporating more buying options, you’re more likely to attract those shoppers who are looking for new brands to build customer loyalty with.
Nurture customer relationships
Ultimately, personalisation strategies are essential to driving brand loyalty. Companies that use advanced personalisation methods can realise an improvement of 20 percent or more in their net promoter scores, and incremental revenue growth of 10 percent or more (according to BCG research).
For more traditional retailers and other businesses, however, reaching the same degree of personalisation as today’s D2C leaders is no easy feat. As most operate both brick-and-mortar businesses and eCommerce websites, they tend to have separate payment ecosystems across channels (and thus separate, siloed ecosystems of customer information). With disconnected systems, it’s difficult to understand customer behaviour holistically and develop customer personalisation.
Conquering those challenges now is essential to their future success, as customers’ personalisation expectations are rising at an unprecedented pace. According to research by Boston Retail Partners, 79 percent of consumers said personalised service was an important factor in their decision to shop at particular shops.
Prioritising personalisation is not only a matter of setting yourself apart from competition but also essential for business today. According to research by Deloitte, personalisation drives customer loyalty. During lockdown, between 12 to 21 percent of survey respondents switched to brands that sent them relevant messages through their preferred channels.
Loyal customers also tend to be more engaged customers, which Deloitte found yields 20 percent higher customer satisfaction rates, which lead boosts in sales-conversion rates.
By optimising with a more holistic payments solutions suite, companies can create better personalised shopping experiences from the ground up—using customer-driven profile tools and analytics to better understand what customers want, as well as how they browse, buy, and otherwise engage with the brand over time.
With that information, companies can develop better recommendations that make customers’ decisions easier (helping unlock better retention and more customer loyalty) and develop products that rise to their changing needs. Delivering personalised customer experiences in a targeted way—based on information from strong customer relationships—will be key to success for traditional merchants and D2C companies alike.
