Customer experience and personalization — benefits, best practices, and examples

Personalization is no longer a suggestion for businesses that want to offer a great customer experience — it’s required to stay competitive. Consumers now expect completely personalized experiences when engaging with brands — and if they don’t get them, they’re increasingly likely to take their business elsewhere.

You probably already know that personalization is an essential part of the customer experience (CX). But you need to understand what personalization really means, the ways it directly benefits the customer experience, and how your business can start using personalized CX today.

Whether you’re already dabbling in personalization or starting from scratch, you may be wondering how to make it a more integral part of your overall CX. This guide will help you learn the ins and outs of personalization and build your own personalization strategy based on best practices.

This article will cover the following:

• What is personalized customer experience?
• The benefits of customer experience personalization
• Common personalization roadblocks
• Building your personalization strategy
• Best practices for personalized customer experiences
• Examples of great personalized customer experience
• How to get started with customer experience personalization

What is personalized customer experience?

Personalized customer experience refers to providing a specific, tailored experience to each customer through messaging, offers, recommendations, and more. It treats customers as individuals with unique preferences and tastes rather than part of a general audience or even a segment. The key to successful personalization is customizing the entire customer journey rather than simply providing a generic set of product recommendations or an engagement email.

Personalization works by leveraging customer information to adapt the experience at every stage of the journey, which in some cases provides an experience wholly unique to each person. It can consist of anything from a special landing page based on location data to product recommendations based on buying history to a one-on-one consultation.

The benefits of customer experience personalization

One of the most important benefits of personalized CX is that it increases customer satisfaction and loyalty. Making a customer feel important and valued is a great way to turn them into a repeat buyer, and personalization is perfectly designed to do that. According to an Adobe Commerce survey, 67% of consumers say they want personalized offers based on their individual spending habits, whether they’re shopping online or in store. Nailing personalization is an opportunity to meet and exceed expectations.

Personalization also builds trust by showing you care about the customer, and they can have confidence in you to support their needs. Repeat on-target personalization is a quick and effective way to build brand trust and loyalty.

In addition, personalization increases engagement. Tailoring any point of contact along the customer journey directly to individuals makes them more likely to interact with it. For example, one benchmark report found a 139% increase in click rate for personalized emails compared with static, one-time sends.

The result of this engagement, along with the increased customer lifetime value that comes from building trust and loyalty, is a higher return on investment. It also helps you gain new customers. According to a McKinsey study, 76% of consumers are more likely to purchase from a company that personalizes.

Common roadblocks to personalization

Many businesses today are just starting to personalize, and they face some common challenges in implementing a full personalization strategy. Here are a few of the hurdles you’re likely to encounter on the road to personalized CX.

Data gathering and analysis

The hardest part of creating personalized customer experiences for most businesses is collecting and preparing the right data. This can be difficult due to technological limitations, customers not wanting to share their data, or a lack of expertise among your employees. Analyzing all that data can also be difficult without the right tools or analysts.

Outdated technology

If your data platform is out of date, you’ll likely have issues centralizing the information, analyzing it in a timely way, or even gathering enough data in the first place. Similar issues may arise if you don’t have a good personalization solution. You’ll likely need a modern platform to keep up with the level of personalization that customers have come to expect.

Company management silos

If your business is siloed or convoluted when it comes to data management or approvals, it will be hard to use data easily or work through the entire customer experience. And if different parts of the company manage different parts of the experience, you’ll need to find a way for them to work together to create a cohesive, personalized experience.

Building your personalization strategy

The key to succeeding in customer experience personalization is to create a strategy and stick to it. These steps will help you design the right strategy for your business.

1. Identify who your customers are and what they want

The first step is to pinpoint who your customers are and what they want from personalization. Customer personas are a good place to start, including demographic characteristics, interests, and buying behaviors. Create several personas to capture the variety of people your business attracts.

In addition to what products or services your customers want, think about how they want to receive information and attention. If you’re a major retailer, for example, product recommendations and personalized emails will likely be important to your customers, while boutique shoppers may want one-on-one experiences or fully personalized fashion consultations. Whatever the case, you need to understand your customers’ expectations before you can meet and exceed them.

2. Take stock of your customer journey

Next, create a complete customer journey map for each customer persona as it interacts with your brand. If you already have customer data, comb through it for trends and take note of which elements of your existing CX perform best.

Look for touchpoints where you could offer personalized recommendations, and be sure to pay attention to how and when customers move across channels as they progress through the journey. Figure out where customers are likely to want to go next from certain stages and determine how you can guide them using personalized content.

3. Define important personalization criteria

Before you can personalize customer experiences, you need data. Ask yourself what type of data will be most helpful to inform your personalization efforts. Your ideal data will depend on your business needs and your industry, but a few of the most common types of collected data include:

• Customer location
• Demographics
• Behavior on site
• Purchase history
• On-site search history

Once you’ve defined the information that would be most useful for targeting your customers, start gathering it from them in a non-intrusive, transparent way. In addition to surveys, think creatively about other ways you can collect information. For example, if you’re offering a health-related product, you might ask customers about their eating habits, exercise routine, or environmental factors, allowing you not only to personalize the product they’re purchasing, but also inform future personalization efforts.

Product quizzes that deliver recommendations based on customers’ answers, such as quizzes about personal clothing style, also generate useful information. And proactive customer service or online chat prompts can help you understand what questions or problems customers encounter at different stages of their journey.

4. Ensure quality in data processing

Bad data can ruin even the best-planned personalization efforts, so check that your existing technology and collection methods are working properly. If possible, centralize your data for easier use. This may involve negotiating permissions and information-sharing among different teams, modifying your company structure, or creating a separate and cross-functional team focused on personalization that includes employees with a variety of different skills.

In addition to the right data, make sure you also have the right analytics tools to turn all that data into insights that can inform your personalization tactics. Ideally, consider investing in a solution that can handle personalization at scale and empower you to get the most out of your data.

5. Segment your audience

With your data management processes in place, you’re finally ready to segment your audience and lay the groundwork for personalized customer experiences. Separate your customers into groups by location, gender, age, familiarity with your brand, stage of the customer journey, and other characteristics relevant to your business.

This step is key to giving you flexibility in your personalization because it allows you to consider what types of recommendations or communications would be most appropriate for each audience. Then — within each segment — you can further refine and personalize the experience for individual customers.

6. Begin personalization

Once you’ve taken these preparatory steps, you have the strategic information you need. Now it’s time to turn it into a tactical plan and start executing. Begin by deciding what content you want to personalize and how it will change depending on the customer and their history. Next, make a list of each channel you want to use, as well as a detailed plan for how and when content on each channel will be delivered in a personalized way.

Consider how you want to craft the experience for maximum impact, convenience, and customer satisfaction, and produce any creative assets that might be required. You might want to start small — for example, with personalized product recommendations at checkout and in confirmation emails, then assess how that’s working before adding additional recommendations on product pages or a survey requesting additional information.

7. Collect feedback and optimize

No large-scale personalization effort is ever perfect and complete. Consider it a work in progress and ask for feedback from customers. You can do this through links to surveys on product pages or at checkout, and you can also analyze customer service interactions for patterns.

Look at your analytics to determine which recommendations were most successful and at what points in the customer journey. The key is to constantly explore ways to optimize your entire process for improvement.

Best practices for personalized customer experiences

Creating and implementing your personalization strategy is just the beginning. The personalized experiences you provide and the way your customers respond will supply you with more data about them, allowing you to become more sophisticated and creative over time.

The following best practices can help you build on what you already have to further enhance your personalization efforts.

Provide relevant content

When it comes to personalization, customers want content that is immediately relevant to them. They should feel like they’re getting a unique experience, even if they’re not. But that doesn’t mean you have to personalize everything — you just have to personalize the right things. Customizing CX elements that your audience isn’t going to interact with is a waste of time and money, so focus on the information that matters most to them at the right moment.

Go omnichannel

To create a consistent, personalized CX, coordinate your efforts across all channels, including digital ones like websites, social media, and email, as well as physical channels like print marketing and in-person experiences. If your omnichannel strategy is working correctly, every touchpoint should be personalized and customer information should be shared across channels in real time.

Customers are likely to move between channels at any time — for example, from email or social media to your website, or from in-store shopping to an online purchase — so ensure their experience is seamless and make it easy for them to pick up right where they left off.

Capture more data than you need

The more data you have about a customer, the better you can serve them. While there is certain data you should start with, like location or buying behavior, you never know when you’ll need a different data point to further personalize the customer experience.

Most customers are willing to offer their information if they know they’re getting great service in return. According to Accenture, 83% said they would share their personal data to enable a personalized experience. Be creative in asking for different kinds of data through quizzes or surveys that provide immediate value in the form of recommendations or tailored products, and then let that data guide your future efforts.

Micro-segmentation

Micro-segmentation takes targeting a step further by personalizing for individual customers instead of audience segments. This allows for extremely relevant content. An example of micro-segmentation is using a customer’s account information and history to provide them with specific recommendations based on what they have bought. Rather than telling customers, “People like you also buy this,” a micro-segmentation strategy could say, “You might be interested in this because you bought or looked at this other product.”

Allow customers to self-personalize

Sometimes the easiest way to personalize is to let customers do it themselves. Allow them to adjust site settings and choose which types of content are most important to them — and then pay attention to what you learn from their choices. Forums and self-service knowledge bases also allow customers to take their experiences into their own hands.

Use AI and automation

Artificial intelligence (AI) and automation make it possible to provide real-time CX personalization. AI captures on-the-fly insights and translates them into up-to-date personalized experiences. If you want to do large-scale personalization efforts, AI — or at least an algorithm — is a must. Automation helps parse large amounts of data, complete repetitive tasks, and avoid human error.

Personalize your customer service

One part of the customer experience that is sometimes overlooked is customer service. Given that people so often complain about customer service, however, it may offer the best opportunity to improve and increase customer satisfaction with their overall experience.

Make sure you offer multiple customer service channels so individuals can find the channel they’re most comfortable with. Apply personalization tactics to this part of the journey too. In particular, give service representatives access to all customer information and history in one place so they can quickly take care of any issues, whether over the phone or via live chat.

Always continue learning

Catering to every single person that interacts with your business is challenging, and you’re bound to encounter difficult issues. Take those issues in stride and use them as an opportunity to improve your personalized CX by constantly looking for customer feedback to better refine and optimize your efforts. Above all, don’t get complacent — personalization is always evolving, and new ways to personalize customer experiences arise constantly.

Examples of great personalized customer experience

While most businesses are still in the early stages of personalization, some major retailers are paving the way with high-level, innovative strategies. Here are two top examples to give you inspiration and ideas.

Amazon

Amazon is often cited as the leader in online customer experience personalization, and for good reason. The company offers incredibly detailed personalized product recommendations based on the wealth of data it gathers from multiple touchpoints, using advanced analytics to help customers find what they’re looking for — and what they didn’t yet know they were looking for — at every turn.

From Amazon Prime Video and Amazon Music to Amazon Prime Wardrobe, the company is continuously expanding its avenues for personalized experiences, which in turn allows it to learn even more about customers and inform even more personally tailored messages.

Nike

One of the top athletic apparel and footwear brands in the world, Nike has thoroughly embraced personalization by giving customers the ability to design and buy their own shoes through a 3D online platform.

The company’s personalization strategy is truly omnichannel, extending to physical locations and the Nike+ loyalty program, which offers benefits like reservations for in-store pickup and an instant checkout option that allows customers to use their own devices to skip the checkout line in the store.

Getting started with customer experience personalization

Personalized customer experiences increase engagement and ROI. But just as importantly, they forge stronger relationships with your customers that will boost your business for years to come.

When you’re ready to get started with personalization, begin by identifying your audience and outlining your customer journey. This will inform the type of data you need to collect and the tactics you choose to reach customers with individualized messaging.

Adobe Experience Platform makes real-time, personalized customer experiences possible by stitching together customer data from every interaction through every channel in real time. Together with Adobe Target, a personalization solution that uses A/B and multivariate testing to deliver the right experiences to every single customer at scale, the platform helps you deliver sophisticated experiences with precision.

To learn how Adobe can help you create richer personalized experiences, watch the Adobe Experience Platform story or an overview video of Adobe Target.