Today, customers expect highly tailored and targeted interactions when they engage with a brand. For these interactions to be of value, they need to be personalised and timely, and must provide meaningful and relevant experiences. Traditional ‘earn and burn’ loyalty programs are expensive and are not leveraging the true power of personalisation to improve a retailer’s business performance. To deliver valuable and highly personalised customer communications and interactions, retailers need
ed to capture all the signals that a customer displays through their engagement with the organisation. This is across the buying journey and over the lifetime of that customer’s interaction with the brand. This requires creating a digital fingerprint that integrates the customer’s profile data, captures their transactions, tracks all interactions across all channels, and can predict future behaviours, values, and preferences.
What is critical and differentiating is that personalisation extends beyond traditional marketing communication and flows right through to service delivery, merchandising, offer creation, and bundling of services. This ensures minimal discounting and margin erosion and true tailored service delivery. Those that embrace personalisation not only deliver on customer outcomes, but also on business performance.https://84a927587fdd5f3d80efed20c347160f.safeframe.googlesyndication.com/safeframe/1-0-38/html/container.html
The accumulation of points is no longer valued; it’s about how loyalty programs can offer more immediate customer value and benefits, with personalisation as the means of delivery.
The value of personalisation
The power of personalisation is no secret. Amazon estimates that around 35 per cent of its revenue is solely based on targeted personalised recommendations when customers browse their website. Also, research by Gartner recently discovered that when used at the right touchpoint’s, personalisation boosts engagement and increases revenue by up to 28 per cent and sales conversion by up to 71 per cent.*
As a result, many organisations and retailers are making significant investments in this area to develop contextual and personalised experiences to differentiate themselves in the market:
The Wine Collective is an Australian brand on a mission to reform how the wine industry sells to consumers. To achieve this, it has developed an advanced personalisation engine that provides customised recommendations each time a customer shops. The result is a personal wine store, which reduces the brand’s 10,000 products down to a targeted selection based on customers’ behaviours, preferences, and previous interactions.Best Buy is bridging the on- and offline personalisation space with its app, which enters ‘local store’ mode and sends relevant personalised push notifications, tailoring the experience to the location’s inventory. Using advanced analytics, Best Buy has honed its personalised emails’ timing, frequency, and product to make sure customers never miss out on the items they like best.
How it’s done
Organisations struggle to successfully integrate key capabilities to deliver true personalisation. Many possess the key skills, platforms, data, and analytics required, but lack the ability to use these assets to their full potential.
KPMG has identified capabilities that need to be aligned to develop deeply personalised customer engagement that responds to the key moments that matter for each interaction:
1. A cross-functional way of working that breaks down traditional structures to place the key capabilities (data, insights, CX, marketing, merchandising) in a more agile operating model that can quickly develop and test new initiatives and deploy them promptly into channels.
2. Collection of deep customer insights to inform the design of customer journeys, interactions, and treatment strategies, and identify future pathways, behaviours, value and needs.
3. Continual and transparent measurement to quantify in-market performance easily, provide prompt feedback, and support the ability to experiment with new ideas and designs and quickly assess their value to the customer. Testing and learning activities across personalised pricing and personalised bundling are key.
4. A scalable customer engagement platform that is enabled by a trusted, integrated, and comprehensive (transactional, contextual, behavioural) view of the customer, supported by the real-time capture of all channel responses. The platform must provide the ability to adapt continually to evolving market expectations, to optimise and orchestrate the experiences in each interaction.
Investments in standard CRM functions and technology alone will not deliver the full benefits of personalisation for you, they will allow a single source of truth and segmentation capability but extending into decision-engine design is crucial to extract full value from multiple technology investments.
For an optimum solution, imagine a layer cake, where the foundation layer is clean and trusted customer data, followed by a platform whose clever architecture allows it to adapt to the market quickly, a layer of efficiently designed processes, and lastly a layer of intelligent automation that can provide real-time insights to users while interacting with customers via assisted channels. That final layer can also use the same insights to automate tailored experiences via unassisted channels. Over time, you will be able to fine-tune this model as you observe what works and what doesn’t.
5. An emphasis on ‘lights out’ automation, to accelerate the development of new customer initiatives, mitigate the numerous hand-offs between teams across the value chain, and apply algorithmic intelligence to the decision-making process across all channels.
6. A focus on developing meaningful interactions that generate value for both customer and organisation. Success is not to be measured in terms of volume of interactions but is based on a personalisation approach, which involves communicating less, with a focus on generating more value, as measured in loyalty, advocacy, engagement metrics, and conversions to revenue.
Although many retailers are beginning to develop their capability to deliver personalised customer interactions, very few have truly mastered the ability to deliver these consistently at scale.
Those that are successful possess the ability to quickly design and deliver great customer outcomes. Aligned to this is the ability to make use of the sophisticated adaptive analytics found in many customers’ engagement platforms to automate, orchestrate, and personalise the experience across channels.
This article was originally published in the 2022 Australian Retail Outlook, powered by KPMG
