In customer personalization, explicit data matters

According to recent research, customers want to steer the customized experiences and interactions they have with brands. To meet these expectations and improve customer relationships, companies must shake up their data strategies through customer personalization.

Traditional implicit data¸ information data mined to indicate short-term interests or needs, has value in data strategy. However, findings from more than 2,000 hours of Voice of the Customer research interviews with clients such as Gilt Groupe, MassMutual Financial Group, IBM, Hewlett Packard Enterprise and QVC, shows it does not deliver the response rates or meet the expectations of many B2B and business-to-consumer customers. Research findings indicate that today's customers want to drive high levels of relevance and personalization through the explicit preferences they provide. Explicit data is self-profiled preference information customers provide in the preference center of a site or through dialog boxes.

The research also identified eight critical points in brand lifecycles where customers want explicit data-driven personalized engagement:

1. Purchase.
2. Integration of customers.
3. Anticipatory responses to decreasing engagement (visits, responses, purchases).
4. Immediate responses to negative experiences.
5. Surprise-and-delight thank-you's.
6. Value-added cross-selling and upselling of products.
7. Repeat sales.
8. Renewals.

Life Time Fitness uses personalized content to improve the health of their marketing. The company sends 7 million personalized email messages per month, according to predetermined segments, and has seen a 154% return on its investment.

Personalized content improved Life Time Fitness' open rates by 80% during the course of two years to help the company add memberships and increase conversion rates. Member experiences were improved by adding communications before, during and after their time at a Life Time facility. Targeted follow-up email messages addressed any issues or concerns, which reduced unsubscribes by 15% and created additional sales from existing members.

"As marketers, it's less about us understanding what products and services we put in front of [members]. It's more about how we continue to enrich the experience that they're having, ... as well as the relationship they have with Life Time," Keith Dieruf, vice president of digital marketing, said.

"The content of every communication via email, online, mobile texts or mobile notifications [help members] walk through that journey to get them to where they want to go," Renee Main, vice president of marketing, member acquisition and retention, said.

Here are the key explicit data takeaways found:

1. Use customer insights to determine:
   • How your customers define appropriate explicit data.
   • Value exchange for requesting explicit information.
   • Earning the right for progressive profiling.
   • Design of high-value preference centers.
2. Test to determine the right mix between implicit and explicit data. Using only implicit data is not enough to drive true personalization.
3. Design preference data capture for every channel, digital and physical. Every channel must respect preferences and aversions.

The bottom line is customers understand personalization, but they want it to be appropriate, and they want to explicitly customize it. Test this and you will see that it drives increased conversion rates, return visits, and overall engagement and decreases email unsubscribe rates.

For more check out ERDM Voice of the Customer research.