This story was created by Fast Company for Grant Thornton as a part of a content series that explores the impact of innovation and technology.
Companies today have massive amounts of data — about their customers, their prospects, and the types of products and services that sell well and those that don’t. And in recent years, they’ve been able to access powerful tools that let them analyze that data efficiently, producing meaningful insights that drive innovation. However, not everyone is putting these tools to work.
As a result, there’s substantial opportunity ahead for companies that use data-driven insights to deliver personalization and immersive experiences, said Kevin Pleiter
, principal in Advisory Services and leader of Financial Services Innovation
at Grant Thornton. Those efforts should be focused on what he calls “the customer of one.”
Pleiter and other industry professionals shared their thoughts on what companies can do to stay ahead of the pack. Here are their five recommendations for driving growth and boosting customer loyalty.
1. Embrace individuality
Dozens of businesses vie for the attention of each consumer. Those that stand out are the ones that make consumers feel uniquely known and understood. “The notion of the ‘customer of one’ means that you’re not just a segment, you’re not put into a generic box that says, ‘You are married, you live in a middle-class suburb, you have 2.6 children and 1.2 pets,’” Pleiter said. “The customer of one treats each client as a unique individual who is recognized for his or her unique characteristics and desires, unique location, unique job, and the fact that you have two children, not 2.6; and you have 1 dog and not 1.2 pets.”
That opportunity is particularly salient within financial services, though it exists across industries as companies aim to capture consumers’ loyalties. “The winners,” said Grant Thornton’s National Managing Principal of Innovation Kevin Baril, “will be the companies that give people exactly what they need. But first you have to understand exactly what that is and then deliver on it. To the extent you can do that, you’re going to be able to have a better form, fit and function with your customer’s or client’s needs.”
2. Free your data
Companies can leverage artificial intelligence and machine learning to deploy personalized communications to customers at relatively low cost. These tools, of course, run on data — scads of it. And while many firms already own this data, it’s often stuck in various silos across the organization. Pleiter advised: “You need to free up the data in order to deliver on the value it can potentially provide in order to deliver the hyper-personalization that the ‘customer of one’ promises. That job may sound boring, but the companies that have cracked that nut are really propelling themselves forward.”
But cracking that nut can be tough, given the complex ways in which innovators need to combine and analyze data to deliver meaningful information, products and services. Harikesh Nair, the Jonathan B. Lovelace professor of marketing at the Stanford Graduate School of Business, explained: “Data is simply a resource. To be successful, it must go into an algorithm that has to be trained on the data, and then it has to create an intervention with the consumer in real time — all of which requires complicated infrastructure.”
3. Use personalization wisely
Companies are already deploying personalization with intriguing methods, and the winners are doing so in ways that make sense for both consumers and corporations. Pleiter cites the example of Yulife
, a start-up that offers life insurance coverage to British businesses. The company has gamified life insurance and made it personal. Members can use the Yulife app to track their steps and their use of meditation apps. The more you walk and/or meditate, the more you accrue points that you can exchange for gym memberships, air miles and gift cards from the likes of Amazon and Nike. “This approach really creates a sense of engagement — and as a ‘customer of one,’ it makes you feel special,” Pleiter said. “Two members can act in two different ways as they go about their day, but they’re both getting healthier and being rewarded the same, and Yulife benefits by having lower risk. It’s a win-win.”
4. Keep an eye on risk
Along with the power of personalization comes substantial responsibility; when a consumer’s relationship with a brand feels personal, a misstep in that relationship may take on outsize importance. Ultimately, Baril said, “The risks of getting it wrong are greater.”
For instance, Nair noted that personalized communications can quickly cross the line from compelling to creepy. Likewise, the algorithms that drive personalization are based on an experimentation model, meaning that they need to try out tactics on consumers in order to determine what works and what doesn’t. “That experimentation is fraught,” Nair said. “Personalization by necessity involves showing you some bad content in order to determine what you think is good content.”
What’s more, companies must be diligent about safeguarding the customer data that makes personalization possible. The more data they retain, the greater the financial and reputational risk of a breach.
5. Rely on the expertise of qualified partners
As companies across industries begin delivering more personalization, they’re unlikely to all have the in-house expertise necessary to navigate the complex data analysis that’s required — especially when delivering personalization at scale. Third-party partners can provide both capacity and expertise, helping innovative firms deliver experiences customers will value, while minimizing those that feel intrusive or unwelcome. Baril said: “The customer-of-one paradigm really speaks to the importance of good, quality data coupled with digitally enabled touch points to engage with clients and realize the outcomes the data is projecting. That likely involves third-party relationships that provide you with insight and information. In the past, those relationships may have been tangential, but now they’re likely core to understanding who your buyers are, in a better way.”
This FastCo Works article was created for and commissioned by Grant Thornton.
Principal, Advisory Services
Leader, Financial Services Innovation
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