Selling products and services through multiple channels offers a number of touch points where you can gather information from customers or potential customers. Most people in marketing clearly understand the importance of using this information to personalize communications with customers and perhaps even to customize products and offerings for them. The challenge is how to glean all the valuable information from shoppers without their feeling stalked or needlessly bothered.
The clinical term for the practice that causes people to withdraw is psychological reactance. This reaction, or the fear of it, could help explain why some companies will not actively engage in interactive or conversational marketing.
Conversational marketing is the ability to take what the customer says, remember that information, and then give it back to the customer in a way that the customer finds meaningful and is likely to respond to. As a technique, conversational marketing is a proxy for an actual discussion about what customers want and what you are able to offer to meet their needs.
Conversational marketing benefits both you and the customer by facilitating personalization. To be able to offer personalized service, you must know just enough about your customers to make friendly suggestions about what else they may like to buy without crossing the line where an interaction gets so personal that it makes shoppers uncomfortable.
Personalization most often occurs in the communications channels. Customization is an added twist, as it is a product-based activity. Customization also requires a database of customer information, usually collected directly from the customer during the sales process. The process of customization requires taking the information at hand and creating an entirely new product for the customer. Brooks Brothers does it with suits and shirts. American Girl does it with dolls. Lands’ End does it with jeans, by asking for, remembering, and building a customized suggestion from customer data.
Starting the conversation
Before you can even consider establishing healthy and productive personal communications with customers, however, you must address several issues. A customer analysis is the first step before building a personalization and customization program. You need to determine if the customer base can be segmented in such a way as to make personalization and customization viable strategies for your company. One-to-one personalization may not be cost-effective for you, and you may end up choosing to use traditional targeting and segmentation techniques to create personalized communications and offers for groups of customers rather than for individual customers.
Adequate customer data is the second requirement. Conversational marketing requires a customer database and the ability to access customer information across sales channels in order to get a complete view of the potential buyer before executing marketing programs. Without such data, you cannot analyze and segment your customers by RFM (recency/frequency/monetary value) or other characteristics.
In their 2003 study of 209 firms, Debra Zahay of Northern Illinois University and Abbie Griffin of the University of Illinois at Urbana-Champaign found that customization requires sales-oriented and specific customer information, and personalization requires specific marketing information, such as response to particular marketing offers, and the ability to share information throughout the firm.
In some cases, a little imagination and hustle can make up for the lack of adequate customer data. In many other cases, the problem is old-fashioned data segregation. Data obtained from different channels get stored in different “silos” or databases that cannot be integrated. That problem can also be remedied, however. For example, it is now possible for enterprise software systems to use a common set of data across channels within a single data schema. This type of technology is used to share data across other systems and replicate it throughout the company when changes are made in one place and makes it possible to acknowledge customer information regardless of the interaction mechanism.
Shared data collection and integration, by the way, are integral to excellent customer service as well as to personalization. Say a customer buys a shirt online, tries it on once it’s delivered, and finds that it doesn’t fit right. Instead of boxing it back up for a return, the shopper brings it to the local mall for an exchange. That particular store may not have an exact replacement, but the clerk is quickly able to tell the customer that the item is sitting at another store and proceeds to have the item shipped directly to the customer’s home.
Conversational marketing and personalization, when implemented correctly, make the shopper feel special. People like being taken care of in this manner. It makes them feel special. Once you provide personalized service, people will start having conversations about you.
Conversational marketing creates possibilities for upselling and cross-selling, maximized revenue and profit, and loyal customers. That’s why all aspects of the organization must be involved in personalization and customization as viable business strategy choices. Top management must be involved and give support to the organization to accomplish these tasks.
Brian Carpizo is the CEO of Junction Solutions, a provider of software for multichannel commerce.