Most newsletters are generic, that is, they are aimed at everyone without interesting anyone about anything. (Photo: Maxim Ilyahov for Unsplash)
GUEST BLOG. The subject of personalization is not new.
Mark Morin and I published a book on this topic in 2010. According to a recent study by the group McKinsey, it seems that customization is not just a wish, but a requirement from customers. And beware of companies that do not care.
A definition
What is personalization? Let’s just say it’s about offering the right advice, the right product to the right person at the right time, and sometimes in the right place.
To take an example understandable to all, I often say to stop trying to sell me shampoo. I’ve been bald since I was 18. I could say the same for baseball, hockey or any other sport. I have nothing against it, but it doesn’t interest me. That said, if you tell me about motorcycle rides, new restaurants or musician biographies, you will have my full attention.
Let’s also take the example of newsletters. My observation is that most of them are generic, that is to say that they are aimed at everyone without interesting anyone on anything. No wonder the open or read rate is so low. And that’s not to mention the starving conversion rate. It seems like some marketers haven’t grasped that mass communication is outdated, and has been for decades.
The feeling of being special, of being appreciated
Participants in the McKinsey study said they associate personalization with “a positive experience that makes them feel special.” This is what happens when a company moves from the transactional level to the relational level. I was talking about this in a previous post.
It is (very) easy for a customer to switch suppliers when the model is purely transactional, like “I search, I find, I buy” like at Amazon or Costco. It is certainly effective, but impersonal, therefore interchangeable. When a relationship is established, the bond between the customer and the company is stronger, therefore more resistant to the temptations offered by competitors.
Not just a wish, a requirement
Also according to the study, 71% of customers expect companies to interact with them personally. In fact, 76% of customers are frustrated when this expectation is not met. According to the report’s authors, “Customers don’t just want personalization, they demand it.”
I keep repeating it. Customers are more and more demanding and if we want to stay in the game, we cannot rule out customization. Let’s not forget that customers are spoiled for choice… often available in just a few clicks.
Marc Gobé, a specialist in emotional branding, wrote in 2009 in his book Emotional Branding “Customers today expect their brand to know them intimately and individually and to fully understand their needs.” Visionary in 2009, this statement became reality in 2022.
A direct impact on purchase, loyalty and recommendation
The McKinsey study also underlines the positive impact of personalization on the propensity to buy, to recommend a company to a third party and to buy again. Companies that manage to establish a “personal” relationship with their customers see their revenues grow faster than those of their competitors. And by how much? By 40%. It’s impressive!
Lack of personalization has a direct impact on customer retention. It’s as if after all these years as a customer, the supplier never recognizes you, or gives the impression of treating you like a number, one of many customers, like everyone else.
A study by JD Power had also identified in 2015 that one of the main sticking points in the banking sector was the offer of a generic service that does not take into account the customer’s history. I invite you to (re)read this post on loyalty.
Remember, if you break a customer’s emotional trust in you, you risk losing them forever, as you can read in this HBR text.
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In summary, be personal, be relevant. Stop talking to me about your brand. Tell me about me!
