Click the play button above to listen to the blog.
Think about a local bakery in your neighborhood (if you’re lucky enough to have one). What does a small business like that do better than other businesses? If we had to pick one thing (apart from freshly baked goods), it’d be personalized customer service.
Thanks to their lower sales volumes, small businesses can easily get to know who their customers are and what they want. Maybe the owner greets you by name. Maybe a sales associate even remembers what you’ve bought before and can recommend other things you’ll like.
This kind of service makes a difference, and people want that experience when they interact with companies.
First, let’s take a look at the nuts and bolts.
What is personalized customer service?
Personalized customer service is a marketing technique that helps you tailor your communication with each customer, either during direct interactions or when sending out individualized messaging. A customer service approach that is personalized essentially means an agent "knows" the customer they're talking to because of collected data.
For example, the local baker may know you like sugar-free cookies, so they may tell you they have a fresh batch coming out in a few minutes.
But how can this experience be transferred to high growth environments, B2B, or the digital world?
There are many ways as it turns out. A very common one is by using automatic product recommendations. For instance, Amazon has various personalized elements in their site like “People who bought this product, also bought these products”, “Inspired by your shopping trends” or other tailored lists.
Even simply using your customer’s name in automated promotional emails (done easily with software like MailChimp or Hubspot) adds an element of personalization. And emails are a great tool for personalization in general. In fact, by some reports, personalized emails deliver six times higher transaction rates.
So, personalization can take many forms and there are different processes running on the backend for each tactic. For example, personalization may be:
- Persona or segment-based. This kind of personalized customer service is driven by segmentation and development of buyer personas. You don’t directly cater to each individual customer, but you are trying to predict their preferences based on what you know of their persona or segment. This may include location, industry, job title, characteristics, needs, purchase intent, and more. You can use this approach in both emails and your website to present curated content.
- Automated individualization. The example from Amazon is a result of automated, real-time data collection, based on the activity of the customer’s profile. In this case, there’s an algorithm running in the background that draws from information that is specific to the customer, e.g. who they are, their contact details, and search history. Product offerings, personalized coupons based on past purchases, personalized homepage promotions or shopping cart recommendations can all be made for the specific customer.
- Personal. For example, if your customer support team uses software that allows them to see previous interactions from customers who reach out, they can directly talk to customers and say things like “Oh, I can see you’ve had this issue before, let’s try a more permanent fix.” This is the most personal personalization (yes, we said that) you can get.
Why should I personalize customer service?
Personalized customer service isn’t just a favor you can do for your customers. Done right, it may be what differentiates you from your competitors. In a 2020 study, 97 percent of marketers surveyed reported a measurable lift to their business outcomes from their personalization efforts.
Here are some positive business outcomes that stem from personalized customer service:
- Better customer relationships. Personalization builds trust – it shows customers you care about who they are and what they want out of their experience with your brand.
- Higher customer retention. From trust comes loyalty. Customers who know you have their best interests at heart are more likely to stay with you.
- Increased sales. If your prospective customers get relevant content, support, and product offerings from you, it’s more likely they’ll give you a chance to delight them. In fact, 40 percent of U.S. consumers say they have purchased something more expensive than they originally planned to because their experience was personalized.
- Increase conversions. Even if a customer doesn’t buy immediately, it’s still important to encourage them to take actions that move them through the customer journey.
- Better data for the future. Personalization demands efficient data collection and analysis (more on that later). This means you’ll be better placed to identify trends and modify your products or operations accordingly.
With all these benefits, there’s no doubt personalized customer service is here to stay. In fact, it’s fast becoming the norm. And it’s those who do it right that stand to reap the benefits.
Personalization gone wrong
“Do it right” really is the operative phrase. Sometimes, things just don’t work out as intended.
One amusing example of useless personalization was described in a viral tweet by British author Jacqueline Rayner regarding Amazon’s insistence on recommending her new toilet seats – even after she had already bought one.
This example shows that data analysis can give you a glimpse into behavior a consumer has demonstrated, but not necessarily help you understand their intentions or future preferences. You may have bought a three-tiered cake from the bakery for your 10th-anniversary party, but that doesn’t mean you’re going to be buying another any time soon – so the baker will not make a sale by suggesting more of these cakes to you.
It’s important to find ways to filter out irrelevant information and make sure you actually provide value to your customers.
Another example of personalized service that doesn’t work is when you simply don’t pay enough attention to customer segments. For example – and this is a true story – if you blast promotional emails advertising discounts to every customer you have, but those discounts only apply to local customers, you’re not going to generate sales from international ones – on the contrary, you may even lose customers out of frustration.
How to improve personalized customer service
To make sure personalization actually brings the value it’s supposed to, here are seven tips to help you refine your efforts:
1. Understand your audience
You can’t personalize effectively if you don’t understand your target audiences and the psychology of customer service.
The first step is to analyze data from your customers (found in your CRM, customer engagement platforms, social media, etc.) and settle on the most important buyer personas.
This is key because individual personalization isn’t always time-efficient in large numbers. It isn’t always possible to have offerings that cater to each and every one of your customers specifically. You can however predict customer preferences by discovering patterns and segmenting your audiences. That’s why segmentation should come first, and then you can start taking steps to individualize as much as possible based on what you know about your customers.
Different customer analytics give you the insights you need. Choose what you want to analyze and use technology to do it right. And then, you can proactively offer better and more personalized customer service. For example, if you discover that repeat customers ask the same questions about specific products, you could create knowledge base articles or FAQs that answer these questions.
2. Be fully omnichannel
A key component of personalization in customer service is to know your customers’ interaction history across all communication channels – in other words, to offer omnichannel service.
Imagine, for example, that a customer support agent receives an email from a customer about an issue, which they then help them resolve. Some time later, the customer calls in with the same issue, but this time another agent picks it up. In this case, having a system in place that allows the agent to see that it’s a recurring issue will not only provide the agent with context, it may also help solve the issue quicker. And, it’ll show the customer that your company cares about their specific communication history.
Solutions that offer a unified view of all interactions across channels help you achieve omnichannel and personalized service. Conversations become more targeted and relevant, since agents see what customers have previously asked about or what content they’ve searched for.
3. Call them by their name
As we mentioned, using your customer’s first name in promotional emails is good practice. But, you can go way beyond that. With the appropriate use of tech, you can find the best moments to connect with your customers, too.
One good example is to offer small discounts on your customers’ birthdays. Or, if you’re in B2B, you can send relevant case studies to prospects depending on how much you know about their use case. Even sending individualized messages after negative experiences (e.g. apology emails) helps show that you care.
On that note, your sales practices should always include personalization where possible. Make sure your team members do appropriate research before sending cold emails or doing discovery calls. Avoid generic emails that can be seen as spam, but make sure you actually speak to the customer’s particular challenges and offer them solutions.
4. Take advantage of rising tech
Using advanced tech in personalization is important. Reportedly, organizations have been ramping up their usage of machine-learning and algorithmic personalization over the past years, from 26 percent in 2018 to 40 percent in 2019 to 46 percent in 2020.
A big part of that is using conversational AI to answer questions and offer tailored product recommendations. Chatbots, for example, are able to collect data and analyze them to understand what each customer might be interested in. They can then pop up while the customer is browsing and offer to show them relevant items or to check inventory.
This also works with content – if a site visitor browses certain blog posts and then returns to the site some other time, the chatbot is able to make relevant recommendations or try to gather feedback.
And, many chatbots are able to send personalized notifications about services your customers use. Chatbots in telecom, for example, can inform users about their text allowance, while chatbots in banking can send alerts when account balances drop below certain limits. Look for the potential to implement this kind of personalization no matter what industry you’re in.
See more about how chatbots can work wonders for your brand.
5. Provide choices (but don’t overdo it)
Everyone wants to have different options to choose from so they can find what best suits them.
For example, you should recommend three to four products rather than just one. In B2B, you should offer three to four pricing plans tailored towards different buying needs, as opposed to a flat fee for everyone. And make sure you provide all possible customer support options, from knowledge base to email to social media to live chat, so your customers can use what suits them best.
But, make sure that there aren’t so many options that customers find it hard to choose. Accenture sums it up nicely: “The endless aisle sounds great until you are the one having to walk down it.”
And this is where data collection will help you achieve the right personalized customer service – by allowing you to narrow down options based on what your customers need.
6. Respect privacy
Personalized customer service is only possible when customers agree to share their data with you. Despite widespread concerns about data collection and privacy, 83 percent of customers are willing to share their data to enable a personalized experience. But, here’s the thing: they expect transparency and they are unlikely to tolerate you using or collecting their data without their knowledge.
In the European Union, privacy laws like GDPR already provide guidelines about how you can build trust with consumers regarding the processing of their data. But even if you’re not bound by such laws, it’s important to find ways to tell customers what data of theirs you collect and what you’re going to do with it. And, you should also make sure you protect that data with proper security systems.
For example, you can easily add a pop-up window informing customers about your terms and conditions and what data you collect. Or a consent box when you collect email addresses. You can provide clear links to your privacy policies in email communications or through your website. Having these assets available helps build trust with your customers.
And, keep in mind that there are personalization techniques that customers find “creepy” – most notably, using their specific location to offer them deals (e.g. sending texts when someone walks by a store). Try to avoid these practices. Martha Mathers, former managing vice president at Gartner, said:
“Brands need to be extremely thoughtful in how they personalize their content today. Instead of utilizing every piece of customer data available, brands should focus on showing customers you can help them first, then layering in the right balance of data to boost message relevance, without making things too personal.”
7. Just be human
The busy schedule of many professionals may leave them simply going through the motions when it comes to interacting with customers. This is understandable, but it can have a negative impact on how customers see your brand. If you don’t convince them you’re personable and care about them, they won’t stay loyal for long.
So, try to build a culture of open communication. Help your team be open, teach them to introduce themselves by name when talking to customers and to show empathy. Customer support should put themselves in the customer’s shoes, and sales should focus on providing personalized solutions instead of pushing for deals.
In the end, personalized customer service means embracing the fact that the interactions between customers and companies are basically human communication. We all make mistakes, and we may not have all the answers all the time – but what’s important is to treat everyone as a person instead of a dollar sign.