Personalization that leads to customer loyalty: Examples & Strategies

Introduction

As a consumer, it can feel like most companies know everything about you and what you like. Brands are becoming more aware of the effects of personalized communications and their potential to increase sales and brand loyalty. 

Research shows that personalization not only works, but that customers actually want (or even expect) it. According to Accenture, “81% of consumers want brands to get to know them” and understand their wants and needs.

Why is personalization important? 

Personalized marketing is used to engage customers at an individual level. This makes them feel like brands are tuned into their unique preferences, which in turn increases emotional loyalty by establishing a relationship of trust and appreciation:

• Care and commitment – brands that cater to individual needs show that they care
• Reciprocity – customers are more likely to engage with brands that show this level of commitment

Customers who receive personalized offers ultimately end up making more purchases. On top of that, a recent survey by Bond Brand Loyalty found that businesses that personalize see an increase in customer satisfaction. Take a look at our post on the psychology behind customer loyalty to understand more about how these factors work. 

How to use personalization in your business

1. Collecting data via a loyalty program
   Data is the lifeforce of personalization, and a loyalty program gives you the foundation you need to collect insightful data. Loyalty programs can collect information about customer purchasing habits and preferences so that you can strategically target them. 
    
2. Targeted emails
   Collecting customer data through a loyalty program also allows you to deliver the right messages at the right time. Relevant messages are more likely to engage readers and persuade them to take action.
    
3. Product recommendations
   Purchase data will allow you to create individualized recommendations for your customer. This can influence them to buy products that they didn’t even realize they needed…
    
4. Personalized rewards
   Add a level of personalization to your customer’s experience by offering them rewards that you know they will want and use. This allows your customers to interact with your brand on their terms, and makes it more likely for them to stay engaged with and loyal to your business.

PERSONALIZATION STRATEGY EXAMPLES TO LEARN FROM

• AMAZON

Amazon’s recommendation algorithm is a strong example of personalization. The website intelligently creates tailored customer experiences by suggesting products based on previous buying habits, bundling products that are “frequently bought together”, and even showing what “other customers who bought this item also bought”. Such a strategy makes the customer buying experience as easy as possible by sparing customers from having to search the whole site to find relevant items.

Key takeaway: use personalization to make your customer’s purchasing journey easier

• COCA-COLA

Almost 10 years ago, Coca-Cola launched its famous ‘Share a Coke’ campaign, which still serves as an original and effective example of personalized marketing. The campaign replaced the classic drink’s logo with customer names, encouraging them to buy drinks for friends and family and share them on social media. Coca-Cola revealed that the campaign caused a rise in sales for the first time in over a decade: “This campaign taught us that personalization can be highly engaging and effective, especially if it can be shared with a wide audience”. 

Key takeaway: personalization can make marketing campaigns more effective by making them sharable

• NIKE+

Nike allows its members to scan a QR code to check in when they visit a Nike shop to receive an ultra-personalized shopping experience. Their personalized loyalty program gathers data about their customers (such as clothing size, sports preferences, and location) to give them expert recommendations. Customers can also reserve shoes online to try on in-store at a later point: “items are placed in a locker with the person’s name on, which they can then unlock with their phones once in-store”.

Key takeaway: using data and personalization to connect digital and in-store channels creates an engaging shopping experience

• SPOTIFY

Popular music platform Spotify personalizes user experience straight from the home page. When new users sign up, they are asked to select some of their favourite artists and genres. Spotify then begins to curate playlists and suggestions based on each customer’s listening preferences. But that’s only the start. 

The app also intelligently creates additional playlists the more users interact with it. Spotify editors put together specific catalogues based on certain moods or “moments” that are tailored to each listener. 

Oskar Stal, VP of Personalization at Spotify says that playlists like “Songs to Sing in the Car might not look personalized, but they are. Each person sees music that fits that categorization, but that is also in line with what they enjoy listening to. There isn’t just one Spotify experience. There’s more like 365 million different experiences—one for each user—that’s deeply personalized to their wants and needs”. The brand also creates highly personalized marketing campaigns to show its users their highlights of the year. Released each December for the past 5 years, the campaign compiles visual data for each listener’s activity and prompts them to share it on social media. 
 

Integrating personalization into their app has allowed Spotify to increase the likelihood of users interacting with the brand because it ensures there is always more relevant content for them to discover. The brand’s engineers understood that users will enjoy Spotify the most if they can find more to listen to, but most listeners don’t have the time to seek new content on their own. As a result, Spotify uses machine learning technology to better understand how listeners relate to content, giving them more personalized recommendations every day. 
 

Key takeaway: keep your customers engaged by using their data to suggest more content relevant to their interests

HOW TO ACHIEVE PERSONALISATION

To get started with personalisation, you need to begin with customer data. Having a single system that creates a 360 view of each customer will allow you to understand more about their demographics, transactional behaviour, engagement stats, personal preferences and more. 

A loyalty program is the ideal starting point for this. You can also use AI to do most of the legwork. Just as Amazon and Spotify use machine learning to create recommendations, AI modelling can be used in loyalty programs to help you find insights within your customer database.