Create Emotional Connections With Your Customers Using Data

emotional connections

Much has been said about retail disruption, personalization, chatbots, and AI, with headline after headline enlightening the topic trends of the moment. Yes, we all know that mobile is the primary device when it comes to planning your marketing strategy; that the retail industry needs to evolve to keep up with the e-commerce giants; that the so-called industry 4.0 is the real thing; that personalization is the only feature that matters.

All these trends are clear markers of that simple truth we all know: customer preferences are changing so fast that it’s hard to predict or anticipate them these days. We can’t say which brands or products will shine in the next years with a soaring demand, nor which ones will lose ground.

Today, customer engagement requires innovative, specific, personalized experiences, and companies often strive to satisfy their needs. Following trends is dangerous: in the very moment you find a focus on a particular trend, it is likely already passed. You must learn to anticipate trends, create them starting from the knowledge you have right now.

Furthermore, traditional customer segmentation has become difficult and ineffective. Old-school data profiling is inadequate to illustrate the specific characteristics of the buyer personas, due to its broadness and non-specificity. Hard data, such as location, age, gender, or even interests, are not sufficiently distinct to portray a person’s profile and his behavioral patterns effectively.

Today, customers are accustomed to weekly product turnover, monthly technology updates, on-demand streaming services, on the moment news, and automated customer support: everything is available everywhere, at any time.

How can we expect our customers to stand still enough to let us detect their needs, design a solution, and provide it at our convenience? Even broaden concepts like sustainability or privacy compliance, considered as evergreen trends, are not always reliable in the mid or long term. One season it’s all about life-long garments made of organic cotton and the next one everyone wants that 10$-plastic-trendy shoes.

Now, imagine being introduced to this buyer persona: a young male, located in New York, with a lot of different interests - from sports to technology and music -, who spends around 70$ per month for discretionary activities.

How can you tell whether he is interested in taking insurance coverage / taking part in a guided tour through the mountains, rather than exploring new cities on a self-organized trip? How can you predict if he would prefer a long, descriptive written content, rather than a chart, to delineate the advantages of your service?

Traditional profiling can easily become a false friend: it gives the idea that you are gaining knowledge, while you are actually focusing on generic data and missing the real key to the heart of the single person. There are just too many variables among customers to pretend that using only a little part of them might be enough to predict their behavior.

And so what?

So, it is necessary to gain a deep, valuable, holistic understanding of who your customer is as a person and what he/she expects from you in terms of feelings, emotions, and experiences.

Customer loyalty is all about experiences. Offering high-quality products is important but delivering relevant experiences that resonate with the inner feelings of the recipient is essential. Thus, brands need to achieve a profound knowledge of their customers, investigating the key elements that provide the basis to establish meaningful bonds.

These elements are the personal characteristics that are stable across time and situations; the ones that determine the attitude and approach towards life and everyday choices, such as personality traits, values, and beliefs.

For example, the ideal buyer persona for insurance providers tends to be someone who has a high-risk aversion and an external locus of control rather than someone who is more prone to bear ambiguous situations and usually feels in control of his life.

More, someone who has a strong inclination towards adventures and spontaneity would prefer a self-organized, backpacked trip, while a person in the same socio-demographic sector, but with strong values of security, familiarity, and ease will probably pick a guided tour, with scheduled times and activities.

Communication messages need to be tailored to the recipients characteristics and their attitude towards information: not everyone copes and assimilates data similarly, and these differences need to be taken into great consideration.

Another example: people with a high need for cognition need to deepen the search for precise information to form an accurate opinion, while those with an inclination towards affection absorb emotional appeals better.

These few examples provide the necessary understanding of the individual differences that occur between people, not regarding socio-demographic or behavioral data, but concerning other aspects that have long been ignored.

Today, the state of technologies grants us the opportunity to identify, isolate and use this information to provide better experiences to our customers. Are you willing to gain this deeper understanding and stay on top of your customers’ desires?

 

Photo by Federico Beccari on Unsplash

 

 

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How the DCX Can Improve Customer Lifetime Value

customer lifetime value

Today, customer retention is gaining attention in business. The importance of customer satisfaction, loyalty, and repurchasing behavior is becoming central. The focus has shifted from customer acquisition to customer retention marketing, due to the recognition of its primary relevance.

It is a matter of fact that acquiring new customers is important, but not at the expenses of the ones that already exist. There are plenty of statistics about the massive impact that customer retention can have on business value. Nurturing the relationship with customers, in order to gain their loyalty and advocacy, and watch them coming back over and over, is the main purpose every Brand should pursue.

Therefore, even among those silos that are focused on numbers and sales, the concern shifted to the value of retention. Despite the fact that acquisitions have always held more weight, and metrics were chosen to examine the revenue of new purchases, today there is a better way to measure business success: customer lifetime value.

 

WHAT IS CLV AND WHY IS SO IMPORTANT

In order to get a better understanding of the value of customers, rather than using metrics such as Return On Investment (ROI), companies should choose Customer Lifetime Value (CLV).
ROI measures the gain and loss generated on an investment, within a specific period of time; otherwise, CLV measures the revenue brought by one customer throughout the course of all the interactions with the company.

The main fault of ROI is that it gives a short-sighted business perspective: the concept of “return” requires to set the time by which you want to measure the net profit of your investment. On the contrary, CLV measures the entire value of a lifetime relationship between brand and customer, shifting to a long-term perspective.

Furthermore, Return On Investment considers only the amount of profit gained, regardless of the meaning of specific, different interactions. Repurchasing behavior, positive word of mouth or any action of searching, posting or talking about brands value as much as the return of selling products, or even more.

Switching from an acquisition- to a retention-oriented business strategy requires a different mindset: rather than giving value to consumers based on the amount of their first transaction, brands should measure the cumulative profit provided by customers during the entire duration of their relationship with the company.

 

HOW CX CAN IMPROVE CLV

How can companies accomplish the purpose of cultivating long-lasting relationships, in order to increase Customer Lifetime Value? Focusing on customer experience.
First of all, companies should consider the overall journey of customers. Looking at the bigger picture they can identify the weaknesses and work across functional areas to replace the causes of dissatisfaction and discomfort.

Moreover, concentrating on the relationship, rather than on single interactions, they can cultivate emotional bonds, based on trust, dependability, and reliability. That is the basic requirement of relationship marketing: providing relevant experiences that delight, satisfy, and engage every person, connecting/resonating with their inner meanings.

The first step to the extent of building a strong reputation of the company is to work on the customer touchpoints. The growing area of conversational support, provided by chatbots and messaging tools is opening to new patterns. Due to advances in Artificial Intelligence, machine learning and natural language technologies, Brands can engage customers with personalized and helpful communication.

This kind of “conversational commerce” is growing up quickly, as long as it provides a continuum thread between companies and people, offering the chance to add value to every part of the customer journey. People can search for information, receive support, get personalized recommendations, chat with the company representative, read reviews and click to purchase, without even leaving the messaging app.

Among all the benefits provided by AI, personalization is the feature that best helps companies improve the customer experience. AI technologies let brands easier target specific market segments and provide personalization at scale, using the data gathered by behavior-based algorithms and predictive analytics.

Delivering the best customer experience throughout all the touchpoints allows customers to achieve the highest levels of satisfaction and loyalty - the starting point to create a solid bond between brands and people.

Just as much as customers have started to choose value over price, companies should consider enhancing the worth of the relationships they establish with people: Customer Lifetime Value can be helpful to gain a deeper understanding of this parameter.

Photo by TNK PHOTO on Unsplash