Outi Nylund: So that I get exactly what I want
Customers want businesses to offer them more personalised benefits,
services and experiences. According to a Forbes Insights survey, three out of
four consumers in the USA want to receive more closely targeted and personally
meaningful benefits in return for the personal information collected on them.
On the other hand, nearly 90% of the companies that already personalise customer encounters to some extent based on customer data tell about the positive effects of targeting on their business operations, such as an increased conversion rate and customer engagement as well as the development of customer experience (Researchscape 2015).
Customer loyalty programmes have always been based on customer data and its use in marketing and business development. Why is it still challenging for companies to leverage customer data so that every single customer would feel that they get personal service tailored to their specific needs on a daily basis?
One of the main reasons is the absence of the basic element, namely customer data needed for personalisation. Sufficient and correct customer data enables a complete picture of the customer to be built. Data is often siloed in different channels or at points of customer encounter, which makes it challenging to build a sufficiently good, real-time overall picture of the customer. In addition, data is available in various sources, both inside and outside the company, among which the data most significant to business operations should be identified.
Although digitisation has enabled companies to reach the customer personally in digital environments, there is little understanding and competence in leveraging new technologies. It is still easy to understand and adopt the benefits of a single technology. But creating a sufficiently good and comprehensive customer experience requires competencies in many different technologies and an understanding of the kind of technology combination and architecture produces the best possible result.
What competencies and skills does a company need to be able to personalize customer encounters in the desired way with the help of technology and data? After finding the answer, the company has to be able to invest in resourcing these competence areas. After that, the most difficult thing is to update the operating models and organization correspondingly, because the development of the customer encounter at the different points of the customer route will not succeed if the old operating models are not abandoned.
A good example from the world of a K-food store: an enormous amount of customer data is available and it can be leveraged in many ways. Nevertheless, vegan customers receive special offers in digital environments targeted based on their diet, but they also get untargeted special offers of sausages direct to their homes.
There are some examples of a good personalised customer experience at a specific stage of the customer’s path. The online store Amazon is well advanced offering personalised, customer data based product recommendations, and the music service Spotify with ”this week’s recommendations just for you.” Likewise, the K-ruoka mobile app offers weekly its customers exactly those products at lower prices which the customer would buy anyway – the application also recommends products that could interest the customer on the basis of the data.
There are many places in the K-Group where people work on customer data leverage, even if we have only started. In that work, we need to look far into the future. The work is challenging but at the same time very rewarding. Providing personalised service to the customer at the K-Group’s physical stores as well as digital environments has been placed in focus. I’m lucky to be part of this development work, taking customer experience to a completely new, personalised level.
Outi Nylund, Customer Relations Director, K Digital Kesko