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What Customers Expect Out of Their Digital Experience There's a key competitive differentiator in customer experience, and here's what you need to know about it.

By Asim Zaheer Edited by Kara McIntyre

entrepreneur daily

Opinions expressed by Entrepreneur contributors are their own.

Customer needs evolve at a breakneck pace in the digital world. When the pandemic pushed companies to complete their digital transformation, brands focused heavily on addressing technical weaknesses and eliminating friction on digital platforms. A seamless digital journey was once a differentiator for businesses, but now it is a requirement — a baseline necessity. A total of 90% of customers expect a seamless experience regardless of where the touchpoint is taking place.

To gain a true competitive edge in today's environment, digital businesses need to elevate their customer journeys to prioritize personalized experiences. Personalization is the next customer experience "must-have" that will define 2022 and 2023. In the past two years, 73% of businesses have increased personalization efforts in their customer experiences.

Why do customers expect a personalized experience? What can businesses do to effectively deliver personalization, and what are the consequences if they don't? Read on to learn how to get personal with customers.

Related: The Future is 'Phygital': What Customer Experience Experts Need to Know

Consumers now expect a personalized experience

Customers want to be seen as more than a transaction: They want to build a relationship with a brand and they expect that brand to cater to their specific preferences.

According to a recent McKinsey & Company study, 71% of customers expect companies to deliver personalized interactions, and 76% get frustrated when they don't receive a personalized experience. Multiple studies have demonstrated the consequences of not properly tailoring and curating the customer experience — the majority of consumers reported that they may not purchase from a retailer if the brand gets personalization wrong.

Customers believe that personalization enhances their experience with businesses. Customers are more likely to convert, engage with messaging and recommend brands that offer personalized experiences.

Personalization has become so meaningful to customers that nearly three-quarters of consumers appreciate that businesses use personal information to make their shopping experience more relevant — as long as their personal data is not externally compromised. As regulations tighten and data privacy sensitivities heighten, this encouragement is note-worthy.

Understanding evolving customer preferences and expectations, businesses must rise to the occasion and provide personalized touch points throughout the holistic customer journey. Ultimately, every customer interaction should be personalized.

Related: The Dos and Don'ts of Dealing With Consumers in the Digital Space

How to use data to drive personalization

Every brand's journey to successful personalization begins with data. In order to tailor the digital experience to each customer, businesses first need to understand who that customer is. A customer's background, preferences, purchase history, name, location and more can all inform personal interactions.

Companies must think of personalization holistically and cohesively–most customers are interacting with brands across channels and expect to be catered to regardless of whether they're logging in on their computer or mobile device.

A holistic approach to personalization requires a personalized approach to data collection and analysis. Digital experience intelligence (DXI) platforms capture and analyze 100% of customer interactions across the end-to-end digital journey. Powered by AI, DXI can sort through millions of data points in minutes to provide actionable insights. Not only is this essential to maintaining a seamless digital platform–it immediately alerts teams to technical errors and anomalies — but DXI can also be a valuable tool in accelerating personalization.

The customer data collected and analyzed by DXI platforms can be used to implement personal, tailored touch points across platforms, while also measuring the success and engagement of each touch point. This data is invaluable, allowing teams to collaborate with agility since they are using a single source of truth. Personalization on digital platforms is most effective when engineers, merchandising professionals, UX designers, IT, sales teams and marketing experts are all working closely together.

The right data tools can also help solve some of businesses' biggest hurdles to personalizing the customer experience–data management and data analytics. A total of 67% of retailers report that their greatest personalization challenge is the gathering, integration and synthesis of customer data.

If a company is overwhelmed at the idea of personalizing every interaction, it should start small with a few impactful moments (selected using existing customer data), then scale to full personalization over time. The more data a business uses when growing personalization, the greater its returns.

Related: 4 Customer Experience Trends Your Business Needs to Consider

What do consumers want from their personalized experience?

Customers want to be recognized by the businesses they buy from. They expect the brands to know them and know their interests. In the aforementioned McKinsey & Company study, when consumers were asked to define personalization, respondents said that they "associate it with positive experiences of being made to feel special."

Examples of positive personalized touch points in the digital experience include:

  • Hyper-local in-stock information at stores close to the customer
  • Relevant product/service recommendations based on purchase/browsing history and demographics
  • Communications addressed specifically to the customer
  • Special attention/onboarding after first-time purchase
  • Targeted promotions
  • Celebrating a customer's milestones
  • Checking in post-purchase

Related: Why a 'Personal' Customer Experience Is Critical to Your Business' Success

The businesses benefits of crafting a personalized experience

Personalization can increase revenue, drive customer loyalty and accelerate growth. Companies that prioritize personalized digital experiences are far more likely to grow rapidly compared to companies that don't.

According to one report, 86% of consumers say personalization plays a role in their purchasing decisions. Personalization efforts increase customer satisfaction rates and engagement. Customers are more likely to buy from companies with personal touch points, and more likely to return and purchase again later on. When implemented successfully, personalized customer journeys reduce sales and marketing costs by 10-20%

Competitive advantage now lies in a business' ability to evolve their customer experience to be personalized. Brands must innovate new ways to make their customers feel special and build relationships with each person who converts.

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