Businesses are increasingly accumulating digital consumer data from the multiple channels through which interactions occur. Personalization efforts can be made tangible, measurable benefits through this aggregated consumer data.
According to a Gartner survey1 of vendor's reference customers, there was an overwhelming majority of 99% of those surveyed who stated their satisfaction in receiving the expected ROI from their personalization offerings. Seventy percent of them reported using a SaaS solution.
What is personalization?
Personalization is targeting services or sales to match a customer’s behavior pattern online, their interests, anticipating them and marketing accordingly.
Personalization should be based on a consistent customer experience across all the seller’s touchpoints, delivering a one to one experience. Personalization can be customized to serve multiple services fulfilling multiple needs in the digital sphere.
Need for personalization in financial services
Personalization is crucial to a successful customer relationship and offers a comprehensive approach to the development of tailored products and services in this increasingly competitive sector. Customer information can be leveraged to optimize pricing decisions, rewarding loyalty, and tailor offerings. This will enable the organizations to know more effectively who and where to promote and where to offer alternate services.
Improve personalization across channels
Various processes can be simplified and unified across multiple channels reducing the manual effort for the time-constrained customers. Also, customers can be segmented by understanding their preferences, what they want and then effectively provide it.
How does personalization work?
The first step in personalization is grouping customers according to their behavioral data that is collected. 5 to 10 such behavioral personas are created from the data collected. For each persona, the customer journey is mapped using the series of interaction with a brand from initial browsing to purchase and purchase of related products. Along the customer journey, potential triggers and responses are explored.
A key element of personalization is quickness of response to the triggers that are set. The response to these signals through quick and appropriate actions to the individual customers are called triggers. Trying out a message or response to the trigger, evaluating the results, altering the response and measuring the results again. It does take repeated attempts to capture maximum potential value.
For example, according to McKinsey2, a leading apparel retailer they worked with had to go through four different trials of a next-product-to-buy email until the winning one was found, which ended up yielding twice the impact of the first iteration. Additional iteration they tried only resulted in lower returns.
Demand for personalization
Survey3 shows that customers in financial services want and expect a personalized experience, and in many cases, are willing to pay more for a personalized experience. This is creating demand for more and more personalization in the various financial services.
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1. Penny Gillespie, Jason Daigler and Magnus Revang, Gartner Market Guide for Digital Personalization Engines, PDF ebook, page 2, April 2015, Digitalmarketingsuite.com, accessed April 2017.
2. Brian Gregg, Hussein Kalaoui, Joel Maynes, and Gustavo Schuler, “Marketing’s Holy Grail: Digital personalization at scale”, article November 2016, McKinsey.com, accessed April 2017.
3. A new era of customer expectation, Global Consumer banking Survey 2011, Ernst & Young, 2011, EY-Publication, accessed April 2017.