Who doesn`t enjoy finding a chocolate on their pillow when they turn in at a hotel far from home? Or being recognised by a shopkeeper or shop attendant at an infrequently visited establishment? It`s all part of what makes us tick; what makes us unique as creatures. We enjoy the experience of being set apart from other people, especially when we spend a lot of money with the establishment.
Technology is simulating the relationships companies were once able to maintain with their customers.
Doug Leather, CEO, Knowledge Factor
There once was a time when we really did enjoy the most personal experience possible. We seldom journeyed beyond the constraints of our neighbourhoods, and in such a constrained universe, everyone knew everyone. Personal, even intimate service was the norm, especially from savvy shopkeepers who understood that customers want to be recognised and rewarded.
Enter mass marketing with its particular dictates, requirements and pressures. Exit the personal touch. It was widely accepted, pretty much by everyone in business, that mass production and marketing meant the end of the ability to remain in touch with customers on an individual basis.
Now, technology has restored the ability to maintain close relationships. In effect, technology is simulating the relationships companies were once able to maintain with their customers.
As discussed in previous Industry Insights, every aspect of an intimate relationship with a customer is mandated by the ability to identify all customers correctly and uniquely, differentiate them by value and need, interact accordingly, and customise offerings in line with differing value and need.
As a consequence of this approach, different customers experience a company differently.
Let`s look at how some customers are actually experiencing personalisation in action:
- . British Airways is able to recall the magazines, drinks, meals and sleeping requirements of its highest-value customers. Accordingly, it can offer these items proactively the next time they fly.
- . The Ackergill Tower, a 15th century castle in Caithness, Scotland, offers visitors the deepest level of personalised service. As a consequence, repeat business runs at 80% each year, and referral business between 10% and 15%. Marketing has been rendered all but unnecessary. With just 25 bedrooms, it`s possible to get up close and personal: after each customer`s visit, staff learn a little more about their preferences, from meals to drinks to favourite leisure activities.
- . BMW North America has found that prospective car buyers who interact with the company before purchase are up to three times more likely to become buyers than those found from other sources. Accordingly, BMW is deepening its knowledge of prospective customers so as to create learning relationships, and personalising the way in which it interacts with these prospective buyers. This can be through e-mail, direct mail or a personal invitation to attend a special event. Over a period of time, BMW learns enough about the potential customer`s needs and preferences, key for turning prospects into customers. On closure of a sale, BMW deepens the relationship through a number of customer intimacy mechanisms.
- . Amazon.com was held up as the first major example of a company which had cracked the challenge of personalisation: indeed, many credit CEO Jeff Bezos with inventing the technique, and of intuitively understanding that gathering information online, learning about customers in real-time, and using this information to enhance the relationship and drive profits was a major competitive advantage.
Wherever you look, you`ll find persuasive evidence that, done properly, personalisation returns handsome dividends. For instance, the US-based Personalization Consortium reports in a survey that 56% of respondents are more likely to purchase from a site that allows personalisation, and 63% are more likely to register at a site that allows personalisation or content customisation.
The flipside: 87% of people surveyed are annoyed when a site asks for the same information more than once. This is a profound insight: how can an organisation say it cares about me when it cannot even recall the most basic information about me? How can I believe anything it says subsequently? Personalisation is one of the most valuable and profitable exercises on which you can embark: if you have laid the foundation correctly. In subsequent Industry Insights, I`ll look at some essential techniques for ensuring successful personalisation.
* Doug Leather is CEO of Knowledge Factory, a company in the JSE-listed Primedia group.
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