Originally posted on SAS Voices.
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These days, we can interact with businesses anytime or anywhere. Technology gives you convenience and choice—on how and when to do business. We can do our banking, shopping, and travel planning through our computers and mobile devices when it suits us.
At the same time, technology provides businesses with more information about us. Through our purchase transactions, online visits, and other interactions, businesses capture data about who we are, what we like, how we shop, and how we behave. We leave a trail of information behind us. And businesses can use this information to target their products and services to us in many ways: online, through the mail, through our mobile devices, social media, and more.
A recent study among 1,260 U.S. adults revealed that consumers really want businesses to understand them, despite privacy concerns. Consumers have seen improvement in the personalization of marketing messages over the past five years, and many have seen a reduction in the number of irrelevant offers they receive. These consumers like to be treated as individuals and recognized when they contact businesses. They want information tailored to their needs and preferences through their preferred methods of communication, and they want a consistent experience during interactions.
Of particular note, they want recommendations for products and services based on their lifestyle, previous purchases, and search history. Online retailers, according to the survey, fill this bill the best.
Despite privacy concerns, consumers expect businesses to understand them
The vast amount of information consumers entrust to businesses is a double-edged sword. Data privacy concerns are increasing. In fact, the survey showed that seven in ten (71 percent) say that recent events in the news have increased their concerns over access to personal information.
Yet consumers expect to be understood as individuals. Six in ten (60 percent) survey respondents say they expect companies they do business with to understand them and know their needs and preferences. In order for this personalization to occur, businesses must have the right information.
Consumers are taking note of personalization
It’s no secret to companies that targeting and personalizing messages reap higher response rates and conversions to sales while increasing efficiency. But are consumers really noticing improvements? The survey results indicate that they are. Nearly six in ten (59 percent) consumers have seen improvements in the personalization of marketing messages over the past five years. Additionally, nearly four in ten (38 percent) have noticed a reduction in the irrelevant offers and promotions they receive.
Online-only retailers lead in customer understanding
To assess general public opinion, the survey asked respondents to evaluate nine consumer-focused industries on how well these industries understand their customers. Online-only retailers are rated the highest by the general public in the area of understanding their customers, receiving an average rating of 3.8 out of 5 stars among the survey respondents. Grocery stores and entertainment providers such as NetFlix, iTunes, and Redbox were rated second (3.6 stars).
Local retailers (3.5 stars) were rated ahead of big box retailers (3.4 stars) and mobile phone service providers (3.3 stars). Two travel industries, airlines (3.3 stars) and lodging (3.0), were rated the lowest in understanding their customer among the industries on the survey.
Among their own customers, banks and credit unions win out over mobile phone service providers and national retailers
When it comes to their own customers (versus the general public) banks and credit unions outperform mobile phone service providers and national retailers (the three industries compared in the survey). Two out of three (65 percent) bank customers surveyed said their bank understands them, compared to 57 percent of national retailer customers and only 51 percent of mobile phone providers.
Banks outperform national retailers and mobile service providers in knowing the appropriate information during customer interactions and making it easy to do business through all channels. In addition, men are more likely than women to say that their bank understands them (69 percent vs. 62 percent). Respondents with incomes over $100,000 give their banks higher marks than other customers on their personalization activities such as only sending them relevant offers and making recommendations based on their history.
Businesses need to listen, ask questions
When asked what businesses need to do to better understand them, customers indicated that they want to be treated like individuals. These final quotes from the survey offer sound advice for businesses to consider:
- “Get to know me, as an individual.”
- “Tailor communications to my needs, not everyone’s needs.”
- “Listen to my needs and requests.”
- “Keep track of my purchases and how often that I purchase the same things. Keep track of what my interests are.”
- “Ask questions. Don’t assume.”
Did you know you can use analytics to do each of the things consumers are requesting above? Learn how in the white paper, “Leveraging Analytics to Improve the Customer Experience.“
SAS Institute, Inc. is the NAFCU Services Preferred Partner for Business Intelligence, Predictive Analytics Software & Risk Assessment. More educational resources and contact information are available at http://www.nafcu.org/SAS/.
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