We all love to be recognized by the people and places we do business with. When a restaurant greeter sits us at our favorite table, the barista who knows our preferred brew (and can pronounce our names), or that hairdresser who always styles it just the way we like.
In today’s digital world, personalized marketing isn’t just a nice-to-have, it’s become critical to engaging customers and customer retention. It lets customers feel the business understands them and knows their wishes, and it builds a much-needed emotional attachment.
Your business is customer retention
There’s an adage that it’s five times more expensive to gain a customer than retain one — and some studies suggest it’s as much as 25 times as costly. While customer acquisition is obviously vital to ongoing business, customer retention is even more crucial to business success.
Without a strong customer base, your business can’t sustain revenue or grow. What’s more, it’s been proven that loyal customers buy more. Studies show that brands that keep just 5% more customers see up to a 95% increase in profits. At the same time, most businesses need to retain customers for 12 to 18 months to break even on the investment made to acquire them.
It’s easy to see why building and retaining customers is one of the most important things you can do for long-term business success.
The omnichannel customer journey
Today’s consumers are savvy, interacting with brands when, where and how they want across multiple touchpoints. A single customer journey might take them from their smartphone apps to web articles and ads, to a product landing page, to shopping portals and marketplaces, to the brick-and-mortar store and everywhere in between.
To create a unified experience for customers, these interactions cannot be siloed. No matter how the customer connects with the brand — traditional or digital or both — they must receive consistent information and experiences. Gaining competitive advantage today demands businesses develop a strategy in which customer-facing services, apps and teams work in unison to deliver the same customer-satisfying experience — everywhere.
Personalization plays an integral part in such an omnichannel strategy. Through it, customers enjoy tailored and frictionless brand experiences, agnostic of the channel, that feel designed just for them and are based on data collected throughout their unique journeys.
More important than ever
It would be an understatement to say today’s customers expect more. Personalization is one of the top things they demand. Take banking, two-thirds of customers expect their financial institutions to understand their unique needs and expectations, and more than half (52%) expect all offers to be personalized.
Nearly all marketers (98%) agree: personalization advances customer relationships.
The expectation is growing remarkably fast. In 2019, one quarter (25%) of American and Canadian consumers said they’ve stopped doing business with companies that did a poor job of personalization; today that number has climbed to 43%.
And today’s consumers aren’t expecting simple customization like name recognition. And without it, they’ll walk away. Two-thirds (66%) of consumers say encountering content that isn’t personalized would stop them from making a purchase.
Build trust. Grow revenue
It’s widely known that emotion plays a major role in purchase decisions. The need for validation is a significant one. Personalization achieves that, building trust and rapport with customers by demonstrating you understand their needs and interests.
For example, consumers are more than twice as likely (2.1x) to view personalized offers as important. Personalization both makes and saves money. Leaders in personalization find it drives between 5 and 15% in increased revenue and a 10 to 30% increase in marketing spend-efficiency.
Interactive personalized video (IPV) provides the bespoke experience customers expect in a powerful and engaging way that connects with them like face-to-face interactions. It helps build trust and transform them from customers into loyal brand advocates. And why wouldn’t it? People love video. It’s expected to make up 82% of all Internet traffic this year.
IPV meets today’s consumers where they live and can engage them across the entire customer journey.
As significant as the benefits of personalization are, the negative effects of lacking it, or using it poorly, may be even greater. Studies show 63% of consumers will stop buying from brands that use poor personalization tactics.
Customers not engaged through personalization tend to fall back on convenience and price when making purchase decisions. Where’s it cheapest? Who can get me it the fastest? Any new entrant into the market with a better deal or competitor with a flashy promotion can easily steal hard-won customers. A small price change could spell the end of a customer relationship. Churn may seem inevitable in some markets, but well-engaged customers tend to stay with their brands — yes, their brands — long-term.
To personalize or not? There’s no question
It’s become clear that successful brands personalize their content, marketing and customer interactions. Nearly all marketers (98%) agree: personalization advances customer relationships.
Personalization is the key to customer retention. It’s the key to building a community of enthusiastic brand advocates who feel good about their purchases and your brand and are compelled to grow your business through word-of-mouth. And video, where people spend much of their lives today, is one of the easiest and most powerful ways to do that.
Remember, today’s efforts in personalization are tomorrow’s revenue gains. You can’t afford to skip it. Your customers will spend more, share more and be more likely to stick with you through thick and thin.