Personalization 4.0: Treat customers like ravens
Bernd Heinrich is one of the observer scientists. In The Raven's Mind, Heinrich looks at ravens with whom he has spent a great deal of time. In an impromprovised awiarium in a private forest in the U.S. state of Maine, he kept up to twenty individuals at a time. Thanks to this, he learned a great deal about these extremely intelligent beings. Heinrich, as a racial scientist, did not hypothesize about what ravens feel. He just watched and meticulously recorded what they were doing.
The same should be said of a modern marketer. In the world of data-driven marketing, we do not guess what the customer wants, we only closely observe his behavior. To do this, we need detailed data – evidence of what it actually does, not declarations.
Data from the heart or receipt
Every marketer's dream is a full data suit, allowing you to determine who bought the product, when, and what convinced the customer to buy. The greater the relevance of the data, the better opportunities to build activation (promotions, personalized offers), create a brand image, profile the marketing message.
Marketers now collect data in two ways, each with advantages and disadvantages. In the first model, they obtain hard transaction data, most often from cash registers and payment terminals. This allows them to analyze their customers' shopping carts by tracking, for example, co-purchasing product categories, brands, product variants, and sales breakdowns by weekday, hour, or day of the month. However, they lack the characteristics of the hero (the person behind the receipt) to be able to model and design communication.
The second way is to obtain soft data, i.e. to get to know the consumer through in-depth interviews and the opinions he issues in questionnaires. Thanks to them, we can get to know our client better, his preferences, lifestyle, desires and needs. The paradox is that qualitative research is difficult and tedious. It is estimated that 98% of customer feedback and needs do not reach managers. In addition to the fact that employees, by distraction, or even intentionally, do not pass suggestions to managers, the clients themselves are not too willing to spend time completing complex surveys. In addition, it is usually a collection of declarations, even if they flow straight from the heart. There is no evidence of real involvement, confirmed by proof of purchase. In other words, every research formula lacks some kind of puzzle.
New Game: Personalization 4.0
Until now, no broader solution has been used to combine hard and soft data. Why? Not that business didn't care. Combining these two ways of research has not yet paid off. But until then.
The customization bar rises every year. It's no longer enough to just ask questions based on customer databases. The low level of personalization does not provide a reliable answer to the question of what (how and why) your customers buy. And that, according to pareta principle, 80% of profits come from 20% of customers, stopping buyers of products or services takes on a new, greater importance in times of increased uncertainty when the customer watches every dollar. Reducing the percentage of customer resignation by 5% can increase profits by 25-125%. In addition, the probability that the current customer will buy from you is 60-70%, and the new one – only 5-20%.
Heinrich's rings helped to observe the ravens. With dedication, he climbed tall trees to ring raven chicks. He then tracked the radio signals to find out where they were and were preying. Marketers have an easier task. Every consumer carries a smartphone with them today, and apps in it. It is thanks to technology that hyperpersonalization based on customer voice listening (VoC) is possible. The use of data on a single unit allows you to direct a message directly to it, also using bots and voice assistants. And it pays off a lot. There are studies that show what personalization of communication gives – an increase in communication efficiency by up to 400%.
It's already working!
Dubai's pioneering Happiness Matters solution is the world's first real-time camera to study residents' moods. The device performs two functions. On the one hand, it draws information from individuals about the quality of their life in the city and, on the other hand, allows each resident to prepare a maximum personalized offer in the context of the city and its services.
The Polish Blovly solution, on the other hand, is a platform for mass, personalized two-way communication between brands and customers. It solves, among other things, the problem of effective collection of feedback without having to persuade customers to fill out satisfaction forms. Blovly's proprietary AI-based natural language and processing solutions increase feedback management efficiency by up to 10 times and enable two-way brand-to-customer communication. In addition, the algorithm suggests the most tailored occasions to customers, being something like a virtual "personal shopper".
The future of personalization
Ethnologist Daniel Miller believes that shopping is a ritual practice, but oriented towards others. It combines shopping with the theory of love – the customer buys to ensure safety or to express love. Knowing who the customer is, we can not only tailor topics and areas to his preferences, but also see if what we offer him likes. Creating a customer experience is an upward trend, in a while co-creation of the experience will be expected. It is all the more important to understand at the lowest possible level, close to man, who we are dealing with.
Personalization of the future will be based on the most secretive needs that our smartphone will analyze. A competitive advantage can be built with simple improvements, but these conclusions come from listening attentively to the customer's voice.
- Author: Marta Smyrska