Hi Team,

Personalisation (or personalization for the Americans in the room 😉) seems to be the new buzz word across CX experts in 2024.

But is it actually that important to customers?

To answer this question, Medallia ran a piece of research in August 2023, surveying 2000 consumers to get their perspective on the importance of personalised experiences.

Below, I break down the most interesting insights which came out of the research 👇

Research From Medallia: Do personalised experiences ACTUALLY matter to customers?

Interested in reading the full report? Click here.

Prefer that I do all of the heavy lifting so you can just skim through the six key takeaways? Continue reading …

Disclaimer: Whilst the stats have all been produced by Medallia, the additional commentary & interpretation of the findings is my own.

Takeaway #1 - Majority of customers will spend more if their level of service is customised to meet their specific needs

6 out of every 10 respondents acknowledged that they will spend more if the experience they have is customised.

Whilst this indicates that the majority of customers do agree that personalisation is critical, there is still a sizeable minority who don’t see a connection between personalisation and spend.

The following findings will dig into this further …

Takeaway #2 - Customers do not believe that personalisation is necessary for EVERY situation

As per the below visual, 82% of customers say that personalised experiences drive their choice of brand in at least HALF of shopping situations.

Whilst this statistic demonstrates that personalisation is important, it also highlights the need to be selective as to when personalisation is delivered …

This finding is reinforced by another statistic where only 53% of customers agreed ghat personalisation should be used in “most or all interactions” …

The obvious next question is - When should companies think about personalisation?

The next finding can perhaps assist in answering this question 👇

Takeaway #3 - The level of personalisation expected by customers differs by industry

In the below visual, Medallia asked customers to respond to the following questions:

• How satisfied were you with your most recent interaction with [company]?

• How personalised did your most recent interaction with [company] feel?

What became evident is how the level of personalisation impacts customer satisfaction quite differently depending on the industry.

This is likely due to the fact that customer expectations for personalisation in certain industries is higher than others. If those expectations aren’t met, it will lead to a lower level of satisfaction.

For example:

• Media / Telecommunications - Customers within this industry reported the lowest level of personalisation (21%) AND the lowest level of satisfaction. This demonstrates how customers have higher expectations for personalisation, however these expectations are not being met.
  

• Retail - Customers within the retail industry reported the second lowest level of personalisation (22%) but reported a satisfaction level which was 15% higher that Media / Telco. A similar trend was observed in the Restaurant industry. The reason behind this is likely due to the lower expectations that retail customers have - they typically see these experiences as transactional which do not warrant any form of personalisation.

My point?

For industries where customers have high expectations of personalisation, it’s critical to deliver on this promise.

For industries where expectation levels are lower, delivering personalisation is a great way to surprise & delight your customers. Use it sparingly but know that it’s going to create a memorable moment in their mind!

Takeaway #4 - Customers have provided 7 clear recommendations on what they expect from a personalised experience

The below visual is worth it’s megabyte size in gold. It depicts what customers expect when they think about a personalised experience.

If you were to share one visual with others in your organisation as a reminder as to what great CX looks like, this should be it:

For those who would prefer to read the visual in plain language, the 7 elements of personalisation that customers claim to the largest positive effect on their experience include:

1. CONSISTENT DISCUSSIONS - Not having to explain their situation again when transferred to a new customer service agent
   

2. SURPRISE & DELIGHT - Recognition / rewards / exclusive treatment for being a loyal customer
   

3. EMPATHY - Forgiveness / understanding for late payments & returns
   

4. PROACTIVE CX - Proactively notifying the customer when an issue is detected e.g. stuck on a certain page, account locked, late delivery
   

5. INTELLIGENT SEARCHING - Intuitive search functions on the website to allow the customer to filter for whatever they want
   

6. HUMAN TOUCH - Addressing the customer by their name in communications
   

7. TAILORED DIGITAL EXPERIENCES - Unique account profiles for individual customers, separate from the rest of the household

Fortunately, none of these requests are outlandish.

Takeaway #5 - Whilst customers see the need for “individualisation”, they aren’t willing to waste their time updating their preferences

The below visual looks at the proportion of customers who expressed concern with the suggested approaches to improve personalisation.

My interpretation?

• Customers are still weary of how effective AI-personalisation will be
  

• Customers all believe that they are individuals and subsequently do not like the concept of being “segmented” into different age groups or demographic buckets
  

• Customers aren’t willing to divulge any more information than they already have unless there’s some form of benefit in it for them

So - what do customers think the benefit of providing more information should be?

Takeaway #6 - Majority of customers would be willing to share more information with organisations if they received a financial reward

I’ve said this before and I’ll say it again - customers are starting to expect an ROI from sharing their data.

Unfortunately, this ROI hasn’t come to fruition and I subsequently think it is highly likely that customers will start demanding to be compensated for sharing their data in the near future.

I find the concept of providing micro-payments to customers for their data (maybe via the blockchain) incredibly intriguing. It will shift the power away from the large corporations (like Facebook & Google) and back to the consumer.

Imagine a world where marketing teams pay consumers directly to advertise to them. This concept is something I call decentralised marketing, and it will cut out the middle men (e.g. Facebook & Google).

For the savvy entrepreneur, there’s a business idea somewhere in there!

Wrapping things up …

From my perspective, this research demonstrated that personalisation is still in demand however customers acknowledge that it is not required across every industry, and for every interaction.

Additionally, the level of “personalisation” that customers expect isn’t groundbreaking. They want you to know their situation, and call them by their name and maybe once so often, deliver a “WOW” moment by giving them a call on their birthday.

Finally, this concept of financially rewarding customers for their time & information seems to be generating momentum. If this eventuates, it’s going to be a significant shift in power to the consumer and could change the way that customers interact with brands forever.

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