Point of View
“Segment of One” - personalized customer experiences
Nowadays, consumer centricity has become a relevant topic for companies everywhere. In order to build profitable, long-term relationships with customers, the demands and preferences of customers have to be at the center of the organization.
In doing so, the concept of personalization has become an effective tool – this translates to tailoring experiences or communication with the help of information gathered about the recipient.
It is expected that by the end of 2023, more than 80% of midsize companies and large global enterprises will have implemented a personalized customer experience. The latter refers to an effort of the company to adjust the experience to a specific customer, or, in the case of anonymous customers, to a certain persona based on available and legally permissible personal information about the recipient.
For customer centricity, delivering tailored products and services is of utmost importance – thus, by providing a variety of fixed options to choose from and combine, one can decide upon a final product or service. The rise of social media and digital costumer touchpoints have played an important part, while consumers have been empowered to dictate what they want their products and services of choice to look like. Consequently, providing them with standard, single-choice options is not viable and will most likely fade as the years go by.
A question arises – is the customization of products and services worth it?
We believe it is! The increased level of customization can lead to sustainable customer satisfaction and willingness to pay – customers long for the feeling of exclusivity! From a sales perspective, a personalized CX and product/service experience for each customer service will slowly, but surely, become the new reality, as studies from the last decade have shown that customers are willing to pay a significant premium for customized products and services, with one in three customers expressing their preference for such purchases.
If we were to take this to the extreme, we would be faced with the ’’Segment of one’’. The starting point, standardized products and services, would shift into tailored experiences through mass personalization. The latter can occur through data collection, which would ultimately provide companies with a broad set of standardized products or services, for different consumer segments. The final step would be individualization, also known as the ’’Segment of one’’, a rather old marketing concept, which emerges from tracking individual online activities. The collected information can be output in ’’activity maps’’, which ultimately facilitate the identification of preference patterns, therefor enabling targeted marketing activities.
Only time can tell whether or not our society will turn to a bespoke approach, that would shift consumer experiences from mediocrity to exclusivity. While we wait to see, we can state that doing so would certainly allow you to charge more for your products or services.