Consumers are very much aware of the looming recession, as well as increased prices caused by inflation and shortages — but a personalized experience and being understood by a brand still drives sales more than cost savings. In fact, a 2022 Redpoint Global survey indicated that 74% of those polled believe that their loyalty to a brand is about feeling understood and valued, not discounts and loyalty perks, and 64% of respondents would prefer to do business with a brand that knows them — and 34% would spend more on a product from a brand that knows and understands them. Let's take a look at the ways personalized experiences drive sales — even during a recession.

CMSWire Report: Personalization Is Aspirational, Not Always Reality

CMSWire’s 2023 State of Digital Customer Experience Report provided some very interesting insights into the personalization efforts of brands, how effective they are, and what can be done to improve their results. The report revealed that personalization is often more of an aspiration than a reality for many marketing teams. Despite expressing an intention to implement personalization and an increasing number of tools that are designed to lower the barrier to entry, personalization maturity continues to be surprisingly low. In fact, this year many brands appear to have almost gone backward when it comes to personalization, as only 18% of brands indicated that they are deriving benefits after implementing personalization, down from last year’s 20%.

This doesn’t mean brands are not interested in personalizing their customer experience. The proportion of those brands that are considering an evaluation of personalization has increased to 23% and those who indicated that personas and/or personalization are a priority area of investment has risen from 20% to 24%. 

The tools that have been implemented for personalization make up a large part of whether or not a brand has seen successful results. Brands with effective digital customer experience (DCX) tools are nearly four times as likely to have implemented personalization compared to those with tools considered ineffective. Additionally, 34% of those with tools they rated as “working well” are already reaping the benefits of personalization, compared to just 9% with tools that were rated as “needing work." 

Finally, although it’s been thought that many brands are striving for the level of hyper-personalization that the tech giants such as Amazon provide, the results of this survey are indicative that the tendency is against granularity, with 65% describing their personalization as either “one to many” or “one to some.” Those with a more granular approach with “one to few” (12%) and “one to one” (6%) show that truly granular hyper-personalization is the exception rather than the rule where personalization has been implemented.

Related Article: Is Less More for Customer Personalization and Privacy?

Personalization Is About Meeting the Needs of Customers

One of the ways personalization is successfully used to drive sales is by making recommendations that are likely to be appreciated by the customer. Brian Greenberg, CEO and founder at Insurist, an insurance comparison and review resource, told CMSWire that sales can be driven by a personalized experience in many ways, but that personalization is not just about the experience itself, but also how it is presented to the customer. 

Relevancy becomes a key factor when it comes to effective product recommendations. “For example, if you are a retailer and want to sell more products, you could offer a personalized experience by showing products that are relevant to your customer's interests or location,” said Greenberg. “This will help them feel like they have received a tailored experience and may encourage them to spend more money.”

Greenberg believes that cost savings can come from personalization because it enables brands to focus on the needs of individual customers rather than trying to meet the needs of everyone at once. Consumers appreciate it when a business recognizes them personally, and this isn’t a new expectation. A 2018 report from Accenture indicated that 91% of those polled said that they are more likely to do business with brands that recognize and remember them and present them with relevant recommendations and offers.

Personalized Customer Service Increases Sales

It’s been said that exceptional customer service is a key driver of consumer loyalty. Conversely, poor customer service drives customers right into the hands of competitors. Gladly’s 2022 Customer Expectations Report revealed that 42% of those polled said they would stop buying from a brand altogether after just two bad customer service experiences. Additionally, 59% of consumers would recommend a brand to a friend because of its customer service. 

Personalization of customer service enables customers to feel like a brand knows them as a person, rather than just a way to make money, something that Gladly’s report confirmed: 73% of consumers want to be treated like a person, not a case number. The report indicated that although 66% of consumers prefer brands that know them and can recommend things they would like, a number that is even higher for millennials (81%) and Generation Z (79%), many brands are still failing to achieve the level of personalization that customers expect and desire.

Vera Modenova, chief operating officer at Flowwow, a peer-to-peer marketplace that connects local brands and businesses, told CMSWire that it’s crucial to learn from your customers — and make their interaction with you immaculate. Modenova believes that an empathetic, personalized approach to customer service is vital, and that when a customer service agent is contacted by a customer, the service agent sees the customer’s order number, order status, the recipient’s address and order history. “It saves a lot of time, eliminating potential roadblocks that could cause bottlenecks in performance. What's more, they (customer service agents at her business) don't have scripts and every answer is individual, based on the customers' queries.”

Listening to and responding to the feedback that customers provide during an interaction with a brand also helps to create a personalized emotional connection between the brand and the customer. “When we improve the product based on our customers’ suggestions, we notify them about new features via an e-mail newsletter, which hopefully makes our customers feel heard and appreciated,” said Modenova.

Modenova suggested that brands remind their customers of special moments, providing a personal touch that they can then extend to others. Because Flowwow is a gift-giving platform, they have a calendar for customers that enables them to mark special occasions such as birthdays or anniversaries. “Hence, 1-2 days before the event we send reminders to our customers to surprise your person with gifts,” Modenova said, adding that the more personal it is, the more value your customer will feel. 

Learning Opportunities

Related Article: 5 Ways Transparent Personalization Can Win Over Customers

Above All, Brands Must Provide Transparency

Rusty Bishop, CMO of Bigtincan, a unified sales enablement solutions provider, told CMSWire that as the likelihood of an economic recession in 2023 becomes more apparent, companies of all sizes and stages of growth are pivoting to a bunker mentality by lowering revenue expectations, reducing costs and conserving cash. Bishop said that in turn, three priorities have risen to the forefront:

  • The need to retain customers.
  • Communicate more effectively with their customers and prospects.
  • Deepen long-term client relationships.

Bishop believes that in today’s turbulent world, customers desire a commitment to transparency that deepens their bond with a business. “They want to know they are being thought of as more than just a means to an end.” To do this, Bishop said that it’s about personalization — that is, tailoring your solutions and communications to appeal to the specific needs of each customer, doubling down on being a resource they can turn to when times are tough, and promoting engaging content that truly addresses their demands. 

Bishop suggested that brands that create a customer experience that is memorable and valuable will make a stronger impression than anything else. “While selling is their main goal, they must do so by nurturing these delicate relationships, which will, in turn, bolster brand loyalty, and ultimately keep the customer coming back for more,” Bishop explained.

Using Personalization to Drive Sales

There are many brands that have successfully used personalization to drive sales. Jaleh Bisharat, founder and CEO of NakedPoppy, an online clean beauty supplier, has taken personalization to a new level. Her business provides an excellent example of a brand that is using personalization to provide customers with recommendations for a selection of products that will be of interest to them, specifically. 

Bisharat was able to use a patented algorithm that is able to seamlessly make personalized recommendations to customers and leads. The algorithm rates every product NakedPoppy sells specifically for each shopper and curates a personalized boutique for each customer. Bisharat said that customers take a three-minute expert beauty assessment that has been crafted by data scientists, chemists, skincare specialists and makeup artists. Through the use of technology that considers skin type, color, undertone, age, eye and hair color, allergies, sensitivities, beauty goals, and other factors to rate products according to how well they will work for each individual, it is able to assemble a personalized clean beauty boutique featuring each customer's "Perfect Picks." 

By providing such an exceptional personalized experience, NakedPoppy was able to double its sales in the last few years, even during the pandemic, and Bisharat believes it’s due to the brand’s focus on creating the best customer experience possible. 

Conclusion: Transparency, Personalization Matter in Customer Service

Although many brands are interested in providing their customers with a personalized experience, the report from CMSWire indicated that many brands can be more effective in their personalization efforts by using effective digital customer experience (DCX) tools.

By meeting the individual needs of customers, providing personalized customer service, and being transparent in their efforts, brands can continue to drive sales — even during a recession.