This is part of a series of posts on modern approaches to customer loyalty aimed at improving it through customer engagement. A fuller discussion is available in my new book, You Can’t Buy Customer Loyalty, But You Can Earn It.
Lots of CRM vendors talk about personalization but their idea of how to do it leaves a lot to be desired. They do personalization very late using a just in time approach to accessing customer data to support a sales or service encounter in the moment. This certainly is important and it achieves the goal of personalizing the encounter by producing a catalogue of data including the customer’s history, demographics, and other relevant information that a customer-facing employee can use. With it the employee or automated process can make intelligent decisions in the moment and implement, among other things, next best actions or offers. So there’s a lot to like with this form of personalization.
But why wait until you’re in the moment of truth to personalize? This kind of personalization implies, or should imply, another form that’s further upstream from the moment and that might provide greater benefits. In my last two books, I’ve written a lot about moments of truth. Briefly, they should be predictable and every business ought to know what they are. Typically, customers experience moments of truth, times when they want or need something from a vendor that the vendor should be able to provide.
Moments of truth are driven by reasonable expectations that are based on marketing, brand promises, or the nature of a product or service. For example, there is an expectation of ease of use for most electronics today. That’s a vague idea, but its based on the vendor’s responsibility to research customer attitudes and habits, to start with, and then to design solutions to the expectations that arise from them.
When a vendor takes on understanding moments of truth and succeeds, the results can be powerful. One of my favorite examples is Starbuck’s loyalty program mediated by its mobile app. Starbucks started by trying to figure out how it could enhance its customers’ store experience and discovered that at busy times, customers had to wait in two lines—one line for ordering and another for pickup—and that waiting could detract from the overall experience. Eliminating the wait time became one of the drivers for the mobile app that lets people order and pay from their phones even while en route to the store. Upon arrival, it is now a simple matter of picking up the order.
With its app, Starbucks gave customers the ability to customize or personalize their visit, the onus is on the customer to personalize the experience now and there’s little need to crunch massive amounts of data.
Proactive personalization doesn’t require a mobile app though many businesses have made great use of the smartphone as a platform. Another great example of personalization is Hilton Hotels and its HHonors app. With it, customers can make a reservation, see a map of the property and select a room, order services, and even turn the phone into a room key. It’s similar to Starbucks in that Hilton puts control of many aspects of the experience in the palm of a customer’s hands.
As we’ve seen, personalization can mean many things and it’s not always about data or certainly not just data—it implies relationships. For this reason, community can have a big impact on how a vendor approaches customers. In most of my research, it is hard to come across any situation where a vendor maintained tight control of the information customers could access and fostered good relationships. In most cases, personalization involved giving up that control in favor of giving customers the ability to control their destinies. It involves an amount of trust, but I can’t think of a situation where trusting customers wasn’t a good idea.
A final case in point is SOL Republic. They make headphones, but the founders decided to excel at relationships and their business model treats their products as part of a music-oriented lifestyle. In fact SOL stands for soundtrack of life. In a very low-tech approach, this company encourages its customers to interact in a community to share ideas about music, new groups, and experiences. Their customers are phenomenally loyal to each other and also to the brand and you can’t get a more personalized experience than a one-to-one interaction with a kindred soul.
The point of proactive personalization is that it gives some of the personalization power to customers, which enables vendors to maintain a kind of loose-tight hold on them. It’s the same relationship a baseball player has with a bat, holding on tight but in a relaxed way that enables the player to make a split-second decision on whether to swing or hold up. In today’s markets, with churn rampant in so many sectors, this can take a bit of courage for the vendor, but it demonstrates an amount of trust in the customer and most often the trust is rewarded.