Hyper-personalisation: What’s next for the evolution of customer engagement

By Rikard af Sandeberg, Director, Product Management & Marketing Nordics

In the digital age, the path to customer engagement is a difficult and complex one for businesses to tread. With time-poor customers faced with a proliferation of choice and bombarded with marketing messages across multiple channels, they are looking to be reassured that they are making the right choice in brands and businesses to support their everyday lives.

The power of peer-to-peer in this process cannot be underestimated. Neilsen’s Global Trust In Advertising report found 84% of consumers trust recommendations from their family and friends and are also more likely to take action and start interacting with the brand they have been advised to explore. Crucially, the report found consumers are more likely to listen to their peers than be swayed by advertising campaigns.

In such a competitive climate, how can businesses stand out – and what does the future hold for customer engagement?

The journey so far

In the 1980s and 1990s, Customer Relationship Management (CRM) technology, or a company’s own database system, underpinned the way organisations stored and managed their customer data. This technology was functional; it ensured that employees knew who they were talking to, and could access the necessary details of the person on the other end of the line. But the digital revolution of the past decade has transformed customer’s expectations of the service and experience they receive.

Yesterday’s loyalty programmes were simply product and offer driven. Customers were rewarded based on purchases made and how long they’d used the company. Data was segmented to some degree but there was no such thing as multi-channel delivery and personalisation was basic at best.

People today are tech-savvy and multi-connected; using a variety of devices and platforms to suit their needs. To succeed, businesses have had to evaluate and evolve the interactions they offer via every channel, so they can move towards a more sophisticated, intuitive and personalised relationship with their customers.  They now expect real-time responses with minimal effort, and access to relevant rewards and immersive experiences that have been personalised to a segment of one. They expect you to understand them and have no time for untargeted, irrelevant offers.

The path to hyper-personalisation

The access to rich customer data, aggregated across multiple touch points, means businesses have never had more insight into their customers’ behaviour, wants and needs. But data is only valuable if it can be gathered and interpreted in the right way – and used to fuel personalised propositions which can drive engagement and lead to loyalty. The data needs to be clean.

The rise of sophisticated data-driven marketing has enabled brands to target consumers with relevant, engaging messages at opportune moments that are more likely to elicit conversion and interest than the blanket email communications of old.

Customer-facing industries across the board are realising the importance of enhancing the experience they offer people. In the recent whitepaper “Know Your Customer. Solve Their Problem” by One Connected Community, Taj Samal, Head of Digital Solutions at RBS, stated:

“Personalisation is vital in building trust and is a real differentiator. Over the next five years there’ll be a much greater emphasis on generating trust through real personalisation. For that you must truly understand what works for your customer.”

Challenger bank Atom is leading the way for personalisation in the UK, as it allows its customers to choose a logo, name and colours to make their app experience truly unique and personal to them.

Personalisation is an area gaining particularly momentum in the retail industry.  Research by marketing technology specialist Qubit and PwC revealed 50 per cent of consumers enjoy receiving product recommendations that chimed with their interests or preferences, while 49 per cent say they are willing to share their preferences with a business in order to receive a better shopping experience.

Amazon’s platform is a prime example of this (pun intended); with its “frequently brought together” and “customers who bought this item also bought” prompts incentivising customers to spend more.

And it’s reaping rewards for the e-commerce giant; a report by McKinsey estimates 35 per cent of Amazon’s consumer purchases come from product recommendations based on such algorithms.

Learning from the best

Next generation engagement is about non-monetary rewards and a seamless experience that’s both on and offline.

A great example is O2, which has earned itself a reputation as a trailblazer for personalisation in Europe. The telco provider offers its customers targeted, exclusive offers and discounts to sporting/music events, restaurants and other lifestyle experiences via its Priority and Reward programmes. Of particular note is O2’s social media campaign, #FollowTheRabbit, which consumers follow on social channels to spot early offers and exclusive competitions.

The net effect is customers become social media ambassadors as they use and share the hashtag across their own channels – therefore maximising the brand reach of the provider. This level of advocacy from your own customers is invaluable in the age of peer-to-peer social communities.

Future-proofing customer engagement

There has been a significant shift in the way businesses interact with, and meet the needs of their customers in recent years. The pace of technology shows no sign of abating; meaning companies will have to continue to work hard to both keep up with the competition and meet consumers’ expectations.

At the heart of modern customer engagement lies personalisation, and marketing strategies must be fuelled by the smart gathering and interpretation of data which enables businesses to truly understand their customers and offer valuable, highly relevant communications which build a relationship between the person and the business.

No longer is it enough to just know your customer’s birthday. The next stage for customer engagement is to know the ages of their children, their favourite sports teams, where they like to go on holiday, how active they are on social media. Only then can they offer rewards and experiences that are truly built for them.

With customers more empowered and autonomous than ever before, organisations must lay the foundations for an engagement strategy built around meeting, and exceeding, their expectations.