CX Personalization: Why It's Important And How To Deliver It

Reposted from TechTarget. Authored by George Lawton | Journalist and Jonathan Bordoli | Technical Project Manager

Customers no longer tolerate irrelevant emails and advertisements. Instead, they expect brands to understand and anticipate their needs, then tailor their experiences to them. That's why personalization is often a make-or-break factor in customer experience.

What is a personalized customer experience?

Customer experience personalization is about designing products and services to meet customers' individual needs and matching them with those offerings.

Brands can implement targeted advertisements when they understand customers, including their previous buying trends and demographic data points, such as age, gender, income level, race, employment, location, homeownership and level of education. Demographic data can encompass all characteristics of the buyer, including preferences, hobbies and lifestyle choices.

Why is a personalized customer experience important?

In an increasingly commoditized world, a brand's CX -- rather than its product or service -- is the differentiator. If at least two suppliers have the same or a similar offering, then organizations must strive to deliver superior CX. A customer's experience strongly influences brand loyalty, which then influences customer retention. Personalization serves as a key part of the customer experience to differentiate businesses from competitors as well as to both attract and retain customers.

Common pitfalls of personalization efforts

While personalization can benefit both customers and businesses, it also brings forth a handful of challenges. Those include the following:

• Poor data quality. The quality of customer data defines the effectiveness of the personalization. The best data comes directly from the customer, according to Colson Hillier, CMO at Alorica, a business process outsourcing consultancy. This data includes buying patterns, preferences and interests. If the information is not from reliable sources or comes from a third-party vendor, it can be misguided or completely off target.

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