Article

A personalized customer journey with data science

Rick Groenen
Marketeer
November 20, 2019

A lot of businesses that compete in the digital world are trying to gain a competitive edge by using price differentiation. But does this really make your brand break through the clutter of online communications? And does this establish a meaningful relationship with your customers? In our opinion, the answer is no. Most businesses are focusing too much on short-term conversion. To create digitally engaged customers and become the love brand in your market you have to develop long-term relationships with your customers.

How do you become a love brand? Become customer-centric. Use your customer data and apply this information to better serve your customers throughout the customer journey. Useful tools to achieve this are customer profiling, predictive analytics, and most of all: valuable personalized content in all phases of the customer journey.

The rise of digital connectivity

Our world keeps getting more and more digital every day. This becomes very clear when you walk through a random city, take a train or visit a restaurant. You’ll notice, the majority of people are focused on their electronic devices instead of their surroundings.

Although this doesn’t seem social on a human level, it creates a lot of opportunities for your business to interact with your customers. A few decades ago, the best we could do was using mass-communications channels such as TV, newspapers or billboard ads. Nowadays, brands can interact with their customers 24/7 on a personal level, by sending out targeted communications.

Digital engagement nowadays

Nowadays, businesses are mainly focused on price when trying to achieve digital engagement. For example, vouchers for price discounts, discounts for positive reviews, the lowest price guarantees. Although price promotions might offer interesting conversions in the short term, they will not contribute to building a meaningful and honest relationship between your brand and the consumer. Consumers don’t feel connected to a brand they buy just because it’s low-priced. By lack of engagement, switching costs are negligible. When a competitor is offering a lower price, the customer will no longer buy your brand.

Another example of a missed opportunity in the digital customer journey is personalized ads that are irrelevant because they’re often too late. How many times have you been served an ad for something you bought a few weeks ago?

We can safely say that the current implementation of digital engagement is ineffective or perhaps even misunderstood. Luckily, this also means there’s a lot of room for improvement.

Create long-term value throughout the customer journey

By creating true digital engagement your brand can become a love brand. A love brand is a brand with which you have a positive emotional fit and a real passion to use. It’s a brand you don’t want to part ways with. A brand you follow on social media and proudly tell your friends about. A brand to which you feel truly connected.

By becoming a love brand, the focus will shift from short-term conversions to long-term relationships. Keeping this in mind, brands should create true value for their customers throughout the customer journey. Customers will become loyal and keep coming back. They are even willing to pay more for your brand compared to those of competitors. Price becomes less important, simply because your customers have different reasons to buy your product or service

A personalized customer journey

We already addressed the issue of irrelevant personalized content. Although the intentions are good, this only leads to irritation amongst customers. So, how do you make sure your marketing communications are relevant on a personal level and satisfying for your customers?

Let’s illustrate this and take a look at Harry and his relationship with Booking.com. Harry enjoys a backpacking vacation about twice a year. His airline ticket is the only thing he arranges in advance. He likes his freedom and doesn’t exactly know where he’s going to be at any given point during his trip, so he books accommodations just a few days ahead.
In the classical use of personalized ads, Harry would encounter ads promoting accommodations weeks after he visited a particular area. Although Booking.com has a detailed purchase history and the knowledge that Harry won’t visit the same destination twice, this information isn’t used for their personalization of marketing communications. However, from his purchase history we can learn a lot about Harry’s holiday preferences, for example:

Preferred vacation type: backpacking destinations outside of Europe
Preferred destinations: Sri Lanka, Peru, Thailand
Preferred accommodation type: hostels
Preferred location: within 2 kilometers range from city center
Facilities: swimming pool and bar
Preferred price range: 20-60 euro a night
And much more…

Using this information, Booking.com could be of added value to Harry, even when he’s not actually going to book a vacation. All year round they can offer inspiring content of destinations on which he can base his next trip.

For example, Booking.com can inspire Harry with content about destinations that could be relevant, based on what destinations people similar to Harry have visited in the past. In the next step, analysis of the click behavior on this suggested content provides a lot of information about Harry’s current interests.

This provides a clear picture of Harry’s preferences. Now Harry’s preferences are more clear, in-depth content can be shared to further guide Harry through his decision process. During the time of the year Harry usually books his accommodations, personal recommendations can be given based on the available information about Harry.

Furthermore, it’s important to always keep interacting with your customers by proactively reacting to the behavior of your customers. For example, if Harry doesn’t react positively to specific recommendations, don’t keep pushing, but try to find the right match between content and consumer. Keep trying to figure out what works best for Harry. By doing this you will increase conversion rates and diminishing spam all year round.

Once Harry has arrived at his destination, Booking.com can further be of value to Harry by recommending accommodations for his next stop, which can be predicted based on his preferences and travel destinations of travelers similar to Harry in their database. These recommendations would keep getting better throughout his trip because backpackers often follow similar routes through a country. One example of such a route is ‘The Gringo Trail’ in Peru.

In this example, using customer profiling and predictive analysis, Booking.com could be able to offer value to Harry during his entire customer journey. By offering targeted advice, at precisely the right time. After this, Harry sees Booking.com as an essential part of his backpacking experience, as a personal travel buddy. A long-term relationship between the brand and the consumer is born.

Personalization throughout the customer journey

This proves once again that knowing your customer and putting the customer first is of the utmost importance. In the end, this is what creates true digital engagement. One of the first steps to achieve this is mapping out the customer journey, which doesn’t start or end with a purchase. When communicating, ask yourself in which phase of the customer journey someone is and what informational/emotional needs are common in this phase and adapt your content accordingly. This way, you’re guiding your customers all the way through the sales funnel and build a long-term relationship.

Create long-term relationships and loyalty

Although price differentiation can be a very effective instrument to gain short term conversions, it doesn’t build meaningful relationships in the long term. To do this, there really has to be a match between brand and customer on more than price alone. For instance, by offering relevant content based on customer journey mapping, customer profiling, and predictive analysis. This creates true value for the consumer and makes your brand indispensable in their lives. You’ll both reap the benefits from this long term relationship.

You’ll become a love brand.

All of this can be achieved by extracting and using the relevant data from your clients, applying Data Science and Machine Learning models for accurate predictions, and turn these into actions that add true value for your clients!

About the expert
Rick Groenen
Marketeer