Following the e-commerce explosion that began in 2020, more brands are gravitating toward the direct-to-consumer business model. With that transition comes total control over brand identity and communication; it also means you own your customer data.
For brands that have historically only sold through third-party channels, having access to this incredibly informative, powerful information is both exciting and overwhelming. As the party responsible for each customer’s journey, identifying the channels, tools, and strategies that provide them with the most enjoyable and valuable experience should be a top priority.
Predict Their Needs Before They Buy Somewhere Else
Proactively suggesting products or services to consumers based on data insights is a delicate business. If done brashly or without careful, strategic consideration for where the customer is in the buying cycle, it can feel like being spied or intruded upon, which is often a major turn-off. An ideal exchange should feel as organic as possible, and even better if the customer feels like you are totally tuned in to their needs.
Using predictive analytics software is a given. This technology mines historical data to identify behavioral patterns and market trends based on what’s already happened, then uses that information to predict future outcomes. Sephora is renowned for using customer data to get personalization just right. Standouts on the list of how they accomplish this are a highly individualized digital experience and tiered loyalty program, both of which leverage predictive analytics to promote customized product discovery, earn rewards, and ultimately optimize the user experience.
As the e-commerce landscape becomes more saturated, however, predicting what people are likely to buy is–well–predictable. Those insights can be further enhanced with human-centered AI solutions that combine data analytics with human input to identify more profound needs, desires, and motivators of your customers’ behavior. So instead of aiding them in making an anticipated purchase, you can surprise and delight them by suggesting an item they didn’t realize they needed or wanted until that moment.
Offer Value Add with Personalized Rewards
Customers don’t want to feel like a faceless participant in a program. To earn their attention and loyalty, you have to invest in a relationship with them. Just like any relationship, this requires personalized attention, which is why tiered loyalty programs are on fire. Consumers love them because they are being rewarded with points, options, and other perks for making purchases they likely would have made anyway. Brands love them because they yield long-term engagement and retention among their most desirable customers.
While tiered loyalty programs organize customers by ranks or tiers based on how much they spend, they also enable brands to make highly targeted product recommendations to arguably their best customers. Since this is reliant on purchase patterns, excellent data evaluation and management is required. It’s so important not to wildly jump to purchase intent conclusions based on just one data point, especially with loyal customers. Gathering multiple data points allows you to make well-founded recommendations, proving to your customers that you value them and recognize their needs.
Demonstrate the Utility of Data to Earn Customer Trust
The narrative surrounding online data privacy and sharing is complicated and ever-changing. Not only online shoppers, but everyone who uses the internet has concerns about who has access to their personal and behavioral data, and what they’re doing with it. At the same time, consumers are being given more control over the use of this information.
In just the past few years we’ve seen the emergence of the European Union’s General Data Protection Regulation (GDPR), the California Consumer Privacy Act (CCPA), and most recently, Google’s ban on third-party cookies. But for all the concerns about privacy, many consumers see the value in companies being able to deliver content and solutions that are appropriately targeted to them. In fact, studies have shown that a large majority of online customers have no problem sharing their personal data when they trust a brand will use it to improve their experience.
The customer experience is everything. With no shortage of competitive alternatives, you will be written off in a heartbeat by someone who feels alienated in any way, so abusing the power of data is a major no-no. Use this data privacy revolution to improve personalization efforts. Show customers that they are in control of their data and that it’s safe with you by allowing them to choose what they share, using plain language to explain how your company uses personal data, making privacy policies visible, providing clarity on how passwords are handled, and making it easy to opt out of any unwanted communications.
The personal and behavioral data brands have access to is considerable, but it only offers a window into the life of your customer, not an all-access pass. It’s up to you to use these valuable insights to connect the dots between what your customers are doing, and what they want to do in the future. Provide them with options and solutions tailored to their needs and they will keep coming back.
The opinions expressed here by Inc.com columnists are their own, not those of Inc.com.