How Much Personalization Is Too Much?

The idea of personalized customer service is nothing new. Small businesses, neighborhood shops, and concierge services have long understood the value of the “know thy customer” mantra. Whether it’s knowing a regular customer’s coffee order by heart or remembering their size and style preferences, having insight into who your customers are and what they want goes a long way.

As customer expectations continue to evolve and companies look to differentiate themselves from the competition, a personalized and easy experience is rising to the top as a key pillar for long-term customer loyalty in virtually every industry. Yet there is still a disconnect between what consumers want and what companies are actually focusing on.  According to a recent IDC survey, nearly 67 percent of consumers said that customer satisfaction was more important than price when doing business with a company. Unfortunately, nearly 30 percent of companies are still prioritizing cost savings over customer satisfaction. And it can take just one bad experience to send a customer running into the arms of a competitor. 

We’ve entered an era where customer service can’t just be a check box anymore. Knowing who your customers are and how they want to be served is critical to creating the types of experiences that breed long-term loyalty. However, knowing this information requires data sharing and collection, which then leads to the question: “How much information sharing is too much?” Balancing the desire for personalized experiences with privacy concerns is something many digital-first companies are grappling with. And it makes sense. 

Not too long ago there was only a couple of ways for companies to engage with their customers—phone or email. And most customers accepted the reality “average” customer service was about the best they could expect. But times have changed. Thanks to our 24/7 on-demand lifestyles, customers now expect companies they do business with to be available when they want them—and more importantly—in their preferred channel (phone, email, social, live chat, self-service, etc.). And as they move through channels, each engagement should provide a consistent, personalized, and valuable experience every time. 

Knowing that collecting data is essential to creating these experiences, customers seem willing to provide it when the data is used to create actual value. No one wants to be proactively prompted with a recommendation on a shirt that is already sold out in or to have the same information shared multiple times. On the other hand, knowing that you are in shopping mode and being prompted with a recommendation on a pair of shoes that match an outfit you purchased last week would likely be a welcome surprise. 

Making Valuable Personalization a Reality

Once a company understands the types of tailored customer experiences and communications that can move the needle, the next step is creating an infrastructure that will help you make these engagements a reality. With the increased popularity of e-commerce and social channels, companies are sitting on a wealth of data that can provide insights into customer preferences, including past purchasing history, age, gender, etc. Having this data accessible and all in one view allows agents and bots alike to create a richer, more seamless, and personalized experience. Based on previous interactions, an agent should be able to quickly understand—and maybe even predict—why a customer is reaching out so they can start working on the question or issue immediately. Additionally, historical insight into the customer’s journey can give a company a better sense of what it will take for a particular customer to click “buy.”

Data also makes it possible for companies to reach out to customers proactively instead of waiting for a problem to arise. Depending on the company, data can also be used to trigger automated or human-assisted interactions when a product or service may not be working properly or share more insight into what point during a customer journey assistance is needed.

But What About Privacy?

As we embark in this era of personalized and proactive customer service, it’s natural for privacy to be a concern. We regularly see news stories about data breaches or misuse of personal information, so data privacy is top of mind for everybody. But while collecting data to deliver personalized content does create new risks associated with storing and managing that data, the reality is that these risks (and the perception of risk) can be addressed through standards and methods that customers have relied on for years. We confidently share names and addresses, payment card information, and Social Security numbers with companies every single day. The difference is this information is staunchly protected by encryption and other standards and protocols. If we look at other personal information—like preferences and history—as critically and secured them as resolutely, the privacy fear would be greatly minimized.

If the events of the past few months have taught us anything, it is that companies should be transparent about what information they are capturing, how it is going to be used, and how they are securing it. Customers should also take the time to understand these practices and determine for themselves how much personal information they are willing to share in exchange for a better customer experience.  

What Is Next?

It’s hard to predict exactly what the future will hold, but it’s an exciting time to be a customer. The power and decision of how and who we want to do business with is in our hands. Companies that aren’t thinking holistically about how to adapt to this changing landscape are starting to see the effect. In fact, Forrester found that “poor customer service causes consumers to abandon intended purchases, which translated to an estimated $62 billion in lost sales in the United States in 2015—an alarming 51 percent increase over the previous two years.”

Delivering a customer experience that is a true differentiator is not an easy task, but it is well worth it when you consider the long-term benefits. The window of opportunity is quickly closing as customers begin to lose patience with companies who don’t meet their needs. Customer experience is no longer just a marketing or sales initiative but needs to be a priority for every single business function. Only when “customer first” becomes a key part of a company’s culture will it be able to provide the right balance of personalization and privacy that not only creates confidence but delivers the type of experience that today’s modern customers require.

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Ryan J. Lester is director of customer engagement technologies at LogMeIn. He and his team own the strategic development and implementation for the go-to-market plan for chatbot and augmented reality products at LogMeIn. Lester is passionate about making new technology easy and helping companies unlock new value from these tools. Prior to LogMeIn, he held various sales, marketing, and product positions at Intel Corporation, Cisco Systems and Eaton Corporation.