This article originally appeared in the DEC. 2012 issue of CUSTOMER Magazine.
A brand’s knowledge of individual customer preferences is critical for nurturing long-term relationships. This ensures an optimal customer experience, which is becoming a strategic imperative for companies to differentiate themselves and maximize acquisition, retention and growth.
Whether a brand’s communications are based on segmenting customers via distinct marketing personas or delivering completely personalized experiences, customer intimacy has become the goal for any engagement approach.
Big data is at the center of any customer intimacy initiative. eMarketer recently reported that major e-commerce players such as eBay (News - Alert), Wal-Mart and Netflix are using big data tools to deliver personalized experiences. Access to and use of structured customer data is paying off with higher customer spending and improved retention rates. Personalized experiences based on big data are even more engaging and effective if that data has currency.
According to eMarketer, half of the largest U.S. retailers use personalized techniques and tools on their e-commerce sites, but currency – real-time application of data – is where most companies struggle.
Leveraging the latest Web browsing behavior and transactional history data makes the difference between a positive and a not-so-positive customer experience. In certain cases, if data lacks currency, the business can incur greater costs. Take the everyday instance of a customer making a bank deposit in the morning and then checking his or her account online later that day.
If those funds do not appear in his or her online account, not only does the customer become frustrated, but the bank incurs cost when the customer contacts the call center.
While personalized, real-time data can be applied across multiple channels, video is the most captivating online medium. According to a recent Nielsen study, the percentage of people who watch video on a computer once a month (84 percent) is now higher than the percentage of people who watch TV.
While businesses have traditionally viewed video production as operationally challenging and cost-prohibitive to produce at scale (let alone to personalize), video can now be generated at mass scale in an automated way, making production feasible and cost-effective enough to be sustainable.
Personalized video engagement communicates the importance of each customer’s relationship with the company and is applicable for each step in the customer journey. For example, when a consumer abandons Office Depot’s website without purchasing, the company retargets him with a video ad that includes a special offer tailored to that individual based on his recent browsing behavior and personal characteristics. AT&T (News - Alert) educates new subscribers on its first month’s bill and promotes adoption of value-added services using personalized, real-time video.
And such videos can be used further into the customer lifecycle to right-size, retain, upsell and reward.
When data is relevant, up to date and presented in an engaging medium such as video, consumers feel valued and treated as individuals. A customer’s unique persona can be reflected in the visual presentation and background style of a video. Upselling recommendations may vary by customers’ transactional data, while merchandising messages can differ between a soccer mom and a techie. A customer’s status may also differ by segment. For instance, a repeat customer could be incentivized with an earned special rewards message, while a customer who hasn’t purchased in months might receive a welcome back message.
Regardless of where online video is applied in the customer journey and how rich a structured data set may be, the most critical element of a customer intimacy and personalized engagement strategy is devising a definition for success. What is the return on ad spend that you expect to achieve? What is the targeted cost reduction? What is the desired take rate on value-added services?
Strategic video initiatives must start with a defined set of success criteria and metrics. Benchmarks will differ for each initiative, but all should be measured and optimized.
Customer intimacy is a compelling strategy for differentiation and long-term customer value. Brands investing in big data and personalization initiatives are poised to deliver the most engaging and effective experiences in all touch points with customers. For brands that lead the way in adopting a personalized approach to engaging customers with video, the benefits promise to be vast.
Kelly Ford is vice president of marketing for SundaySky.
Edited by Braden Becker