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Stop doing segmentation and start doing individualization

Posted by Alejandro Durán on 2/13/20 10:42 AM

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A prominent presentation not long ago, Brendan Witcher, Senior Analyst at Forrester Research Inc, at a New York Summit on "hot" marketing topics today and I want to share them with you.

According to Witcher, customer expectations are set whenever they are exposed to a better shopping experience. And not only are they looking at each other among direct competitors, but all their brand experiences are being compared, whether they're with a bank, a government entity, or a fashion store.

Marketers recognize the importance of being able to meet these expectations or to be able to exceed them and many are investing in new technologies to achieve those experiences more than their competence.

A Forrester report shows that 72% of companies consider improving the customer experience a priority, and 63% are prioritizing higher technology investments to help achieve their goals.

Of course, actions speak louder than words. And while many of the marketers say they are working on improving the customer experience, consumer behavior suggests otherwise.

Another Forrester report shows that 68% of consumers say it is unlikely to return to a website that does not provide the customer with a satisfactory experience. It also showed that only 7% of consumers receiving offers by email were valued (relevant) below 9% in 2015. "Customers expect relevance, that they understand and know their tastes and needs," Witcher said.

"They don't want to receive messages from unnamed, faceless companies out there. They want emails from someone who understands them."

The creation of experiences that adapt to the needs and preferences of customers has been the great objective of every marketer. As Witcher said, "Great customization doesn't really seem to be personalizing ... but rather a great experience."

However, for many companies, the customization capabilities have not been entirely personal. First, marketers had segmentation, which fulfilled their purpose given the technology available in the past, now companies are at a time when they do not need to depend on segmentation, except in situations where they know very little about the customer. "We can do things better today," he said. As the evolution continues, Witcher says marketers now need to rely on individualization.

Forrester defines this business strategy as "experiences that use customer data to structure interaction, functionality, and content about the needs of individual customers."

According to Witcher, all individualization strategies contain 4 elements:

  1. Identify customers and treat them as segments one by one based on their profile data.
  2. Have customer data evaluated in real time to dynamically identify intent.
  3. Have custom content delivered equally across all channels and screens (since customers don't change simply because devices change).
  4. And have the data repositories centralized and the technologies integrated to enable richer relevant experiences.

Some marks are already moving in this direction. Witcher cited Neiman Marcus and clothing brand Acustom as two living examples of individual experiences.

As for brands that want to emulate their success, Witcher suggests starting slowly and starting it with an evolution, not a revolution. Here 5 your suggestions to help organizations do just that:

  1. Identify gaps in the company's ability to deliver individualization:

    One of the best inhibitors of individualization is reliance on customization tactics, and a lack of investment in the right technologies. Change can be frightening, and Witcher knows that marketers don't supply. Therefore, they are advised to dedicate their time, energy and resources to identify what will impact the customer experience to the fullest and how they can better identify customers' intent to deliver the individualization they want.
  2. Consider every part of the Customer Journey.

    Marketing not the only department that affects the customer experience. Sales, IT, customer service, play a role, too. It is important for marketers to break silos and work with multiple departments to ensure that the customer has a transparent experience. In addition, they should be prepared to perform tasks that extend outside of their traditional marketing role.
  3. Design each point of contact to capture and leverage customer data.

    Marketers can't create individualized experiences if they don't know who they're talking to. That's why Witcher says it's vitally important for marketers to take advantage of the opportunities they have to learn more about their customers. "They have to become a customer-obsessed organization and realize that they can't deliver great customer experiences if they don't understand the customer's needs," he said. "Too many organizations today focus on what they mean to the customer rather than what the customer wants to hear from them."
  4. Focus on creating great customer experiences and not over-customizing.

    Marketers have to prove that they are exchanging customer data for value and that this is perceived by the customer.
  5. Leverage digital partnerships.

    Look at those brands that do what you do (or want to do) but better. Witcher suggests partnering with them, through co-branding for example.

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Tags: Data Management