The Power of Personalization: Strengthening Customer Loyalty

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Source: Twilio

The recent pullback in headcount and spending at technology companies has put a big dent in marketing team budgets. We’re seeing this impact spread beyond the tech sector, squeezing marketing spend across industries. At the same time, consumers are demanding more personalized experiences, which requires investment in better marketing approaches. How can you acquire new customers and build lifelong relationships with existing customers with the budget constraints many marketers are now facing? It looks like you’ll have to start thinking differently about the problem.


New global research
from Twilio surfaced the top strategies to drive growth, and both consumers and leading brands reported that personalization was paramount. Let’s look at how personalization can give you an edge by strengthening consumer loyalty.

Use real-time data insights to build rich customer profiles

Consumers expect communications from brands to be convenient, timely, and personalized to their needs. The only way to deliver on this is through data-driven digital engagement. When consumers shop online, text with your brand, or open marketing emails, you can gather insights from these interactions to build unified customer profiles. These paint a clear picture of each individual customer and their needs. Then, use these profiles to create personalized experiences for the customer. This kind of personalization—based on data gathered from direct interactions with the customer, or “first-party” data—pays off in the short and long term. In our research, customer engagement leaders who made these investments reported increased customer retention, conversion, and long-term loyalty, while six out of 10 companies report that investment in digital customer engagement improved their ability to meet changing customer needs.

Let’s look at an example. CrossFit, the global fitness brand, has an intensely loyal and engaged customer base. The company was collecting a significant amount of data and insights across its touchpoints with customers, but that data wasn’t being used to strengthen customer loyalty. Instead, the data was hidden away in silos. This was a big missed opportunity for CrossFit. Using Twilio Segment, CrossFit put this data to work to create real-time customer profiles, then used those profiles to support the individual needs of their athletes, coaches, and affiliate owners. With key insights into customers’ interests, CrossFit created more personalized experiences like virtual competition programs and local gym recommendations. These really hit the mark with CrossFit’s devoted athletes and coaches.

Personalization leads to lifelong customer loyalty

66% of consumers say they will stop using a brand if their experience is not personalized. Let’s talk about what personalization looks like and how it drives loyalty. Imagine a consumer shopping online for shoes. As the consumer browses the online store, the brand collects data for each page they visit and each pair of shoes they click on. Based on the colors, styles, and sizes the consumer is looking at, the brand can recommend more shoes the consumer might like. That sounds obvious from the consumer’s point of view, but the reality is that brands really struggle with this. Our research showed that there’s a gap between what consumers consider good personalization and what brands are delivering. It turns out that 46% of brands believe that they’re doing an excellent job providing personalization, but just 15% of consumers agree.

Activating the interaction data you’re collecting is key to closing this personalization gap. You have access to massive data lakes and data warehouses with huge volumes of customer data that can be used to personalize the customer experience. But it’s hard to put all that data together into a truly unified customer profile! This causes disjointed customer experiences—the kind we all hate because it feels inauthentic or that brands aren’t listening to us. When you successfully activate this data to create personalized experiences, you start building consumer loyalty. Imagine that the shopper buys the shoes you recommended, and you’re then able to immediately recommend other clothing items to complete an outfit. This kind of personalized experience keeps customers coming back: 86% of consumers say that personalized experiences increase their loyalty to brands, and they tend to spend an average of 21% more with brands that personalize.

Prioritize customer privacy

Twilio’s research shows that as consumer expectations for personalization rise, they start worrying more about privacy. Consumers have become increasingly uneasy when brands use third-party data, like relying on browser cookies from previously visited websites. Nearly one-third of consumers always or often reject cookies on websites, while nearly two-thirds (65%) of consumers say they’d prefer brands use only first-party data to personalize their experiences. Despite this, businesses are still holding onto their old ways of impersonal marketing. 81% of brands say they are still reliant on third-party data, even as they prepare for life without third-party cookies.

What should you do? Start using zero-party and first-party data to verify, authorize, and personalize customer interactions! This respects consumers’ privacy because zero-party data is information provided directly by consumers, and first-party data is collected from consumers’ behavior right on your own site. First-party data is now essential for brands that want to deliver high-quality customer engagement. Machine learning and AI models need accurate, real-time data, which can only come from these sources. By embracing zero- and first-party data, you build a digital bridge between you and your customers.

It all comes down to data

Let’s look at an example of a brand that’s doing a great job building customer relationships by collecting better data. Sanofi is one of the world’s largest healthcare companies. They’re activating real-time insights to deliver better, more valuable interactions. Using Twilio Segment’s customer data platform, Sanofi created a single, unified view of the customer using online and offline customer data from multiple sources. They used these “golden profiles” to build targeted, omni-channel campaigns for their healthcare provider customers. Sanofi’s old approach meant it took more than three days to activate customer data. Now, Sanofi can activate data in less than three hours—a 95% reduction in turnaround time. Sanofi can educate their healthcare providers more quickly about medications and treatments, improving patient outcomes.

Let’s sum it up. Consumers are demanding personalization, and they also want us to respect their privacy. Build your customer engagement strategy around real-time, zero, and first-party data. Activate this data to create more personalized interactions that deliver more value. The result will be greater lifetime customer loyalty.

Glenn Weinstein
As Chief Customer Officer, Glenn represents the voice of the customer within Twilio. He is responsible for overseeing the Customer Support, Professional Services, Solutions Engineering, and Developer Network teams. Before Twilio, Glenn was co-founder of Appirio, a leading cloud consultancy and top global partner of Salesforce, Workday, and Google, and he has also led consulting and support teams at numerous public software companies.

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