Benefits of personalization: How merchants can maximize the power of data
Gone are the days of one-size-fits-all: Today’s consumers expect more than cookie-cutter customer service. They want businesses to break the mold, use their data and embrace personalization.
But what does that mean? How does it work? And, most importantly, how can your business benefit?
In this blog, we’ll answer these questions and explain why personalization can uplift your brand.
What is personalization?
Personalization is when businesses use data to tailor messages, products and services to a specific customer’s needs, behaviors and preferences. Rather than serving the same generic experience across the board, they provide a unique one to every individual.
As a merchant, this allows you to make customer interactions more meaningful. In fact, when researchers asked consumers to define personalization, most associated it with “positive experiences that made them feel special.”
Why does this matter? Because, quite simply, that’s what people want. According to McKinsey, 71% of consumers expect businesses to provide personalized experiences — and 76% are frustrated when brands don’t deliver.
Bottom line: Personalization is more important than ever before. Not only will it delight your patrons, but it can also help you turn the customer experience (CX) into a key competitive advantage.
How does personalization work?
Tailoring CX isn’t just about calling customers by their name. It’s about making them feel heard, seen, acknowledged and understood — and to do that, you need data.
Customer data is the fuel that makes personalization possible. When you learn information about your target audience, you can leverage those insights to your advantage. How? Here are a few examples:
- Personalized recommendations: This involves showing customers products relevant to their interests and purchase history. For instance, Spotify uses subscriber data to curate custom playlists.
- Tailored promotions: Instead of one-size-fits-all offers, you can send personalized promos to customers more likely to engage with your message.
- Dynamic pricing: You can also leverage data to offer targeted discounts, such as when someone visits your website for the first time.
You might wonder where you obtain customer data in the first place. The short answer is there are endless ways to collect information. But, one of the most effective is through your payment processing system. With the right solution — such as a point of sale (POS) or virtual terminal — you can collect and access data in one convenient place. Plus, technology integrations allow you to feed that data into marketing platforms and other business systems.
4 key benefits of personalization
Personalized customer service can have numerous advantages for your business. Let’s take a closer look at four of the most impactful:
1. Increased revenue
Most importantly, personalization boosts your bottom line. According to one study, businesses can achieve:
- Up to 50% drops in customer acquisition costs.
- 5-15% revenue lifts.
- 10-30% higher returns on marketing investment.
These benefits all boil down to customer experience. Personalization improves CX, and a positive CX can lead to a 15% boost in sales conversion rates. What’s even more powerful is that personalization can also generate higher average order values. Per Zendesk research, 90% of consumers are willing to spend more with brands that tailor their customer service experience.
2. Reduced customer churn
Imagine visiting your favorite coffee shop only to discover they no longer serve your go-to drink. That’s a disappointing scenario, but you might still return. Next time, you’re charged a hidden fee you weren’t expecting. And the next time? They get your order wrong.
Eventually, you might decide you’ve had enough — and in fact, most people would agree. Consider a few powerful statistics:
- 3 in 4 consumers say a bad interaction with a business can ruin their day.
- 73% say they’d switch to a competitor after multiple bad experiences.
- 61% of customers would switch after just a single bad interaction.
In other words, poor CX can significantly impact your brand image. Fortunately, personalization can salvage the relationship, if not improve it altogether. Going above and beyond to delight your customers with tailored recommendations, offers and experiences will help strengthen their bond with your brand.
Of course, stronger loyalty also has tangible business benefits. Repeat customers have a greater lifetime value, which means they’re more likely to spend more throughout their relationship with your company. Plus, retaining loyal customers is more cost-effective than acquiring new ones.
3. Better inventory management
Merchants working in the retail, restaurant or eCommerce industries know how important it is to avoid stockouts. Running out of an in-demand item can disappoint customers — and even worse, it costs you serious money.
Luckily, it’s easier to optimize inventory through personalization. In this case, you’re not necessarily personalizing the customer experience but using their data to improve it.
For example, analyzing customer data can shed light on preferences. You can also use these insights to forecast demand and stock levels more accurately. By understanding which products are in high demand among specific segments, you can ensure all the right items are available at the right time.
Moreover, you can adjust your product assortment and variety based on customer needs and then create personalized offers around these items. Plus, if items are in high demand or low supply, you can set pricing and discounts accordingly.
4. Stronger brand positioning
It pays to differentiate your brand from competitors, especially in a crowded marketplace. Personalization can help you do that by associating your business with excellent customer service.
It may not happen immediately, but eventually, customers will notice how much effort you put into their experience. And when they do? They’ll spread the word to friends and family, which can be a huge growth enabler for your business.
People are more likely to trust recommendations that come from close relationships, meaning they’ll be more willing to choose your business over others. Plus, free word-of-mouth advertising is a great way to increase brand awareness without breaking the bank.
Harnessing data with Sekure Payment Experts
Simply put, personalization is power. And, with an effective payment system, you can harness its maximum potential.
The only problem? Choosing the right solution isn’t easy. There are endless options to sort through, and you may not know which is best for your business. The good news is that we’re here to help.
At Sekure, our Payment Experts know payment processing inside and out. And, as your dedicated partner, we’ll learn your business, too. That way, we can recommend the exact systems and equipment you need to succeed — with all the bells and whistles to match.
We have exclusive partnerships with leading vendors, which means you’ll have access to the best tools in the industry. Better yet, our experts can show you how to set them up, collect data and personalize service at every opportunity.
Ready to get started? Contact our team today.
