According to McKinsey, companies excelling at customer experience personalization can generate 40% more revenue from marketing activities than average players in 2023. On top of that, Accenture data suggests that 83% of consumers are willing to share their data for a personalized experience. 

Therefore, it’s evident: the stage is set, and the right time to personalize customer experience is now. This is also why 36% of companies in AMER consider this a top priority and plan to invest more resources in it.

But the question is, how do you go about personalizing customer experience? What are the steps you must take to develop a solid strategy that brings the maximum ROI?

In this blog post, we’ll explore the step-by-step process for successfully creating a personalized experience for your buyers and building a loyal customer base. 

What is a personalized customer experience?

Personalized customer experience focuses on making your customers feel special and understood. It's like being a great host at a party—you remember your guests' preferences, anticipate their needs, and make them feel right at home.

For brands, this means getting to know your customers on a deeper level—understanding what makes them tick, what they like, and what they're looking for when they interact with your brand. Then, you use this knowledge to tailor their experience just for them.

According to a 2024 Deloitte report, 50% more brands now consider personalization a core component of their customer strategy compared to two years ago. Additionally, brands plan to increase spending on personalization by an average of 29% in 2024. 

Key elements of personalization

• Understanding individual customer preferences
• Anticipating their needs
• Tailoring interactions across all touchpoints regardless of channels 
• Creating seamless experiences across storefronts
  

Think of it as the difference between walking into a store where nobody knows you versus your favorite local coffee shop where the barista starts making your usual order as soon as you walk in. That's the kind of personalized touch we're talking about but on a larger scale.

Benefits of a personalized customer experience

Mckinsey notes that a significant 71% of consumers expect personalized interactions from companies, and 76% express frustration when these expectations are unmet. With that in mind, let us explore the top four benefits of highly personalized customer experiences:

1.Boosts customer engagement 

According to a 2024 Statista survey, 51% of marketers report improved customer experience as one of the main benefits of a personalization strategy. Such strategies prompt users to interact with your branded messages and content, which in turn increases customer engagement, improves in-store experience and results in more sales.

2.Increases revenue

Personalized customer experience has the potential to increase brand revenue. The Deloitte study indicates that more than 8 in 10 consumers point to personalized offers as a significant influence on their purchase decisions. Clearly, marketers should leverage these tactics and position their brands as the top choice among their customers. 

3.Improves customer satisfaction

According to the 2024 Deloitte study, brands that make personalization efforts experience 57% more customer satisfaction than brands that are yet to streamline their efforts. 

Tailored product recommendations, optimized user interactions, and swift responses often make customers feel more understood and valued, resulting in higher customer satisfaction. And as the saying goes, a satisfied customer means a loyal customer.

4.Builds customer trust

When you actively listen to your customers and use their feedback to design unique user experiences, it sends a clear message that your brand genuinely cares about their needs and preferences. 

In fact, consumers expect brands to demonstrate whether they know them on a personal level. However, they prioritize tangible benefits from personalization, with 78% wanting it to help them save money.

7 steps to create a personalized customer experience

According to the Deloitte report, personalization leaders outperform low-maturity brands across several key metrics, such as:

• Conversion rate: 54% for personalization leaders vs. 38% for low-maturity brands
• Customer satisfaction: 61% vs. 37%
• Lifetime value: 57% vs. 29%
• Customer engagement: 61% vs. 44%
  

These statistics highlight the effectiveness of well-executed personalization tactics. To ensure you also develop such an impactful strategy and reap the benefits, follow this step-by-step process:

1. Learn about your customers

You cannot deliver personalized customer experiences without understanding your customers. So, go beyond the basic information by comprehensively using AI for customer experience and identifying what they need.

For example, you can analyze these data points using ML and NLP algorithms to build customer personas and understand your audience better:

• Basic information: Name, age, address, email, phone number, and date of birth
• Demographics: Location, lifestyle, culture, marital status, job title, and income 
• Product-related: Pain points, interests, challenges, goals, and desires
• Consumer behavior: Pages viewed, time on site, items on wishlist, items added to cart, and social media engagement
• Repeat customer data: Past purchases, average order value, customer lifetime value, and the time interval between purchases

Subsequently, consolidate these data points from email and marketing software solutions, CRMs, and content management systems into a single database to streamline your personalization efforts. 

2. Segment your customers

Customer segmentation is another key component of your personalization strategy. It involves classifying your audience into different groups based on their shared personalities, which will help you target diverse customer groups with super-focussed messages, resonating with your audience and driving more responses. 

To help you get started, segment your traffic based on the following conditions: 

• Geolocation/IP address: Group people from the same city, state, and country
• Traffic sources: Organic search, social media links, pay-per-click, special offers using influencers' links, and email marketing
• Behaviors: Page visits, clicks, downloads, and video plays 
• Customer stage: New leads, repeat buyers, cart abandoners, VIP customers, and newsletter subscribers 

You can try the Engage module of Plivo CX to appropriately segment your customers based on key attributes. No coding is required. 

Simply import contacts from various sources like your eCommerce store, landing pages, and forms. Gain a comprehensive view of your customers with insights into their activity and purchase history. Then, utilize the intuitive segment builder to create targeted audiences based on specific attributes, enabling personalized messaging and effective marketing campaigns.

3. Test personalization efforts across channels

Embracing omnichannel support helps you reach customers through the communication channel they prefer the most. Once you've completed the basic setup, test and optimize your personalization efforts across different channels. You can do it this way: 

1. Choose the proper channels for personalizing content, communication, and products. 
2. Next, start small by showing relevant languages, currencies, and shipping details based on different customers’ location data. 
3. You can also try suggesting relevant products based on each customer’s job, income, and purchase behavior.

Another great way to implement personalized product recommendations is by displaying ‘Bestsellers,’ ‘Frequently Bought Together,’ ‘Most Popular,’ and ‘Continue Shopping’ lists to help customers pick up where they left off and find relevant items based on their previous purchases.

As an all-in-one, omnichannel customer service platform, Plivo CX comes with a unified agent desktop that brings together multiple channels, like email, voice, SMS, WhatsApp, and live chat, in a single window pane. 

Agents no longer need to switch between channels to find the 360° customer context and offer effective solutions. On the other hand, customers can approach your brand on their preferred channels, making this a win-win feature for both stakeholders. 

4. Gather customer feedback

Since customers' needs and expectations evolve constantly, it's essential to monitor satisfaction levels and modify brand strategies. Gather customer feedback and use analytics tools to understand what works and what doesn't. 

You can also create different types of surveys—single-answer questions, multiple-choice, dropdown, emojis, and numerical scales—and embed them on your website, blog page, emails, checkout pages, and mobile app to collect feedback. 

Plivo CX offers comprehensive Metrics & Reporting so that you can execute real-time monitoring of queue, operations, and agent performance. With historical reports, assess past performance to identify trends and areas for improvement. The tool also lets you gather customer feedback to measure satisfaction and identify improvement opportunities.

💡Tip: Wondering how to get started? Use simple questions such as “How do you like our personalized recommendations?” or “How likely are you to recommend our products to your friend?” that customers can answer on a scale of 1 to 5. 

5. Adopt real-time customer engagement

Real-time customer engagement can enhance the efficiency of your personalization strategies and increase conversion rates. You can achieve this by contacting customers on social media platforms, sending personalized push notifications, and using gamification. 

Give your customers instant support with Plivo CX's smart self-service chatbots. These OpenAI-powered bots can handle routine inquiries, so customers get quick answers 24/7. Plus, you can train the bots with custom datasets to ensure maximum relevancy in responses. 

This intelligent solution not only reduces response times but also frees up agents to focus on higher-value tasks, leading to a more productive and customer-centric support team working towards hyperfocused customer engagement.

Read more: Automation in Action: 6 Ways Companies Are Nailing Customer Service

6. Leverage AI to boost personalization

Using Artificial Intelligence (AI) technologies can help you personalize customer experience at scale. AI tools can effectively analyze large amounts of customer data to identify patterns, understand expectations, and anticipate needs. 

This will allow you to offer tailored product recommendations for each customer and proactively address their issues. 

Plivo CX goes beyond basic chatbot functionality by incorporating advanced AI capabilities to streamline your customer service operations. Our AI engine can intelligently categorize and prioritize incoming tickets, ensuring that urgent issues are addressed promptly. 

Furthermore, you can customize AI agents with guardrails to reflect your brand's identity, policies, and processes. This ensures that your AI stays on topic and consistently aligns with your company's standards, providing a cohesive and engaging customer experience.

7. Ensure data privacy

Here are some tips to help you secure customer data and prevent potential data breaches:

• Use password management tools to create and store complex passwords 
• Limit data access to support agents and marketing managers
• Eliminate data silos and store customers' data in a unified, secured place  
• Ensure the personalization tool you use complies with industry regulations such as GDPR, HIPAA, CCPA, PCI DSS, and SOC 2 to protect customer data
• Conduct regular security audits and assessments to detect any new threats

When it comes to data security, Plivo CX takes complete security ownership of your data. We employ a multi-layered approach to security, encompassing physical, network, application, and data protection measures. 

Our infrastructure is hosted in state-of-the-art facilities with 24/7 surveillance and strict access controls. All data is encrypted in transit and at rest, and we maintain strict access limitations to protect sensitive information. 

Plus, we undergo regular audits to ensure compliance with industry standards like SOC 2, HIPAA/HITECH, PCI DSS, ISO 27001:2022, and so on. 

Enjoy the benefits of personalized customer experience with Plivo CX

Modern customers expect personalized customer experiences across all channels, from voice calls, emails, texts, live chat, or social media. Therefore, generic content and product recommendations don’t cut it anymore and could bleed you out in the competition. 

The Service module of Plivo CX offers a comprehensive suite of features to help you better understand customers’ expectations and deliver personalized experiences. The platform's intuitive AI-powered chatbots, IVR, omnichannel support, and unified agent desktop can help you live up to their expectations with prompt and nuanced responses. 

On the other hand, in the Engage module of Plivo CX, you can use a handy segment builder to target specific audiences based on specific attributes. 

Finally, the tool is GDPR, SOC-2, HIPAA, and CPRA compliant. Therefore, there are no concerns about data security or cyber threats.  

Ready to take your personalization game to the next level? 

Book a demo today!