Today, customers expect highly tailored and targeted interactions with the brands and organisations that they engage with. For these interactions to be of value, they need to be personalised, timely and provide meaningful, relevant, and engaging experiences. Traditional ‘earn and burn’ based loyalty programs are high cost and are not leveraging the true power of personalisation to a retailer’s business performance.
How do we personalise customer experience?
To deliver valuable and highly personalised customer communications and interactions, retailers need to capture all the signals that a customer displays through their engagement with the organisation. This is across the buying journey and over the lifetime of that customers interaction with the brand. This requires that a ‘digital fingerprint’ is created which integrates the customers profile data, captures their transactions, tracks all interactions across all channels, and can predict future behaviours, value and preferences.
What is critical and differentiating is that personalisation extends beyond traditional marketing communication but flows right through to service delivery, merchandising, and offer creation and bundling of services. This ensures minimal discounting and margin erosion and true tailored service delivery design. Those that embrace personalisation not only deliver on customer outcomes, but also in business performance.
The accumulation of points is no longer valued, but more about how loyalty programs can pivot to more immediate customer value and benefits offering with personalisation as the engine room for its delivery.
Customers and businesses benefit when engagement goes way beyond awarding and cashing in points. Keenly tailored individual experiences are the key.
The value of personalisation
The power of personalisation is no secret. Amazon estimate that around 35 percent of their revenue is solely based on targeted personalised recommendations when customers browse their website. Research by Gartner also found that when used at the right touchpoints, personalisation boosts engagement and increases revenue up to 28 percent and sales conversion up to 71%.
As a result, many organisations and retailers are making significant investments in this area to develop contextual and personalised experiences to differentiate themselves in the market:
The Wine Collective is an Australian brand on a mission to reform how the wine industry sells to consumers. To achieve this, they have developed an advanced personalisation engine which provides customised recommendations each time a customer shops. The result is a personal wine store which simplifies the shopping experience: reducing their 10,000 products down to a targeted selection based on customer behaviours, preferences, and previous interactions.
Best Buy is bridging the on and offline personalisation space with its app, which enters ‘local store’ mode and sends relevant personalised push notifications and tailors the experience to that locations inventory.
Using advanced analytics, Best Buy has honed its personalised emails by timing, frequency, and product to make sure customers never miss out on the products they like best.
How do we deliver a delightful, personalised experience at scale?
Organisations struggle to successfully integrate the key capabilities to deliver true personalisation. Many possess the key skills, platforms, data and analytics required, but continue not to release the value from their investments and lack the ability to use these assets to their full potential.
To deliver deep personalisation and respond to the key moments that matter for each customer interaction, KPMG has identified capabilities that need to be aligned to develop personalised customer engagement.
A cross functional way of working which breaks down traditional structures to place the key capabilities (Data, Insights, CX, Marketing, Merchandising.) in a more agile operating model which can quickly develop and test new initiatives and deploy them promptly into channel.
Collection of deep customer insights to inform the design of personalised customer journeys, interactions and treatment strategies and identify future pathways, behaviours, value and needs.
Continual and transparent measurement to easily quantify in-market performance, provide prompt feedback and support the ability to experiment with new ideas and designs and quickly assess their value to the customer. Test and learn activities across personalised pricing and personalised bundling are key.
A scalable and extensible customer engagement platform, which is enabled by a trusted, integrated and comprehensive (transactional, contextual, behavioural) view of the customer, supported by the real-time capture of all channel responses. The platform must provide the ability to continually adapt to evolving market expectations to optimise and orchestrate the experiences delivered in each interaction.
Investments in standard CRM functions and technology alone will not deliver this outcome for you, they will allow a single source of truth and segmentation capability but extending into decision engine design is crucial to extract full value from multiple technology investments.
For an optimum solution, imagine a layer cake, where the foundation layer is clean and trusted customer data, followed by a cleverly architected platform that is able to adapt to the market quickly, a layer of efficiently designed processes, and lastly a layer of intelligent automation that can provide real time insights to users while interacting with customers via assisted channels, but also use the same insights to automate tailored experiences via unassisted channels.
An emphasis on ‘lights out’ automation, to accelerate the development of new customer initiatives, mitigate the numerous hand-offs between teams across the value chain and apply algorithmic intelligence to the decisioning process across all channels.
A focus on developing meaningful interactions which generate value for both the customer and organisation. Success in not to be measured in terms of volume of interactions but is based on a personalisation approach which involves communicating less, with a focus on generating more value measured in loyalty, advocacy, engagement metrics and conversions to revenue.
Although many retailers are beginning to develop their capability to deliver personalised customer interactions, very few have truly mastered the ability to deliver these consistently at scale.
Those that are successful, possess the ability to align their capabilities (CX, data, and technology) to focus on quickly designing and delivering great customer outcomes. Aligned to this is the ability to make use of sophisticated adaptive analytics found in many customers engagement platforms to automate, orchestrate, and personalise the experience across channels.
This article was originally published in the Australian Retail Outlook 2022
How KPMG can help
Although many retailers are beginning to develop their capability to deliver personalised customer interactions, very few have truly mastered the ability to deliver these consistently at scale. Those that are successful, possess the ability to align their capabilities (CX, data, and technology) to focus on quickly designing and delivering great customer experience across channels.
KPMG's Powered Enterprise | Marketing, Sales and Service and Customer Advisory teams are specialised in helping retail companies develop and implement the right personalisation strategies to highlight their customer needs. From formulating the right business strategies, gathering customer insights, selecting the right technology stack to align front, middle and back offices, all the way to the implementation phase – KPMG personalisation specialists will ensure your business will be able to consistently deliver a personalised experience at scale.
