What Is Personalization? The Benefits of Personalizing the Customer Experience

Vũ Khôi

Author at Wotech Electronics Blog

The Industry 4.0 era creates both great opportunities and great challenges for businesses. Especially in an increasingly fierce and intense competitive environment, attracting and retaining customers effectively is the strategy businesses always prioritize most. Through personalization, businesses give customers fresh experiences tailored to their needs and preferences.

What is personalization?

Personalization is when a business makes adjustments to its products and services and runs effective promotional campaigns based on data collected from customers.

Each business has its own vision and business goals, so the way it personalizes its operations also differs. However, the core goal of every personalization strategy is to make a strong impression on customers, satisfy their needs, and enhance their experience with the company's products and services.

Personalized marketing means collecting data from customers through multichannel integrations such as social media, blogs, email and more. From there, the business builds effective marketing strategies that enhance the experience for customer groups as distinct individuals, matched with different relevant content.

The benefits of personalizing the customer experience

Enhancing the consumer experience

Research conducted by Salesforce found that customers are willing to provide more data in exchange for personalized marketing: 58% of respondents said that a personalized experience is very important when buying from a company.

The reason behind this figure lies in the relentless development of the digital age and consumers' ever-changing needs. Beyond simply using a product or service, customers want to find something unique and engaging, and to express themselves more during the experience.

Increasing sales revenue and conversions

Do not stop at providing an ordinary service — the service you offer needs to spark interest and meet the needs and preferences of each customer group.

According to one study, 75% of consumers prefer to buy from a brand that knows their name and purchase history. Moreover, a Forbes analysis shows that marketers delivering personalized web experiences are seeing double-digit returns on performance and marketing response.

So when customers are happy with the personalized services a business provides, there is a very high chance they will stay with the company. This increases revenue and customer conversion more effectively.

Retaining customers effectively

Raising the customer retention rate by 5% can increase a business's profits by 25–95%. So what is the solution for raising this rate?

According to research by Segment, 44% of customers are likely to become more loyal to a business after experiencing personalized service. Meanwhile, 49% of customers bought a product they had not originally planned to buy simply after experiencing the service.

In the Industry 4.0 era, when competition is ever fiercer and stronger, a well-personalized product or service that fits consumers' needs and preferences is an effective customer retention strategy. This is the essential "competitive weapon" businesses should focus on.

The relationship between data and personalization

In the digital era, data is generated in enormous quantities every day. According to one survey, focusing on exploiting and analyzing data effectively can help a business increase revenue by more than 10% and generate a return on investment (ROI) 5–8 times the marketing spend. So how do data and personalization relate within a company's business strategy?

Data is the foundation on which a business personalizes its services. Exploiting and analyzing the data helps the business clearly understand customer needs and behavioral trends. From there, the business can make sound decisions and implement strategies that match customers' preferences and wishes in order to enhance their experience.

Without data from customers, you would have no grasp at all of their needs and desires — the decisive factors in personalizing services.

Personalization consists of 3 main steps:

• Analyze and compile data to understand buyers' behavior, emotions and preferences

• Adjust the company's products and services based on the analyzed data

• Evaluate how effective the personalized service was, to inform future personalization efforts.

Effective ways to personalize

Ad personalization

What is ad personalization?

You have surely seen many videos with topics similar to the one you are watching recommended on YouTube? Or similar products appearing whenever you look up information about a certain item? Those are signs of ad personalization.

Personalized advertising is a tool that uses consumer data to increase the relevance of ads. This data can include behavior, preferences, needs, geographic location and demographic information, in order to produce relevant ad recommendations that attract users to engage.

The levels of ad personalization

Personalization includes 4 common levels:

• Level 1: Targeting based on a combination of wants, needs and broad geographic location (by country or region).

• Level 2: Targeting based on a combination of wants, needs and narrower geographic location (province or city).

• Level 3: Targeting based on a combination of wants, needs and specific geographic location (by zip code), plus demographic information (age, occupation, gender, etc.).

• Level 4: Targeting based on a combination of wants, needs, micro-location, demographic information and specific personal preferences.

However, with today's advances in data analytics technology, personalization now has 2 more levels:

• Level 5: Targeting based on a combination of needs, geographic location, demographics, specific preferences and purchase intent (derived from search keywords).

• Level 6: Targeting based on a combination of needs, precise geographic location, demographic information, preferences, intent and buying behavior.

Notes on ad personalization

Using personalized advertising effectively generates revenue for the business. However, to personalize ads appropriately without violating consumer privacy, marketers should note the following:

• Be transparent about how you collect and use personal information

• Show that using personal data is essential for better, more informative advertising services

• Be careful when accessing highly sensitive information such as banking matters, trending search topics, politics, sexual orientation, and so on

• Ask users to share their data with you directly rather than buying it from third-party sources

• Do not disrupt the user experience. Instead, create an ad experience that adds value, leaves a lasting impression and creates positive feelings about the brand

Email personalization

What is email personalization?

Email personalization is when a business uses data on loyal customers in its subscription list to send emails tailored to each specific customer.

Effective ways to personalize email

Segment your mailing list

Group customers who share characteristics such as gender, age, preferences and so on, then devise the appropriate outreach strategy via email.

Personalize subject lines

Adding the customer's name to the subject line narrows the distance between business and customer, creating a closer, more comfortable feeling in the interaction.

Personalize product recommendations

Many advanced email services today can use cookies to collect consumers' web browsing data, then send emails highlighting the company's products and services. This is an extremely effective way to boost cart recovery, upselling and cross-selling.

Use automated email

Automated email means using Email Marketing software to send emails automatically to subscribed customers based on the criteria you have set. According to one report, this type of email accounts for as much as 75% of a business's revenue.

Automated email sending should be based on customers' activity history. It is the best way for customers to see the business's care and understanding of them. A few examples of automated email types:

• Welcome emails

• Reminder emails

• Nurture emails with useful content

Send email from an individual

A great way to optimize your email is to send it from a specific person rather than from the business. According to one survey, about 68% of Americans say the sender plays a major role in deciding whether they open an email. In addition, HubSpot tested this and found that when they sent email from "HubSpot," the click rate was 0.73%. When they switched to sending email from a member of their marketing team (a real person), the click rate rose to 0.96%.

By sending email from an individual rather than a business, you create the opportunity for a closer connection with customers, from which you can build more effective email marketing strategies.

>>>> See more: What Is Email Marketing? Why Should Businesses Use It?

Leverage special occasions

Everyone loves celebrating on holidays or days that evoke important memories. So besides remembering the names of subscribed customers, you can add another level of personalization by reminding them of holidays and important anniversaries in their journey with your company. This not only increases customer goodwill but also makes them interact with and stay closer to the business.

Content personalization

Content is an extremely important factor in increasing customer conversion. Relevant, engaging content always makes customers enjoy and interact with the business more. To achieve that, your email needs the following elements:

• Simple and customer-friendly

• A touch of humor that sparks curiosity and interest

• Content consumers care about and useful information

Effective email marketing personalization with SimCRM

Today, many businesses in Vietnam and around the world use Email Marketing software such as SendinBlue, Email Marketing Pro, Aweber and more to run their marketing campaigns. However, these tools have one drawback: they cannot connect with Sales or Customer Care to form a complete customer experience personalization process — they remain fragmented and disconnected.

That is why CRM software is increasingly favored by companies for its ability to bind customers to the business. In Vietnam, SimCRM is a leading customer relationship management suite with modules such as Projects, Employees, CRM and Email Marketing. SimCRM thus helps businesses build a complete customer care process: Attract → reach → care → sell → after-sales.

More specifically, SimCRM's Email Marketing module has the following standout advantages for optimizing the customer experience:

• Simple and easy to use: Unlike many Email Marketing programs with convoluted, complicated processes, with SimCRM users simply drag and drop and design email templates freely to their taste, with no IT knowledge required.

• Customer management and segmentation: Demographic information and customers' buying journeys are stored and divided into specific groups within the Email Marketing module. From there, the business can personalize the email content to fit each customer segment's needs.

• Automatic email sending and campaign performance reports: Users can schedule email marketing campaigns to be sent automatically at set intervals. After each campaign, SimCRM compiles figures on open rates, exit rates, link clicks and more, so managers can gauge campaign effectiveness.

• Flexible integration capability: As an open-source software, SimCRM — in addition to its pre-integrated modules — lets businesses connect with many other third-party programs according to their needs.

• Suits many types of businesses: SimCRM meets the needs of every kind of business. Is your business in manufacturing? The Email Marketing module helps manufacturers stay in constant contact with retailers, updating them on new products and prices. What if your business is in the automotive industry? SimCRM enables the business to grow revenue by emailing newsletters and documents in campaigns promoting new auto parts to customers.

Conclusion

Quickly grasping customer data policies and building suitable personalization strategies is the most effective way to enhance the customer experience. Through the article above, SimERP hopes you will choose the service strategy that fits your company's needs and goals. And don't forget to visit the SimCRM customer management software to enhance the customer experience and get the chance to try SimCRM free for 1 month!

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