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Four ways to create the ultimate personalized customer experience

As the demand for a more personalized customer experience grows, companies are scrambling to adapt. Follow these four tips to succeed with customer engagement.

Every consumer has come to expect unprecedented levels of personalized customer experience from the companies from which they buy. This led to companies having identity crises when it came to reaching their target market and retaining consumers. Companies are struggling to achieve deep and high-value relationships with customers and, as a result, churn, attrition and high opt-out rates continue to be significant problems.

Issues such as high-opt out rates and quick turnover among customers can lead to sales losses, inadequate marketing strategies and so on. In light of this, companies are re-tooling loyalty programs by figuring out how to successfully create personalized customer experiences.

Here are four ways your company can build loyalty and create a personalized customer experience.

1. Understand the value of loyalty

Brand culture and senior management need to support consumer experience (CX) and loyalty initiatives by creating a customer-focused culture and metrics, CX-based compensation, integrated consumer communication across all touchpoints and an adequate CX budget allocation.

"The most successful businesses ensure their staff is engaged and understand the value of loyalty," said Mike Polner, director of product marketing at FiveStars, a mobile loyalty app provider.

Another element of creating a personalized customer experience is keeping the company engaged in the customer journey by establishing a regular means of providing the organization with progress reports on performance against CX metrics.

"Transformation needs to take place both internally and externally," said Jeroen Hoencamp, CEO of Vodafone UK. "Listening to customers and understanding customer value from their perspective will allow customer-centric transformation to take place."

Active consumer listening, with a goal of deep understanding, lets brands look at touchpoints and interactions from a value-driven experience standpoint that cultivates ongoing loyalty, not just an endpoint transaction goal.

2. Prioritize consumer understanding

Building a personalized customer experience means building trust. If consumers don't trust a brand or feel appreciated for loyalty, they will go elsewhere for a better experience. Brands that have successful consumer engagement strategies put consumer understanding at the top of their priority lists.

It is important to define the criteria for success of CX and loyalty strategies. Setting benchmarks and determining which factors and data will be monitored on a regular basis to determine progress, success and improvement is equally necessary.

A CX program without a clear-cut goal is a useless CX program. Knowing what you want to accomplish by engaging customers, understanding what engagement actually means to the customers and understanding what it will take to accomplish this goal is important. Bloomingdale's chairman and CEO Tony Spring noted that consumer understanding is paramount in every aspect of his company's marketing. "This is the age of empowered consumers," he said. "We need to connect with customers on their terms."

3. Have the right tools to measure CX impact

The correct interpretation of data is essential in developing CX innovation. True understanding of how consumers interact with the brand will shape every strategy, communication and the CX program's success and bring actual insight to drive marketing initiatives.

In structuring its loyalty program, Safeway examined many data factors, some of which were surprising. The agency that structured their program noted, "You will run the danger of cannibalizing your business by giving rewards to people who are going to shop with you anyway. ... It is better to target your programs mainly to those whose behavior you want to change."

It is important to re-invent your data to put consumers into segments based on preferences, purchases, communication methods, inquiries/customer service issues, lapsed customer status, new customer status, loyal customer status, etc. Then, re-think communication and engagement strategies for each segment; not just for customers in general.

Prior to instituting the program, Safeway surveyed its customers and asked: How much do you spend on groceries every week, and where else do you shop? Answers were combined with actual spending data to determine Safeway's "share of wallet" and to gain understanding of new opportunities that could be uncovered with a loyalty program.

4. Employ a customer success team

It is necessary to put together a customer success team with representatives from all aspects of CX and loyalty so that your company can continually have a 360-degree view of engagement wins and losses. Cultivate consumer advocacy so that you are regularly receiving input from those who interact with the brand most.

Figure out who on your team can offer customer success insights. Take a look at your entire staff and hand-pick representatives who can report on real-life CX interactions, problems and successes for key information that can prompt new actions.

Nick Mehta, CEO of marketing firm Gainsight, noted that having a dedicated customer success team, as well as a group of consumer advocates, is a necessity for building loyalty and a personalized customer experience. "The customer success [CS] team should be your eyes and ears. ... CS can tell you which users love using your service. ... Many times, users can offer informal advocacy and on the ground feedback that decision-makers can't. In addition, there are usually far more users than decision-makers."

In order to be able to connect with customers successfully and to create a personalized customer experience, companies must be willing to change. It is important to look within your organization to find staff with important customer insights, to have the right tools to measure data, to prioritize customer understanding and, very importantly, to understand the value of customer loyalty.

For more on marketing engagement strategies, see Ernan Roman Direct Marketing.

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