When Alana’s alarm goes off at 6:15 a.m., she yearns to hit the snooze button, but her day is jam-packed. She glances at the Under Armour (UA) Band on her wrist, which captures her heart rate along with sleep and fitness activity. She knows she needs to walk to work to hit her 10,000-steps-a-day exercise goal. Later she’ll check her progress using the UA app on her smartphone.
UA’s mission is to make all athletes better. That’s why the company acquired the popular apps MapMyRide, MyFitnessPal, and Endomondo in 2013, and then combined them to create UA Record, which had a user base of 175 million by Q2 2016.1 This platform for listening to and learning from athletes provides insights that no other fitness company has. By synchronizing all apps under one account for each user, the company was able to create an ultimate personalized experience for each customer, pulling data from purchases, demographics, and unique streams—such as activities and pro athletes followed.2
As part of that experience, UA recently recommended the athletic shoes that Alana is now wearing as she marches to the office. She multitasks by texting her boss, connecting with friends on social media, and reading email—all while dodging other pedestrians, with heads bent over mobile devices, and a stream of cars and buses. The brands that are trying to reach her will need to understand what makes her tick. She doesn’t have time to click on ads, sign up for newsletters, or open apps unless they’re so attention-grabbing and perfect for her needs that she can’t resist.
Reaching distracted customers like Alana is a challenge you face as a marketer—but you’re also working against the clock. You have only eight seconds to wow Alana before losing her interest.3 To win her over and turn her into a repeat customer and brand advocate, as UA has, you must design and deliver personal experiences that Alana finds relevant, engaging, and so addictive that she can’t help but click on your content.
As customer expectations evolve alongside digital capabilities and channels, it’s not enough to offer cool experiences. Now they must be cool personal experiences that anticipate the customer’s needs and desires before even she knows about them. This change requires us to think much more broadly about how we use personalization. Already brands adopting strategies and tools for personalized experience design are gaining a sustainable competitive advantage over brands that aren’t.
“Not too long ago—from around 2007 to 2011—organizations made investments in A/B and multivariate testing and saw terrific results from optimization,” says Robert Cantave, senior director of solution architecture at Epsilon.4 “They were able to improve the overall experience of their web sites and see double-digit growth. But growth can slow down once the one-size-fits-all version of the user experience works as well as it can. One size fits all is a very 2008 kind of idea.
“Data-driven design is a solution to this issue. Rather than a single, optimized experience, we create optimal experiences for different slices of the customer base, producing a new growth curve to improve the yield of digital experiences.”5
Across town, Alana’s pal Thilo is heading to the airport. Since he heard about Uber, he’s never taken a cab, never paid a valet, never gotten behind the wheel after a few drinks. Just one click on his smartphone and he knows a car is coming. Uber updates him on the arrival time, sends him a driver photo, tells him how the driver rates, then automatically charges his credit card for the ride. Thilo especially likes the rating system, which ensures the best-ranked drivers and riders (like him) get the best rides.
Many times when marketers first set out to design a new, personalized experience, they start with the medium—like a new app website or purchase flow. But according to Brian Solis, principal analyst at Altimeter Group, “designing for a medium is not the same as designing for experience, and the types of media you’re designing for are going to keep evolving. It’s better to think beyond them.”7
Likewise, we can’t just think about the message: the headlines, copy, and images that will resonate with customers and persuade them to take action. Yes, these are essential to creating the right experience, but it’s not enough to think about how customers interact with our brands through looking, typing, clicking, touching, speaking, or swiping.8
The best customer experiences start with the data that informs and predicts your customer’s needs and wants at every moment. And because today’s customers are constantly moving among screens, channels, and devices, understanding how they experience your brand as a whole takes a deep level of customer intelligence.
In other words, data and design must intersect in meaningful ways to create personal, timely experiences that delight customers and encourage them to share them with others, driving engagement and revenue.
Only by listening to what our data tells us can we understand what customers think and feel and how we can use design to inspire them.9 Companies that have already invested in integrated data systems to optimize and personalize incrementally can use these systems to do the same across the entire customer experience.
Keep reading to learn how you can use data to design the holistic, emotional customer experiences that are quickly becoming a major differentiator of successful brands.
Alana stops by Starbucks to pick up her latest addiction from the brand’s secret menu. She’d requested it via the Starbucks app, which recalls her most recent orders and uses GPS to suggest the closest location. She paid using her Starbucks loyalty card, linked to My Starbuck’s Rewards. Since she’s been using mobile ordering, she’s enjoyed discounted products, free refills, and the occasional complimentary drink or sandwich.10
Starbucks continues to offer innovative experiences to their impatient, fast-moving, caffeine-loving customer base. But the company has always been adept at adapting to the future before it happens. Brands like Starbucks understand that if they don’t create experiences that meet their customers’ growing expectations, they’ll lose customers to brands that can.11 Now select stores even offer Starbucks Evenings with wine and beer, including the signature Espresso Cloud IPA. Personalization on the Starbucks level is fast becoming the new normal, especially for younger generations who have always relied on technology to solve their problems—wherever, whenever, and however they want.12
“In exchange for this warm and fuzzy experience, consumers reward you with more meaningful engagement, quicker conversions, higher cart values, increased spend, and ongoing loyalty,” says Kevin Lindsay, director of product marketing at Adobe. “That’s the personalization payoff.”13
As research continues to emphasize the value of personalization, many brands are reinventing themselves as customer-centric organizations and announcing their intention to deliver exceptional experiences. Yet a clear gap remains between what customers want right now and what brands are delivering.
Generic, one-size-fits-all engagement can alienate customers and damage a brand’s image, especially when the brand touts itself as being customer-centric.14 The fact that so many marketers are struggling with how to do personalization well, even in standard online and mobile channels, highlights a huge opportunity for organizations to start now and gain a competitive edge in customer acquisition and loyalty. Of course, that means your personalization must go far beyond inserting your customer’s name in a “Dear [Customer]” salutation.
Given the rapid adoption rates of new technologies like wearables and smart objects, it’s critical for brands to implement experience design strategies not just to attract new customers but also to keep valuable, existing customers across technologies that may not even exist yet. As the Internet of Things (IoT) evolves, it will be even more important to know what customers think and feel to respond to their changing expectations.
“Personalization is not just about marketing promotions,” says Loni Stark, senior director of strategy and product marketing at Adobe. “There’s obviously value to sending coupons or offers that are related to someone’s interest, but it’s much broader than that. It’s also about enabling people to better use the products or services you already have so that they want to continue to use them.”15
As brands work to personalize experiences, they face a conundrum: how to be friendly without being frightening. Stitching together personal information can sometimes feel downright creepy to customers.
To create ideal experiences, you need to know and respect your customers. They don’t want to feel as though they’re being sold or advertised to. They don’t want to feel that the data they provide is being used only for your brand to make a buck. It should be used for your customers to get to know you and to make their lives better.
Customers want to feel like they’re in control. Your role, as a customer sees it, is to help them make confident decisions—not to lead the journey.16
If you were traveling through your city and received a push notification from every restaurant or retail store, you might get annoyed or overwhelmed. Put yourself in the customer’s position, and let your data dictate the timing and content of the experiences your customers will consider most relevant.17
Customers may be putting information on Snapchat, Instagram, and Facebook, but that’s to share with friends. Don’t make customers worry about what they choose to share with you—remember, you can’t deliver meaningful personalization without their data. Earning trust can help brands revolutionize entire industries.18
Thilo arrives at the airport to catch his Southwest flight. He’d received a $200 voucher for his cancelled flight back in July, when a technical glitch on a Wednesday afternoon snarled flights through Saturday evening. Thilo was caught in the melee of stranded passengers, missed schedules, and unhappy customers. And like many of his fellow fliers, Thilo turned to social media to vent his frustration and share photos of the long lines caused by 2,300 cancelled flights. Although it still proved challenging to save the customer experience, Southwest made a lot of right moves.
CEO Gary Kelly owned the situation, taking complete responsibility and apologizing sincerely for it. Although some companies worry that apologizing will leave them open for legal liability, consultant Jay Baer says this is not the case.19
Southwest let ticketed customers rebook at no cost for flights within two weeks of their original travel dates and receive refunds even for nonrefundable flights. They also gave affected customers a virtually unrestricted 50 percent off voucher for flights during the next six months.
Facebook Live videos with COO Brooks Thomas kept customers informed and emphasized apologies. One live broadcast was viewed 803,000 times, liked more than 5,500 times, and loved more than 1,100 times.20 Other human touches included a pilot who taught children to make origami planes and a group of employees who threw a birthday party for an unlucky traveler who missed her celebration.21
Southwest answered many complaints, particularly those on Facebook and Twitter.22
A website hub with all relevant information is great, but make sure you post information on Facebook, LinkedIn, and all other social media channels your customers use to connect with you.23
That’s because getting to know their customers on a personal level—in the physical world and now in the digital—is ingrained in the Southwest culture. For example, Southwest tracks special events like birthdays and engagements to deliver personalized messages in person and on social media.
Give Southwest props for doing its best for customers even in a crisis—it’s clear that marketers need to be aware of social media and able to influence or respond to improve customer experiences. Even without glitches, designing a personalized, seamless experience across a customer’s journey is daunting given the multitude of channels and devices used.
To know customers on a personal level, it’s important to lay the foundation for designing and optimizing a winning personalized customer experience. That includes buy-in and alignment throughout your company—marketing, IT, sales, and service and support. Winning experiences also require a budget to support engaging the necessary people, processes, and technologies. Although most companies collect sufficient first-party data, it needs to be well-integrated across sources and with third-party data. And many companies fall short on testing and analytical techniques, like determining customer value and churn. Finally, automation must be in place to personalize, test, and optimize at scale.
Alana takes lunch at her desk to finish a rush project. She’s presenting to upper management next week and wants to look professional yet stylish, so she takes a few minutes to look at new offerings from Topshop on her iPad. Using the brand’s drawing board, she builds an outfit and adds her own inspirations. She loves how easy it is to switch from pulling clothes and accessories together to checking a nearby Topshop store to learn about the stock available. She can order through the app using Apple Pay—but first, she shares the outfit on Pinterest to get her friends’ reaction.
British retailer Topshop hit the mainstream in the early part of the millennium, partly due to its collaboration with emerging designers and its sponsorship of London Fashion Week. The clothing, shoe, and accessory brand now boasts more than 500 shops worldwide, along with a strong digital presence.
Topshop has been extremely successful at marrying in-store shopping experiences with their downloadable “On the Go” app and social media. During London Fashion Week 2014, Topshop encouraged brand lovers to post their looks using the #TopshopWindow hashtag, then featured the images in a digital fashion show at the user’s flagship store. The Instagram campaign had amazing traction and highlighted Topshop as a social media innovator.24
Topshop also experimented with a virtual fitting room installed at a Moscow store in May 2011. The room used augmented reality and Microsoft Kinect to let customers select a garment off the rack without trying it on physically. Although the experience was clunky, it’s a nod toward what clothes shopping may be like in the next decade.
The kind of personalized, omnichannel experience that Topshop offers requires a commitment to customer experience that starts with aligning business and consumer goals. Many companies can optimize only bits and pieces of a customer’s experience: a home page here, an email offer there. Even within the same organization, marketers use different marketing platforms, resulting in multiple profiles for the same customer and delivery of experiences that compete for a share of her. Because many companies organize departments by function—for instance, web, mobile, and social—a different set of KPIs motivates each team. Although an organization may talk customer-centric, disconnected departments, touchpoints, and customer data mean they can’t walk it, and their customers can tell.
CMOs are generally in charge of uniting the organization and working toward one data-driven, customer-centric company mission. Although sometimes the effort is driven from the IT side of the house, the real power lies in cooperation and active and enthusiastic participation from both.
Companies leading the personalized experience space organize around the customer, not the product. For example, Vodafone Ireland restructured teams around customer insights to engage each of its key segments—business, contract, and pay-as-you-go. Vodafone Ireland provides customers with the greatest amount of control possible over their plans via a new mobile app. Success is in the numbers: 422,000 downloads, 200,000 unique monthly customers using the app, and the highest percentage of Vodafone engagement of any country in Europe.25
Leaders in customer experience also employ a common digital foundation and centralized marketing platform across the organization that gives them the data and dexterity to create and deliver connected experiences across all channels and touchpoints. Managing the growing number of assets necessary for personalization is also critical to ensure continuity, especially in global enterprises working in local markets. Cloud solutions help by enabling marketing and creative teams to overcome barriers like silos, locations, and languages and to share assets for all their customers.
There’s no getting around it—doing customer experience well requires a budget to support it. Many organizations have not yet invested in the resources, technology, support, or strategy. In large part, this may be due to the up-front expense it takes to restructure and integrate solutions. Many companies aren’t prepared to make the investment.
But as content marketing platforms mature, adding capabilities that support more marketing initiatives, it’s easier to present the argument to decision makers that a technology investment today will yield a higher return over the long term than solutions of the past. To support your budget request with data, tie the investment to increases in average revenue per customer and lifetime value. For example, increasing customer retention by just 5 percent can lift revenue by 25 to 95 percent, according to Bain and Company.26
For many companies, offering exceptional experiences starts with a greater investment in digital marketing.
If you don’t have the budget to go all in right now, that doesn’t mean you should shelve your customer experience plans. Companies can incrementally grow their technology to support their customers’ growing expectations of better and more relevant personalization. Current content management systems let domain experts easily modify assets to fit the channels, screens, and touchpoints customers prefer — without having to wait for IT or development teams. Having a simple way to author experiences is crucial as the number of experiences needing to be optimized rises.
Integrating analytics, content management, and testing and optimization tools with automation capabilities makes it easier for marketers to create and scale personalized experiences as target audiences adopt new technologies. In the past year, Adobe has seen a 22 percent increase in automation for web content based on a person’s profile or behavior and a 23 percent increase in the automation of personalized content for mobile.30
Thilo thanks the receptionist at the Westin, where he’s attending a CX conference, and heads to his suite. He loves the Starwood Preferred Guest (SPG) keyless room entry that lets him use his smartphone instead of a physical key card. By developing a Bluetooth-enabled lock for hotel rooms, Starwood ended forever Thilo’s saga of hotel key cards that mysteriously stopped working, requiring a long trek back to the front desk and a longer wait behind guests checking in.
American hotel and leisure group Starwood owned more than 1,200 properties across 11 brands before its recent acquisition by Marriott. Starwood is known for exceptional customer service, especially for those enrolled in its Starwood Preferred Guest (SPG) loyalty program.
The company continually collects data and analyzes it to keep valuable customers happy. Matt Valenti, vice president of guest experience intelligence, believes almost everything can be quantified—even emotions like disappointment and delight.31 That’s critical when analysis shows the top 2 percent of guests generate 30 percent of profits.32
Mobile is the brand’s fastest growing channel, with 1.4 million active on the SPG app.33 These guests appreciate keyless room entry but, to make the experience even smoother, Starwood plans to expand SPG app options to let guests bypass the line at check-in. The brand is also exploring ways for rooms to recognize guests’ personal preferences, so their favorite entertainment channels and ambient conditions will be instantly available.34
Social media also provides a powerful platform for building deep connections and learning about guests. Starwood’s 30-person team operates social 24/7 in 26 different languages.35 The company also has a throwback approach to dealing with top customers—the ambassador program gives these individuals a single point of contact to handle all their needs.
Digital insights are the new currency of business. According to Forrester, “Companies are investing in more data sources that provide deeper insights.”36 In 2014, the average company used only four data sources for analysis and measurement; today companies use six, on average. Research shows that the number of sources a company integrates correlates strongly to performance against competitors.37 Only 15 percent of data management professionals say their firm has the ability to integrate a variety of data types, such as quantitative, qualitative, structured, unstructured, third-party, or open data.38 Marketers need quality data, from multiple channels, integrated for the complete picture of the customer journey.
One key to integrating data: understanding that correlation is not causation. For example, says Lindsay, historical data shows that as the number of pirates sailing the seven seas has decreased, the temperatures around the world have increased.39 The obvious conclusion? The drop in global pirate population is causing global warming. To reiterate—correlation is not causation.
Data science sits at the juncture of marketing and science, an area sharply focused on solving problems. Marketers can leverage their know-how and analytical thinking as well as machine learning to help with each decision. Technology that can process massive quantities of data in real time and detect anomalies enables them to understand customers deeply, then determine what content and experiences will resonate best. Data pros struggle to overcome the main obstacles to better customer experience: data quality and how the organization shares, analyzes, and works together to use it.
Data pros struggle to provide their businesses with the quality data needed for “Wow!” experiences. They need to architect their systems to reflect how, where, and when their stakeholders use data. They must design agile, self-service capabilities and centralize data so insights are easily accessible throughout the organization and across channels. Only by bringing different departments together to share data can brands design and optimize an end-to-end customer experience.40
But you don’t need Big Data to personalize effectively. Even minimal data sets—such as the purchase history and clickstream that marketers usually have by default—can reveal clear patterns you can use to start adding value to the customer journey. Later you can audit what you know about a customer, map that against their journey, and identify the data necessary to create a new level of experience or value exchange. You ultimately want to achieve a level of personalization that brings your brand into a customer’s life on a deep emotional level.
The good news for companies that successfully navigate the data quagmire is that the resulting integrated customer data platform is reusable for future analyses. Although today, analytics focuses primarily on acquiring customers, techniques that address later stages of the customer lifecycle are on the rise. In fact, 57 percent of companies engage in customer lifetime value analysis, which lets them optimize interactions based on predicted future profitability.41 Companies that make extensive use of customer analytics show a 126 percent profit improvement over competitors who don’t, according to McKinsey research.42
Powerful analytics give marketing teams insight into customer interactions with brands, their preferred products, and the sequence of purchases. They provide a view into how a display ad or TV commercial ties into in-store sales or online purchases. And they show how brand and performance marketing can complement each other for customer benefit.
Customer experience pros also gain insight, through techniques such as customer journey analytics and customer satisfaction that reveal customer experience pain points.43 They’re in a unique position to help their companies close the gap between the abundance of customer and marketing data available today and the insights needed to win, serve, and retain customers.
We’ve already noted that companies that integrate more data sources achieve greater success. But compared with 2014 benchmarks, Forrester sees firms adopting more analytical techniques for deeper customer understanding.44 The outputs of some models can be inputs into others. For example, customers with a high lifetime value who are also high-risk for churn might be considered for targeting with attractive incentives.
In the next 12 months, 47 percent of companies in North America plan to increase their analytics budgets, according to Adobe research.45 If you’re committed to differentiating via customer experience, you should be one of them.
Alana reads her latest email from JustAnswer. Their help was invaluable last year when she ran into problems with a mechanic. The popular online service provides expert guidance to millions with pressing questions. Email is integral to their efforts—JustAnswer sends more than a million every week. Automation is the trick to personalizing communications based on location, activity level, types of questions, membership, and other factors. But to stay in front of customers, they also send batch-and-blast mythbuster emails that can hit open rates beyond 50 percent. Alana is about to discover if you really can catch a cold by going outside with wet hair.46
As JustAnswer’s success makes clear, you need to leverage the tools at your disposal to make your job easier. The key to delivering remarkable customer experiences through personalization, anomaly detection, and algorithmic testing and optimization is automation.
“Automation is actually easier than knowing it all,” Lindsay says. “Offloading brain power to the machine can help you figure out what is important to focus on and prevent mistakes of persona targeting that start in a meeting room. Don’t wait to tackle automation as a phase 2 or phase 3. Start now!”
By automating early, you’ll soon be equipped to apply automation in more advanced scenarios. Robert Cantave, senior director of solution architecture at Epsilon talked about Epsilon’s successful use of automated models to achieve double-digit growth in customer acquisition and retention: “CRM data helps us understand what current customers are interested in seeing. Combining that with our third-party data lets us better understand what clusters of customers have in common. We present that information to the automated models and have them test and ultimately identify the product, categories, or content most likely to be of interest to both returning customers and brand new unknown users who’ve been seen elsewhere in our network.”
The spectrum of tools at marketers’ fingertips to guide hypotheses and strategy continues to expand, making automation easier to use. But implementing automation can be a large leap. A recent survey of 905 B2B marketers shows that 84 percent of companies took more than a month to implement a system—and 25 percent took longer than 6 months.47 That said, Econsultancy research found that about three-quarters of companies realize significant benefits: more relevant communication (78 percent), increased customer engagement (76 percent), and more timely communication (72 percent).48
Thilo takes a quick shower and shaves before venturing to the welcome reception for the CX conference. He pulls out his Dollar Shave Club (DSC) razor. In 2012, DSC launched a viral video using the company’s smart and playful brand voice. Thilo subscribed for the price and convenience but loves finding the new items in his mailbox each month. Even before DSC ships the box, he receives an email with an image of what his box will contain. A fun ask that doesn’t feel like an upsell suggests other products to toss in. Thilo often buys the Shave Butter—and because of this add-on purchase, DSC frequently sends him free samples. Analysis showed the brand that the ROI from sending free samples panned out only for customers who already buy Shave Butter. But many DSC customers help with the advertising: 50,000 people a month refer a friend to the club.49
Start the design process for your “Wow!” experience by deciding who you’re creating an experience for, perhaps based on which segments will be most valuable to your brand. Try to imagine every step of walking in your customers’ shoes—remember that experiences are sensory, so see, hear, smell, taste, and feel what it would be like to be them. Personas and pictures will help you better relate. By integrating the right technology and following the five-step process outlined here, you can scale your efforts to design and deliver personalized experiences that may just delight you as much as they do your customer.
Collect all data on customers from inside and outside your organization, then see how customers interact at different touchpoints. Their journey will almost certainly look more like a maze than a linear path from awareness to decision. Identify the high-volume points, the pain points, the obstacles, the dead ends. Gather qualitative data through focus groups and surveys or from speaking directly with customers to learn how they perceive your brand. Use that insight to map out the journey that exists, the one you would like to create, and the data necessary to realize it.
Design and deliver a customer experience based on the new map. Seek inspiration from those who have gone before (like the 10 examples in this guide), from how you would like to be treated, from a skit or song. Don’t try to engineer every interaction at once. Know where your customers are in the journey, and prioritize your goals to interact with them at the touchpoints that will make the greatest emotional impact.
Without automation you cannot scale personal experiences to reach each of your customers across channels and devices. Use technology to provide personal content and experiences to each customer, to test and validate their preferences, and to optimize for even greater delight.
Often you’ll roll out an experience to high-value customers first to address the places where they’re running into barriers. This will bring the biggest return for your efforts. Monitor how customers respond to your experience design in real time through analytics, direct feedback, social comments, and reviews.
Gather data to learn how customers respond to the design. Use key informant interviews or focus groups to get qualitative feedback, and ask customer services, sales, and support teams for input. Determine if the experience delighted customers, needs tweaking to meet its potential, or failed miserably. Then continue the cycle based on what you’ve learned.
Alana picks up her phone for the umpteenth time that day to say hey to Thilo. She’s been on the T-Mobile network for a year, ever since she’d received that almost telepathic text from the magenta brand. The text said, “Stop waiting. Switch to T-Mobile today, and we’ll pay your Early Termination Fees from AT&T when you trade in your device.” She’d already considered signing up with the “un-carrier,” but the hefty AT&T don’t-go fee had stopped her. Then T-Mobile had offered to pay it—almost as though they’d read her mind. She joined the network right then.
Wireless communications carrier T-Mobile famously rebranded itself as the “un-carrier” in 2013 when they separated the cost of monthly service plans from devices. Since then, they’ve added customers at a phenomenal rate, with 2 million joining in each of the last three quarters of 2015.50 Tactics include targeting other carriers’ customers. T-Mobile initially identified prospects through information about the device used to access their company website. Then the brand tested messages. A generic message resulted in a 9 percent lift in cart stats, but personalizing the message produced a 34 percent lift within the first month.51
Now T-Mobile has set its sights on the millions of IoT users who will be without support when a competing carrier shuts down its 2G network at the end of 2016.52 These IoT devices include everything from connected cars to smart cities. T-Mobile began offering these potential new customers free SIM cards for their IoT devices to ease the switch and 50 MB free per device per month through the end of 2016. The “un-carrier” also promised to maintain its own 2G network through 2020.
Digital moves fast. Estimates of the number of connected devices in the IoT by 2020 range from 50 billion (Cisco) to a whopping 200 billion (Intel).53 In that kind of hyper-connected world, your ability to use data to design customer experiences will determine your success in the next era of marketing. Companies that dive into personalization and optimization technology today will be much leaner and more nimble moving forward. Already many brands delight customers like Alana and Thilo at target moments throughout the day. Those brands will be in position to eat the market share of companies whose personalization efforts don’t go deep enough to build meaningful relationships.
Adobe Experience Cloud empowers companies to use big data to effectively reach and engage customers and prospects with highly personalized experiences across devices and digital touchpoints.Learn more