How Hyper-Personalization Can Recession-Proof Your Business
How do your customers perceive your brand? Do they consider your product or service indispensable? With concerns of an imminent global economic downturn, customer engagement will be critical in the coming months. An interruption in consumer spending means brands need to make their products or services indispensable for customers while also ensuring customers perceive their brand positively.
Upon feeling economic pressure, customers will prioritize where they spend money. Looking to save wherever they can, consumers will reduce the volume of their communications services, move to cheaper plans, or cancel their services entirely when facing financial duress.
However, despite what we know about consumer spending during economic downturns, many companies continue to apply broad, channel-driven marketing strategies to engage their customers. This exposes them to increased churn risk both now and in the future.
Instead, organizations need a hyper-personalization strategy to meet customers where they are and give them consistent, quality experiences, regardless of channel, while offering true value. Investing in this strategy now can significantly impact business performance down the road. Here’s how organizations can jump-start their hyper-personalization journeys for stronger customer relationships that can continue throughout times of economic downturn.
Go From Reactive to Proactive
Engaging with each customer individually gives businesses flexibility and resiliency in case a recession—or any other significant event—happens. Communications companies have a unique opportunity to effectively transform their approach to customer engagement while creating long-term value for their business. This happens by talking to customers directly, empathetically, and via their preferred method of communication. Companies can engage customers digitally via a call center, or proactively through their preferred method while leveraging resources like call center support. Doing so not only improves customer engagement; it also lowers the cost of service. This approach allows a transformation from a reactive engagement strategy to an empathetic, proactive form of customer engagement.
Seize the Opportunity for Personalization
In this model of customer engagement, retention is an opportunity to positively impact customer experience throughout the use of a brand’s product or service. Instead of blanket offers and actions available to most customers, leverage first-party data to identify the right action for the customer. Use data to understand individual customer’s preferences, context, and current plans, to know who may benefit from an upgrade, and who would appreciate a call regarding a new, lower-cost plan.
Given today’s economic climate, if a brand has data to indicate a customer is facing financial hardship and is thinking of cutting their service, hyper-personalization becomes a critical tool. Instead of sending them an email about a new expensive service, take a more empathetic and personalized approach by offering a more attainable plan, a one-time adjustment, and/or set up a payment plan to ensure they can continue to use their services in a way that works for them before the customer even reaches out for help. This individualized level of service fundamentally and positively changes customers’ perception of a brand, as they gain real value from the interactions a brand provides vs. typical marketing noise. While not all of these customer interactions immediately increase revenue, creating happier, long-term clients that remain loyal through a recession ultimately will have positive impacts on a brand’s bottom line.
Make Your Customer Data Count
How can you collect the first-party information mentioned above to make strategic decisions? The data is available from many different sources. Customers leave cookie crumbs by interacting and engaging with a brand—usage information, search history on a website, app pages viewed, etc., in addition to information collected from interactions with front-line teams. Leveraging this information with the power of AI and real-time data analytics opens a new world of opportunities to engage with customers and change their outcomes.
This rich first-party data can be used to enable predictive and adaptive models, provide contextual levers, enable value calculations, and influence business levers instantly. Brands using this strategy can meet customers exactly where they are in any given moment with the right next best offer, action, and experience to re-engage them. This allows brands to prepare for customers’ changing needs, anticipating and delivering what they need before they even ask for it.
Create a One-to-One Plan for Each Customer
Brands need ways to activate their first-party data in the best way possible to create custom approaches for each customer. Technology plays a critical role here: AI-powered central decision engines ingest data from many different sources and platforms to activate information with proactive customer engagements. This technology powers coordinated, relevant, empathetic responses that provide the right next best action for each customer based on their real-time needs. Especially critical for choosing the right outcome for a customer is the ability to analyze factors like propensity to buy, context, and potential value.
It’s important to remember that retention is not a one-time event, but a series of customer engagements over their entire tenure using a service or product. The right tool, powered by the right formula, allows brands to perform actions that drive customer retention over their entire customer journey—not just once a brand has won a customer’s business.
A strong customer engagement approach is always good for business, regardless of current market conditions. In a recession, however, customer engagement becomes an essential future-proofing strategy. Being able to correctly interpret each customer’s needs in real time with appropriate responses allows brands to weather market downturns, deliver customer engagement, and most importantly, create lifelong relationships that are mutually beneficial. Leveraging these capabilities will enable brands to drive significant impact, starting a value generation machine for years to come, while also setting themselves up for explosive growth when economic conditions eventually rebound.
Axel Wells is industry principal and senior director, communications and media, at Pega. Wells has more than 25 years of experience in the communications industry, including leading marketing efforts, customer base management, and decisioning approaches. At Pega, he is responsible for helping drive the go-to-market strategy in North America, developing customer engagement strategies for the world’s leading communications and media companies.