the secret ingredient of impactful personalization: customer feedback · 2020-04-16 · izing...
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The Secret Ingredient of Impactful Personalization: Customer Feedback
MEDALLIA.COM 2
Personalization is no longer just a buzzword or a
“nice-to-have” confined to marketing outreach.
Nowadays, to survive in a rapidly changing
world, customer-facing brands must put data-
driven personalized experiences along the entire
customer journey at the core of their strategy.
Those that do will not only survive, but thrive.
By helping numerous businesses optimize their
customer interactions, Medallia has found that
brands that create personalized experiences can
increase their customer experience scores by
up to 150 percent. They can also increase their
revenue two to three times faster than those that
do not personalize experiences.
3 key ingredients of personalization: know your customer, leverage the right customer data and take actionThe demand for personalization is growing.
A recent study suggests that customer
expectations for personalized experiences will
increase approximately three times from 2017
to 2020. So what is driving the demand for
personalized experiences? First, technological
progress and omnichannel business initiatives
have succeeded in opening up a vast landscape
of choice for consumers, and free movement
across channels. Customers need brands to
proactively help them navigate the shopping
experience in a way that best suits them.
Second, more than ever before, customers
expect companies to know who they are,
their preferences, and what experiences they
have had in the past. Third, customers are
progressively shifting from a desire to spend
money on goods to a desire to spend money on
experiences. In fact, customers increasingly seek
out “experiential” interactions where the journey
of engaging with the brand is a pleasure in itself.
But how can businesses meet these customer
expectations? We find that successful person-
alization requires three key ingredients: brands
need to have thought about who their customers
are, have the right data to support this thinking,
and take action to tailor experiences for
customers based on that data. The key here is
data, and specifically customer feedback data.
Next level personalization with customer feedback Personalization along the entire customer
journey requires better data than ever before. It
is no longer enough to know who a customer is
and what they have purchased in the past.
Customer experience feedback–data collected
from surveys, social media, and conversations
with customers–offers several fundamental
advantages over other types of data driving
personalization:
• It enables targeted action when tied to spe-
cific people, contexts, and touch points along
the customer journey
• It facilitates data-driven testing and innova-
tion as businesses can listen, act, and gauge
consumer reactions in real time
The impact of personalization on ecommerce
shopping experiences
Non-Purchasersincrease in
Net Promoter Score (NPS) of 75% to
150%
Purchasersincrease in NPS
of 15% to
35%
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• Understand how to meaningfully segment
their customers based on patterns in what
different groups of customers say about
their experiences. For example, feedback may
show that millennial customers experience
a digital interaction very differently from
Generation Z customers, leading the company
to recognize the value of analyzing these
two generational groups, previously lumped
together, as distinct markets with different
personalization needs.
• Design experiences, products, and services
tailored to the wants and needs of customer
segments they most value. For example,
feedback may reveal that new customers who
call a contact center place the most value on
agents spending ample time in explaining and
onboarding, while existing customers’ satis-
faction is most heavily influenced by speed
of issue resolution, leading the company to
design a separate support experience for each
group.
• Accelerate innovation and quickly gauge its
impact by customer segment. For example,
a retailer may test new smart fitting room
technology and use feedback to immediately
gauge shoppers’ reactions by gender identity,
customer loyalty tier, or annual spend, and
tailor rollout of the technology to best serve
the most valued customer segments.
Liberty Global, a large international telecom
provider, uses insights from customer survey
comments to understand meaningful differences
in the experiences of customers in different
product segments, and to more effectively tailor
experiences to each group. For example, the
company found that the overall satisfaction of
wifi customers was most strongly affected by
service reliability, and the overall satisfaction of
mobile customers was most strongly affected by
pricing. Armed with these insights, Liberty
Global improved messaging and product offer-
ings for each of these customer segments.
• It digs deep into customer comments to
uncover consumer thoughts and feelings that
empower brands to create emotional impact
that drives decision making, loyalty, and
self-perception
Three types of personalization fueled by feedback
Here we look briefly at three types of person-
alization, fueled by different types of data,
and discuss the role of customer feedback in
each: segmented, situational and individual
personalization.
1. Segmented personalization:
DESIGNING GREAT EXPERIENCES ACROSS
CUSTOMER SEGMENTS
Customer feedback provides segmentation
data such as demographic, behavioral, and
psychographic characteristics (e.g., millennials
vs. boomers, loyalty vs. non-loyalty members,
mobile vs. wifi customers) and empowers orga-
nizations to:
Segmentedpersonalization
Situationalpersonalization
Individual personalization
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2. Situational personalization:
ADAPTING TO CUSTOMERS IN ALL
SITUATIONS
Customer feedback provides deeper insights
into what is happening in the world around
customers (e.g., a weather event, bugs on the
company website, or the impact of holiday store
staffing levels), and how to react in a way that
makes customers feel understood and valued. It
enables organizations to:
• Quickly identify and resolve challenges
their customers are facing out in the field.
For example, an automotive company is
alerted about specific equipment issues by
surges in the frequency of particular keywords
or topics emerging in customer survey com-
ments, and thus takes personalized action to
mitigate negative impact for all potentially
affected customers.
• Understand how best to serve customers in
particular times, places, and contexts. For
example, a hotel brand may notice that certain
customer feedback topics, such as demand
for poolside sunscreen and bottled water,
surge during heat waves and thus proac-
tively meets those customer needs when the
forecast indicates hot weather is on the way.
Following a series of Colorado wildfires, USAA
used customer survey feedback to optimize the
claims process during crisis situations. Feedback
showed that members were frustrated with the
often months-long process of inventory and
assessment to get their insurance payments
following catastrophic events. Recognizing
an opportunity to make changes that would
provide more personalized experiences to
customers in challenging situations, USAA
changed the claims process. It gave customers
the option to receive 80 percent of the esti-
mated value of their personal property without
having to spend months inventorying all of their
belongings, and began using drones to assess
the scope of property damage, thereby acceler-
ating the adjustment process. Not surprisingly,
this innovation created an enormous value for
USAA and its customers, resulting in quicker
claims processing, lower labor costs and better
customer experience overall.
3. The end goal:
INDIVIDUAL PERSONALIZATION WITH
CUSTOMER FEEDBACK
While segmented and situational personalization
address large groups of people with something
in common, the challenge is to focus that infor-
mation down to create an experience that feels
tailored to the individual. At a basic level, human
interaction is the oldest and often the most
effective form of individualized personalization:
the friendly neighborhood grocer, the proactive
B2B account manager, the long-time family tax
advisor, and the empathetic store associate who
asks questions and talks a customer through
product features.
Feedback plays an important role in indi-
vidualizing experiences by enabling even large
organizations to listen to a customer, know them
as an individual across multiple interactions,
and create powerful emotional experiences. By
engaging in a two-way dialogue with customers,
brands empower the consumer – their most
Feedback plays a key role in individualizing experiences by enabling organizations to listen to a customer, know them as an individual across interactions, and create powerful emotional experiences
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valuable asset – with a voice that informs
product, services, and customer experience
decisions. This feedback-informed personaliza-
tion can pay rich rewards for the company, as
well. In a recent study conducted in collabo-
ration with the Stanford Graduate School of
Business, the Medallia Institute found that referral
campaigns with personalized messages for each
individual customer were 12 times more effective
at driving referrals than generic messages. The
act of asking for feedback not only strengthens
a brand’s relationship with its existing clientele,
but creates personalized experiences that drive
loyalty and advocacy.
The most powerful act of individual personaliza-
tion from feedback is that of closing the loop,
or an employee reaching out to a customer in
response to a piece of feedback. At Apple, store
managers call every detractor within 24 hours in
order to fix the issue or learn from their experi-
ence. A study found that this dialogue pays off.
Every hour spent calling detractors generates
more than $1,000 in customer lifetime revenue
or, a total of $25 million in additional sales every
year at Apple.
The barriers on the journey to further individual-
izing personalization, in a systematic way, are
largely technical. Advances in real-time access
to data, AI, and predictive analytics will lead to
new levels of individualization in the way brands
engage with their customers.
Personalization is about seeing the world from
the customer’s perspective and creating the
experiences they want. In an omnichannel world
The most powerful act of individual personalization from feedback is that of closing the loop
RECOMMENDATIONS
Companies that want to effectively personalize their customers' experiences should leverage customer feedback in the following ways:
Segmented Personalization
• Capture segmentation data and tie it to customer feedback
• Sort feedback by segmentation data, and compare satisfaction across char-acteristics and segments
• Test innovations by changing and modi-fying survey questions, and sampling specific groups
Situational Personalization
• Tie feedback to a particular time, place, or channel
• Identify emergent situations by surfac-ing topic and sentiment in written comments
• Highlight changes in customer experi-ence through reporting such as custom dashboards or push notifications
• Track and share best practice actions related to situations and contexts
Individual Personalization
• Tie feedback to individuals, ideally across multiple interactions
• Empower employees to access and act on feedback in the moment through intuitive reporting, analytics, and mobile access
• Close the loop with individual customers based on the feedback they have provided
of freedom and choice, brands must know and
proactively guide their customers. Feedback is
the ultimate fuel to create such personalized
experiences. Companies must ensure they are
capturing feedback and empowering individuals
and the organization as a whole to take action
based on what their customers want and need.
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Noah Rolff
Noah Rolff is Retail Principal and Director of Customer Marketing at Medallia. Prior to
coming to Medallia, Noah worked as a management consultant and led international
development projects in Latin America and Asia-Pacific. He has an MBA from the
UCLA Anderson School of Management, an MPhil from the University of Cambridge,
and a BA from UC Berkeley.
Emma Sopadjieva
Emma Sopadjieva is a senior manager of research & analytics in Medallia’s CX Strategy
Research group. Prior to coming to Medallia, she was a consultant for over five years
in Deloitte’s Financial Advisory practices in the US, the UK, and Spain. She has an MA
in international economics and management from the School of Global Policy and
Strategy at UCSD, and a BS in business administration and management from Bucknell
University.
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customer experience. Medallia Institute findings are regularly published in respected business and academic journals.
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