Today we are going to talk about one of the most prominent areas of today’s experience world: Personalized customer experience.
Imagine, you need a product or service, and as a result of your research, you enter a website or an application and you feel as if they know you very well. Products that are in line with your preferences and expectations are highlighted, personalized recommendations are offered, and moreover, there is a hologram that reflects you from the inside to help you find what you are looking for. How would you feel? You would probably go back to that website or app again, right?
This is where personalized customer experience comes to the fore. Businesses can make customers feel special by tailoring their products and services to their preferences and behaviors.
What is Personalized Customer Experience?
Personalized customer experience can be defined as the process of businesses using technologies such as data analytics, artificial intelligence, deep and machine learning to customize their products and services to each customer’s basic needs, expectations and demands, starting from the first contact. Instead of treating customers as a single whole, it is recognized that each one has a different profile and background.
Personalization Journey from Past to Present
The design of the experience to be offered to the customer has come to this day by trying different ways from the past to the present. At first, due to both the limited technological possibilities and the reality of the time, we see the “one-to-all experience” design, which offers a common and similar experience environment for everyone.
Over time, as businesses have realized that each customer can be divided into different groups and segments within themselves, this approach has started to trend towards “one-to-many experience”
With the gradual development of technology and its tools and applications, the possibilities of delivering experiences in a unique and individualized way have been realized and the trend has shifted towards the “one-to-one experience” approach.
It should not be forgotten that each buyer has a different expectation and approach.
Customer Interaction with the Brand
As a result of one-to-one experience design, customers will feel valued in their communication with the brand and an emotional bond will form between them and the brand. With this relationship established between the brand and the customer, overall customer satisfaction, loyalty and customer lifetime value will increase.
Because individuals:
- Form their needs and expectations with the few information they provide,
- Every step taken and every trace left on it develops or improves in line with this,
- Businesses that build on the communication they have established in the past are more likely to return than other brands.
Listen Before Talking and Understand Before Suggesting!
The first step to manage the emotion that occurs after the experience offered to the customer and to offer a special experience to each customer is to understand the customer. As a business, you should focus on understanding what the customer wants and needs at that moment, rather than constantly suggesting something. By keeping your finger on the pulse of your customers, you can offer real-time recommendations and make your relationship long-term. Understanding the customer is at the heart of customer experience. Today, this is where companies that have a big piece of the pie in any industry differentiate and stand out from the rest.
Global Brands, Design Thinking and Customer Experience Approaches
Nordstrom’s in-store sunglasses app, Starbucks’ design based on belonging and relaxation, Nike’s interaction with the ski community when launching a new product, Oral-B’s reimagining of children’s toothbrushes, GE Healthcare’s design that transforms the MRI experience, Microsoft’s inclusive product design, IBM’s user-centered innovation, Netflix’s adaptation to changing conditions, and Airbnb’s approach to understanding hosts and guests are examples of companies adopting design thinking on the path towards personalization.
Amazon’s Comprehensive Personalized Customer Experience Design
With the transformation it carried out in 2010 to personalize the customer experience, Amazon adopted a “one size does not fit all” approach and started to offer individualized recommendations using real-time data of its customers on the platform. With this transformation, it activated the “customer who bought” widget to show which similar products other users have purchased after purchasing a product. In addition, it offers various recommendations by predicting which product a customer is most likely to buy in their next order.
Amazon is also known for delivering cargo to its customers very quickly. It does this by using predictive analytics to send a customer’s purchase to the nearest warehouse using the purchases of other people living in that area and other products that can be purchased with that product. In this way, it predicts the next order and delivers the cargo to its customers quickly thanks to the pre-storage of the products. Currently, Amazon earns 35% of its sales from personalized recommendations.
Netflix Adaptation to Changing Conditions
Netflix was founded in 1998 as a DVD-by-mail rental platform (with fewer than 1000 DVDs), and one of the areas in which it has invested the most in the years leading up to its current position as a streaming platform is personalized user experience. From collaborative filter algorithms to personalized movie recommendation systems, from five-star ratings to like/dislike recommendations, from category interest algorithms, from percentage matching to personalized visuals, Netflix has experimented with many new developments, from category interest algorithms to its investment in right-sized original content films, series and documentaries, and from percentage matching to personalized visuals, and has succeeded in building the personalized user experience that it offers today as close to perfect by using existing customer data. Netflix has learned two important lessons from all these years of experience:
All members are not created equal! And the more algorithms, the better!
In 20 years, Netflix has gone from members choosing 2% of the movies recommended by the merchandising system to 80% today. Today, more than 80% of the TV shows and movies Netflix members watch are recommended by Netflix’s personalization algorithms.
To learn more about personalized customer experience, what the companies that are implementing it are doing and how they are doing, you can take a look at the “Focus On Experience: Edition 2” newsletter we published on LinkedIn.
References
https://gibsonbiddle.medium.com/a-brief-history-of-netflix-personalization-1f2debf010a1
https://www.forbes.com/sites/forbesbusinessdevelopmentcouncil/2024/01/31/20-strategies-to-personalize-the-customer-experience/?sh=3540f8bf2342
https://growth.design/case-studies/airbnb-personalization
https://vwo.com/blog/deliver-personalized-recommendations-the-amazon-netflix-way/