The Future of Customer Retention: Personalization

Hi, Retention Legends!

Ever felt that little spark of delight when you walk into your favorite local café and the barista, recognizing you, asks, "The usual?"

You nod, maybe exchange a few words about your day, and walk away feeling seen and appreciated.

What if I told you this personalized experience could be replicated, not at your corner coffee spot with a handful of regulars, but on a massive scale in the digital world?

We live in an era where our mailboxes are swamped with marketing emails, our screens are lit up with ads, and our social media feeds are a carnival of branded content.

We get WUPHFd on all devices at any given moment.

Amidst this noise, generic messaging is just static; it fades into the background.

To truly stand out, to resonate, businesses need to talk to their customers, not at them. Yet most businesses just throw emails and texts at the wall, hoping some stick and turn into purchases.

The one-size-fits-all approach, not surprisingly, simply does not work.

Today's consumers yearn for individual attention—a shopping experience carefully curated for their unique preferences, behaviors, and needs.

This is more than a marketing fad. It's turning into a decisive factor in customer retention.

• The What and Why of Personalization

• Personalization in Action: Tactics to Improve Retention

• Trends and Technologies in Personalization: What's Next

Let’s jump in.

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The What and Why of Personalization

Okay, let's start with the basics.

Personalization is the strategic art of adjusting a service or product to cater to individual customer's tastes and preferences.

In CX lingo, it involves interpreting insights from customer data to tailor interactions.

The end goal?

Make your customers feel like you've been paying attention to them personally and care about their needs.

To make this a bit more tangible, let's play pretend.

Imagine receiving two birthday emails from a couple of brands.

Brand A sends a generic “Happy Birthday!” message, while Brand B opts for a more thoughtful approach, mentioning a product you'd previously ogled and a special birthday discount.

I'm willing to bet my last chicken tender (😟) that you'll feel more valued by Brand B and more likely to reengage. That's personalization at work.

But what gives personalization its VIP status in customer retention? Let's break it down:

Elevates Customer Experience: Personalization adds a layer of charm to customer interactions by making them more relevant and meaningful. This caters to your customers' egos, strengthening their bond with your brand.

Builds Trust and Loyalty: Show your customers that you know their needs and preferences, and you'll be their go-to choice. (We all prefer friends who remember our favorite pizza topping.)

Boosts Customer Satisfaction: An experience that feels tailor-made will surely bring smiles to your customers' faces. Satisfied customers equal a healthy retention rate.

Improves Engagement: Personalization keeps your brand interesting by delivering content and offers that resonate with individual customers.

Now that we've got a grasp on why personalization and customer retention go together like PB&J, it's time to dive into some practical tactics that can help you deliver a more personalized experience to your customers.

Personalization in Action: Tactics to Improve Retention

It's clear by now that personalization is more than just using your customer's first name in an email.

It's about creating a unique, tailored experience for each individual that interacts with your brand. Sounds challenging, right?

Well, I won't lie; it can be.

So, let's get tactical, shall we?

1. Personalized Product Recs: Remember how Netflix recommended "Breaking Bad" because you watched "Better Call Saul"?

That's personalized product recommendations in a nutshell. By understanding the customer's past behavior and preferences, you can suggest products that align with their taste.

It not only boosts sales, but also enhances the customer's shopping experience, making them feel understood and valued.

I recommend collecting zero-party data with a quiz like Octane.ai in order to get a better idea of who your customer is and what they might be looking for.

2. Tailored Email Marketing: Emails are your direct line of communication with your customers, so they better be thoughtful and good.

We’ve chatted about tailoring your emails, but most agency folks will convince you that segmentation is a lie and that “more emails = more money.”

Now, that is not necessarily untrue, but it depends on what time frame you are looking at.

More spam-feeling emails will make your customers unsubscribe or stop opening your emails, much as you would do if you got annoying spammy emails yourself.

On the flip side, a well-timed and relevant email can change your customer’s journey with you forever.

Make sure you understand where your customer is in their journey with your brand and tailor messaging to them.

Go ahead, upsell all you want, but make sure it makes sense on the customer’s end.

A brush that goes well with their makeup? Sure.

An eye shadow when they specifically said they don’t want eye products? Annoying.

3. Customized Content: Let's face it, nobody wants to read content that's irrelevant to them. Personalizing content based on a user's behavior, interests, and past interactions can significantly enhance their engagement with your brand.

It could be something as simple as a blog post on "10 Summer Outfits You'll Love" for a customer who recently bought a pair of shorts or a detailed guide on "How to Maintain Your New Espresso Machine" for a customer who recently bought one.

The only caveat to this rule are those horrendous clickbaity “you won’t believe what this celebrity looks like now.”

That bait works even though it’s highly irrelevant. 😵‍💫

4. Dynamic Website Personalization: Imagine landing on a website that changes based on your preferences, behavior, or location.

Pretty cool, right? Dynamic website personalization allows you to create a custom experience for every visitor, enhancing their interaction with your brand and increasing the likelihood of conversion.

It can be as simple as displaying winter clothing to a user in Alaska and swimsuits to a user in Hawaii.

Or offering different shipping options based on where your customer is located.

5. Tailored CX: A personalized customer service experience can turn an unhappy customer into a loyal one.

By knowing your customer's history with the brand, preferences, and behavior, your customer service team can provide a tailored and effective solution to their problems.

On a practical level, it’s as simple as using a helpdesk that integrates with your store and apps so you get a more holistic customer view before you respond to them.

Even if you use macros or canned responses, add something that shows you are a human and know who you are talking to. (Matt from Huron crushes this)

Remember, it's all about making your customers feel like individuals rather than just another number.

And as daunting as it may seem, the rewards in terms of customer retention make it well worth the effort.

Trends and Technologies in Personalization: What's Next in Retention

As we look ahead, personalization is poised to get a lot more, well, personal.

Thanks to advancements in technology and a deeper understanding of customer behavior, we're moving towards an era of hyper-personalization.

Here's what's up-and-coming in the world of personalized customer retention:

Artificial Intelligence (AI) and Machine Learning (ML): No, this ain’t a sci-fi movie. AI and ML are game-changers in the realm of personalization.

These technologies can analyze vast amounts of data, identify patterns, learn from them, and predict future behavior.

So, what does this mean for you?

Tailored product recommendations, personalized content, and predictive customer service—all at a previously unthinkable scale.

Predictive Personalization: Imagine knowing what your customer wants before they do. That's the power of predictive personalization.

By analyzing past behavior and using advanced algorithms, businesses can anticipate customer needs and deliver personalized experiences–proactively.

I’ve seen quite a few apps that can work to predict next purchase date.

However, I think the future would be leveraging predictive personalization to create a high-LTV customer journey and walk your customers through it like a concierge shopping experience (more on that in a future newsie).

Personalized Video Content: Video is already a powerful medium for engagement, and personalizing it takes it to another level.

Whether a personalized video message from your founder (or CX team) or a customized tutorial based on the customer's recent purchase, video can make your personalization efforts more engaging and impactful. (I’ve recently seen a tool called Maverick that does just this!)

Like everything else, I believe there will be a pendulum swing. I’m not putting all my eggs in any basket, but I’m out here listening and learning.

I implore you to do the same.

That’s it for this week!

Any topics you'd like to see me cover in the future?

Just shoot me a DM or an email!

Cheers,

Eli 💛