Evaluating the Personalized Customer Experience in Retail: 5 Key Lessons
In recent months, we conducted two distinct audits as part of an ongoing series to understand how well brands are capturing and using customer data to deliver personalized marketing experiences. The first Customer Experience Audit focused on women’s retail; the second looked at lifestyle footwear.
In both cases, we created distinct audit “shoppers” to interact with 10 brands across 10 unique touchpoints, from email engagement to digital ad targeting and purchasing to relevant website personalization. We measured the level of personalization for each brand, and each audit delivered over a hundred pages detailing and ranking the view of the personalized customer experience delivered by chosen brands.
Some results were surprising, some less so. There were recurring themes we observed (to tie with the five observations listed below) throughout the audits that can serve as interesting lessons to all retailers. Here are the top five.
1. Some brands are doing better than others, but all brands can be doing better.
Out of a possible 100, bottom brands had a score of about 40, and top brands scored about 75. The delta between top and bottom isn't that large — the best isn't wildly better than the worst. Having picked top brands for our audit, we question why results weren't higher by brand or by specific touchpoints. For example, for email capture and execution, we expected most brands to have mastered this foundational tool, but few, if any, really did.
The Lesson: Without exception, there’s opportunity for all brands. They all need to understand where they’re doing well, maintain that standard, and focus on where they’re lagging.
2. Areas needing improvement are obvious; brands don’t need an independent audit to inform them.
In general, retailers know the weaknesses in their customer experience. Why aren’t they improving them? It seems to be a combination of two factors: First, if it works, even if it’s less than optimal, busy marketers scratch it off their list of worries. Second, the C-suite may have identified more pressing issues for marketing to work on, like acquisition, a new app or branding.
The Lesson: Make a case to the CEO that addresses both potential top-line revenue and the improved allocation of resources and focused spending on long-term customer asset building.
3. Across the board, every brand is doing some things well.
All of the retailers we looked at have a high to perfect score for some touchpoints, but it’s being offset by areas where they can do better — sometimes a lot better!
Women’s apparel was found to be strong on message and checkout across the board. They’re brand oriented and have been selling direct for a long time. Before the data and technology shift, it was all about brand, message, experience. Therefore, these companies learned how to excel in those areas. Their next move is to fully leverage technology and insights in a much more strategic approach.
Footwear, however, ran the gamut. Many are manufacturers that are now selling direct: brand and message have always been important, but haven’t translated to marketing and execution. Their strength and proficiency varied by brand; we suspect this is in a large part due to the individuals on their internal marketing teams.
The Lesson: Time for some candid introspection. Create your own audit against your competitors and respond to your findings vs. dismissing them.
4. It all must work together.
Like musicians in a symphony who have never practiced together, too many marketing touchpoints are playing independently. Instead, they need to create a coordinated symphony where the customer is the audience and a marketing maestro delivers a powerful performance. The value of any brand is the cumulative contribution of each individual customer. Therefore, marketing channels should work together to play a motivating performance that moves customers forward in the relationship to generate incremental transactions and value.
Inspecting the audits shows money left on the table. There's an ongoing set of brand-caused hurdles that challenge forward progress. Reducing those hurdles can invite more customers to make repeat purchases.
The Lesson: Multichannel marketing can’t deliver on its promise unless all the pieces are working together, which requires a customer-centric view of the business.
5. There's a gap between brand promise and customer experience.
Looking at a brand’s promise on its website and tracking it to the customer experience, the promise often falls short of expectation. It’s hard to match those lofty ideals with the daily work in the trenches, but how well marketers retain customers should act as a measure of how they’re managing the experience and living up to the brand promise.
Customer and portfolio metrics help marketers see the impact of experience on overall revenue, but for most brands, the P&L is set up by channels and products; customer metrics are nowhere to be found. Marketers are incentivized to maximize revenue within a channel, category, season or style, no matter the experience delivered. By pivoting success to focus on the customer, marketers will be incentivized to create an experience that lives up to the brand promise.
Brands’ lofty promises often speak to treating customers like best friends. We know that best customers are really important, generating 50 percent to 70 percent of revenue, but no one has responsibility for maintaining those relationships. With the right customer metrics in place, a designated marketer can focus on creating an experience to grow relationships with best customers. Our audits show that too often, all customers are treated the same, and often it's sub-promise.
The Lesson: Someone needs to own best customers, good customers, new customers, and prospects, and determine the marketing for each, per the promise made, in an orchestrated fashion.
Nick Godfrey is executive vice president and co-founder of Customer Portfolios, a marketing technology company offering analytics, strategy, marketing execution, creative and technology services.