Not so long ago, companies like Amazon and Facebook did not magically tell us exactly what we want to buy online. But now, consumers increasingly expect companies take their interests and preferences into account.
There are two primary reasons for this
1. Consumers are struggling with information overload, and need brands to strip away some of the work involved with doing business with them. By presenting customers with the exact information they need, their brand engagement and customer experience framework becomes more manageable.
2. People always want more control. When they get something tailored to their interests, they feel more in control which, generates feelings of safety and mastery over their domain.
Our brain is attracted to personalization
In the war for attention, relevance is key. The brain’s reticular activating system (RAS) helps people respond to the world around them. It acts as a filter to organize and prioritize incoming information, while blocking out unimportant information. This “selective attention” favors information that the brain identifies as personally relevant, like how your ears perk up when hearing your name. Companies can make the RAS work for them by customizing their experiences to their consumers as much as possible.
Personalization demands more personalization
Once consumers know what a personalized experience feels like, they demand it from all the companies they do business with – regardless of industry. Salesforce notes that customer expectations have hit all-time highs, and that seven in ten customers say that a company’s understanding of their personal needs influences their loyalty. This means providing greater levels of personalization is crucial to establishing and retaining new customers and sparking positive word-of-mouth in an era of rising competition.
Personalization generates trust
Brand trust is important to 70% of shoppers, and four in ten customers are likely to turn to competitors if they have one bad experience with a brand. When a brand demonstrates it understands the wants and needs of customers, those customers are more likely to see that brand in a positive light and seek out more opportunities to interact with it. Meaning it’s never been more important to get the user experience just right. And that means the more personalization the better.
But it also places greater emphasis on data security
As digital consumption grows, so does online fraud. Fraud losses totaled $56B in 2020, up from $17B in 20191. With 60% of US consumers saying they are uncomfortable with having their data collected2, fraud and identity protection will become an even more defining factor in the future of customer experience from now on. This trend is particularly true for financial institutions where fraud is the #1 reason why consumers leave for a competitor3.
At Experian we know the digital-first personalized experience is here to stay. Companies need to put consumers at the center of the experience and build privacy into products. Empowering consumers and preventing fraud is key to improving the consumer experience, building trust and reducing trust.
DOWNLOAD THE WHITEPAPER: Giving Consumers Control and Enhancing Fraud Prevention by Javelin Strategy & Research
WATCH THE WEBINAR: Empowerment and fraud prevention are key. Javelin and Experian talk about How to improve the consumer experience, build trust and reduce risk.
Sources:
1 Javelin Strategy & Research. March 2021. https://www.javelinstrategy.com/coverage-area/2021-identity-fraud-study-scams
2 Javelin Strategy & Research. August 2021 https://www.javelinstrategy.com/webinar/ethics-behavioral-biometrics
3Javelin Strategy & Research. March 2021 https://www.javelinstrategy.com/coverage-area/2021-identity-fraud-study-scams
