Four Steps To Address Customer Experience Personalisation Challenges

Jacob Vaidyan

“For the lover, a beautiful woman is an object of desire;
for the hermit, a distraction;
for the wolf, a good meal”

– Canonical Buddhist verse quoted by Matthiew Ricard in “Happiness

I love this quote – in the context of customer experience, it highlights both the importance of getting personalisation right and the dangers of generalisation.

My definition of personalisation is: truly understanding your customer and adjusting/changing your service/content/interactions with the customer’s context and needs in mind.

This is not an easy task, especially in a consumer-facing situation. This is borne out by the high failure rates of the proliferation of startups in the online space (check out this article on reasons for the failure).

Why is personalisation important?

There are a number of reasons for getting personalisation right, especially when it comes to customer loyalty, which can be summed up as follows:

  • Building a deeper emotional connection with the customer: The key ingredient for building loyalty and trust with your customer is to have an emotional connection. The feelings your every interaction have with the customer (be it in an online context, in person, or any other channel) will drive customer lifetime value.
  • Driving top-line growth: According to a July 2018 Mckinsey article, personalization at scale can drive between 5 and 15 percent revenue growth for companies in the retail, travel, entertainment, telecom, and financial services sectors.
  • Developing a strategic advantage: Emotional connection with your customers → better understanding of customers → insights on the direction your product/service → strategic advantage

Types of personalisation

What are the different levels of personalisation any organisation can offer, whether you’re a B2B (business-to-business) or a B2C (business-to-consumer) organisation?

Although there are other tiers you can define based on industry and maturity of your customer data/understanding, I like to think of it in the following terms (technology, organisational maturity, and data obviously play a huge role in progressing from one level to the next):

  • Basic – This is the basic level, where some generic aspect of a customer is used to differentiate the experience – e.g., a country/region specific page is displayed for a user based on his/her location.
  • Demographic or interaction-based – Here, some of the basic data the customer has shared, or the products he/she is looking at, are used to tailor the customer experience (again, it is basic – age, gender, etc.). This is also where online data-based insights like “people who bought this also looked at”, etc., come into play.
  • Self-service personalisation – In addition to the previous two levels, here the customer is given an opportunity to control his/her experience by tailoring (e.g., how the page components are displayed in a news website, nicknames used in online shopping, etc.).
  • Deep personalisation – Combining the power of the previous three levels, deep personalisation uses all the statistics from customer’s interaction with your organisation across channels to deliver a tailored and continuously evolving experience. This is Big-Data-enabled personalisation.

A word of caution: It may not be necessary to move to deep personalisation for all industries or all organisations. The regulatory environment, product/service features, channel of interaction, and company value proposition may necessitate only basic personalisation in some cases.

Four-step personalisation transformation

Getting personalisation right is not easy. It takes time and is a continuous process. From my experience working with customers and learning from experts in the field, I believe the following four steps will help organisations make the journey to optimal personalisation with their customers.

Step 1: Make customers an ally in your transformation

Customer trust is a linchpin of any successful customer experience transformation. It is important to ensure that existing customers are excited and have bought into any customer experience transformation you have planned – you need honest feedback and the desire to make things better for both themselves and others. An open, honest relationship, along with a superior product or service, is key. A structured program to recruit pilot customers who represent your wider customer base is also necessary if you’re trying to experiment with different personalisation approaches.

Step 2: Become a customer data-focused organisation

All organisations collect data, but most lack focus in how they use it. In the journey to being an organisation that is further along in personalisation maturity, customer experience enhancement must be one of the core principles of the data strategy. Data from both transaction systems like CRM and finance must be combined with opinions collected from customers during every interaction –whether in person, virtual, or indirect (such as through a partner organisation).

Bear in mind that there is a fine line between being data-focused and being perceived as too intrusive – so make sure the underlying principle is enhancing the customer experience coupled with a purpose beyond maximising profit per customer.

Step 3: Connect sales, service, marketing, and all other channels

Once you’ve nailed your data strategy with a customer experience improvement focus, the biggest impact on your overall customer experience is done by being consistent across every interaction point. This should happen from the first marketing message to sale to customer onboarding to ongoing service and even an exit scenario. With the right data strategy, consistency across all interactions is possible if you build and provide a holistic picture of your customer at all touchpoints. Consistency also means that it’s important to use data from previous interactions (both positive and negative) – for instance, your call center agents must have access to the same customer data as someone in a retail center (this has been the promise of omnichannel software).

Step 4: Tweak your customer experiences continuously

Once you’ve accomplished steps 1-3, the next step is about agility in your customer interaction channels. The ability to do A/B testing on your changes to understand customer responses is critical as well. Your personalisation approaches should be able to change based on changing customer habits, the availability of better technology, and individual customers’ preferences. It is also about realising that like any other transformation initiative, there is no “end state” in a personalisation transformation journey. Personalisation is a continuous improvement initiative which needs to be constantly adjusted to remain relevant for your customers.

While I have used these steps in the context of personalisation transformation, they are generic enough to be applied to other areas of customer/employee experience transformations as well.

This article was first published on LinkedIn.


Jacob Vaidyan

About Jacob Vaidyan

Jacob leads a team of digital transformation and industry experts in SAP who work with customers across Financial Services, Retail, Telecom and Public sector on innovation, digital Strategy, technology/business roadmap and transformations. Jacob and his team work with leadership teams in large organisation to explore how technology and digital disruption can be used to leapfrog competition and build a sustainable future.