Why the customer experience needs to be personalized

Today’s savvy consumers have high expectations for customer service—and little patience for businesses that don’t meet them. According to some studies, 80% of retailers believe they deliver a superior customer experience, but only 8% of customers agree. In other words, many businesses are not delivering on expectations and are losing out on a lot of opportunities. This is especially true when it comes to customer service personalization.

Digitally savvy consumers are getting accustomed to personal and relevant recommendations, for instance through Amazon.com. The brick-and-mortar experience is getting better in some ways, but still falling very short on customer service, and how to personalize it. Sales associates don’t know who their customers are, their needs or preferences, which makes every store visit generic for the customer. Why is this a problem? Turns out, the customer service is a retailers nr.1 tool in building customer loyalty and making sales in-store. In addition, bad customer experiences mean a loss of potential revenue for the retailer, and lost potential customer loyalty.

How the problem is created, and issues that arises

It is a big challenge for businesses that when a customer is entering the store the customer experience and relationship has to be built from scratch, and the customer often feels that the customer service is not always addressing the real needs. The business doesn’t have any information about the customer at hand and are therefore forced to create the same generic experiences. This results in too little authenticity in the customer relationships, and the experiences and loyalty has to be recreated every time.

Benefits of modernizing it

Research shows that delivering superior customer service not only increases sales and revenue, but also increases conversion and retention, as well as growing the loyal customer base. Sales employees can better meet the customers’ needs and deliver better results for the retailer. Getting to the right recommendations and products also increases the average basket size and spending in store. There is a clear correlation between top and bottom line performance and the size of the loyal customer base.

On average, a 5% increase in the loyal customer base can increase profit per customer by between 25% to 100%. This can have a major effect on the retailer’s performance.

How to modernize it

Retailers can leverage insights of the customer and patterns from previous visits and send relevant insights that the store associates can use when helping the customer. This elevates the experience for the customer, and make each visit unique and personalized. It also makes each visit more relevant for the customer and richer than the previous one.

By gaining access to the customers’ recent purchases, preferences, spending range and more, the employees can personalize the customer service and deliver a tailored experience. This has already happened across digital platforms with loyalty programs, purchase history through e-commerce sites, and targeted advertisement. Now, brick-and-mortars has to follow.


Author: Øistien Sonstad, Proxloop CEO

Also published on Medium.

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