October 9, 2012

The Science of Personalization: How to Engineer Happy Customers

The Science of Personalization: How to Engineer Happy Customers

If there's one defining lesson that stands above all the rest when it comes to customer interaction, it is this: customers love personalized service, and they're even willing to pay more for it.

But just how far does this effect go?

According to some interesting psychological research on the matter, absurdly far.

You'll even get a peak at a study that shows how personalization made the evil Rasputin seem like an "okay guy" to some people... and it only gets weirder from there!

Let's dig in...

How to Use Enhanced Personalization for More Sales

Despite what we might say out loud, as a whole, people are generally positive about themselves and because of this, they have a predisposition to be more favorable to things that "resemble" them in some way.

This explains the strange results of studies like this that show, statistically, there are more people named "Louis" in St. Louis and people named Denise and Dennis are more frequently dentists than other names.

It's a construct called Implicit Egotism, and it helps to explain a lot of the oddities when it comes to things like personal preference and ownership bias, such as why the things we own seem more valuable to us, even if someone else has the same thing.

It aids us in explaining the teaser fact in the first paragraph: those people who thought they shared the birthday with the "mad monk" Grigori Rasputin held a far better impression of him and his acts in history.

Bottom line: We like things that relate to us, in fact, we like them so much that the connections needed to trigger our favoritism are often quite strange.

Utilizing this information for your small business, however, doesn't need to be nearly as strange.

In the quest to create loyal customers, this information can be used to gain an IMMENSE head start in creating an exceptional customer experience that keeps people coming back.

I don't want to limit your creativity, but here are a few ways that you can get started right now...

Define Your Ideal Customer... Down to the Last Detail

All of this begins with defining just who your ideal groups of customers are (many businesses often have more than one type of customer).

When people come across your products or services, identify which sorts of people are going to say, "Ah, yes, this is exactly what I needed!"

Don't get vague: web designers shouldn't label their customers as, "People who need a website," it should be closer to something like...

People who need a fast, affordable website with minimal features and an emphasis on a very personal small-businesses feel, avoiding the "corporate" look at all costs.

When you segment your customers into these sorts of groups, you'll know exactly how you can "WOW" them and appeal to their implicit biases because you'll know exactly who they are.

While your own insight is certainly important, go beyond your gut: do an analysis of current and past customers, find out what keeps them up at night.

Only then can you adjust the way you sell in order to appeal to their every desire.

A great way to do this is to create "customer profiles" of who these customers are, outlining their needs, pain points, and how your offering fills the gap.

Have an idea of who your ideal customers are? Here are a few tips on how you can implement that information into your sales & engagement strategy today...

1. Craft your brand image to appeal to ideal customers

It's no wonder that organizations like the AARP use the spokesmen (and women) that they do, right?

They are often well known celebrities in their 60's and up, because who would want to listen to a young person discuss the difficulties of preparing for retirement? Nobody, because it's not genuine and doesn't speak to the people who need the service.

Similarly, your brand image needs to focus entirely on your customers.

An "explainer video" (something many tech startups use) isn't going to be very effective if you're selling hearing aids, but when you're selling trendy web software, it will be much more likely to connect with your audience.

Take a page from political campaigns: many candidates often run as the "no frills average Joe", despite having immense wealth and business experience: it's about showcasing the traits that appeal to customers, or in this case, voters.

2. Capture testimonials that speak to your ideal customer

Testimonials are a powerful form of social proof that have been proven to create interested and engaged customers, especially if it's their first encounter with your business.

One thing that many companies do wrong, however, is that they just utilize whatever testimonial they like the most.

What we've seen through this research, however, is that people like stuff that relates to them. Your testimonials should reflect this as well.

How?

Since you can't take individual traits into account for every customer (you can't share the same birthday with everyone!), you can utilize broad information on those ideal customers we mentioned above.

Do your products & services ideally sell to small business owners who aren't very technical? Look for comments that your customers had on your product's simplicity and how easy it was for them to get started.

Selling to a highly technical crowd in the hosting field? Find testimonials that emphasize the superlative features that you offer and why you'll ensure amazing uptime.

Testimonials like, "Awesome service!", are too vague to speak to your ideal customer, so find something that does.

3. Get on their level

Here's some interesting data from usage of Help Scout:

Over a 90-day period, we saw an open rate of 41% for our "Fancy" template, which looks more professional thanks to some additional formatting.



However, we saw a 62% open rate on our "Plain" template, which looks more personalized. That's over a 50% increase!

Why do you think this was the case?

The normal email got opened more because... it was normal! It looked like a personal message from someone, and thus the customer was more likely to take action.

Use the tools your customers use and be where they want you to be: I've discussed before how one key factor for improving your online service is knowing what channel your customers prefer.

Many companies that sell "sandbox" sorts of software (that allow for customization) create forums and communities for customers, because in that instance, connecting with other customers is actually an amazing way to do support and to get to know the product better.

On the other hand, customers buying antiques off of eBay are going to want an easy way to get a hold of you via email and NOTHING else... they don't need forums and live chat (and probably don't know how to use them).

Cater your tools and channels to your customers' needs at every turn, and they'll reward you with more business.

Your Turn

Help me Help Scout reader, you're my only hope!

Here's what to do next...

  • Let me know in the comments what you thought about this research. Do you know any brands who you feel speak directly to you?
  • Find out more ways to rock your customers' world with our free e-Book on 25 Ways to Thank Your Customers.

That's all she wrote, thanks for reading and I'll see you in the comments!

Buffer

Written by Gregory Ciotti Greg ciotti

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3 Comments

Taylor Brooks Oct 17

Regarding #3...

How is the template affect the open rate? The template isn't seen until after the email is open so it shouldn't be a factor.

Nick Francis Oct 17

@taylor thanks for the comment! Couple reasons why we feel the open rate is still telling:

1- Those templates have different pre-headers ... the plain text one with a better message preview. We're going to make them consistent for both templates now that we've seen this data.

2- If you know how "opens" are tracked via a single pixel in the email, you know the image must be loaded in order for the message to be "opened". Clearly people were much more likely to load the tracking pixel (in most clients, click the "load images" link) when they saw the more personalized template.

50% better is substantial, so these two reasons are our best guesses as to why. In both cases, the customer is responding to something that is more personalized.

We've got more data we're compiling on response rates and personalization, so stay tuned. :-)

Shane Nov 1

I'm sorry Nick but Taylor is correct

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