The bar has been fundamentally raised on consumers’ expectations in this digital century. Retail today is different because consumers behave differently than in the past. They expect relevancy and are empowered with both access to information and platforms to praise or complain. As a result, retail marketers are moving away from broad demographic push-messaging and evolving to build true 1:1 customer relationships through personalized digital experiences. One of the foundations to achieve that goal is Customer Identity Management.
What Is Customer Identity Management and Why Is It So Critical?
Personalization and loyalty requires identity. Only by being able to view the customer as an individual, through some unique identifier, is it possible to personalize a customer’s experience. Yet, in today’s omnichannel world, it is necessary to consolidate fragmented data from the front of the customer journey to gain a more holistic view of the customer. A unified customer identity is necessary to deliver consistent and coordinated experiences that are appropriate across physical store, online and store channels. Customer Identity Management can help retailers know:
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Who their customers are;
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What they need;
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When they need it;
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How to execute across channels, touch points and devices; and
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How to deliver an experience, and offer, that is both fun and engaging.
Those organizations that know their customers — and know them well, through effective Customer Identity Management — will be big winners. They will deliver relevant promotions and content to their customers at the right time and place because they know who their customers are, what they want, and when they want it. Those companies that rely on limited customer data and a fragmented customer identity will be lucky to survive.
Do You Know Me? Case In Point
A customer navigates through a major retailer’s web site. As they view men’s lightweight suits, they receive an email blast from the same retailer, prompting a 20% discount on swimwear — the third one this week. This seemingly irrelevant promotional offer, delivered at an inopportune time, brings to light the reality that retailers are often unaware of the many personal facets about their customer — even though the customer has visited the retailer’s web site and their stores for years. All too frequently consumers are delivered an irrelevant promotional offer, at the wrong time and place, because the retailer does not know who the buyer is, what they want and when they want it.
In the recent past, retailers would have no way of identifying such personal preferences. However, new technology, including social media platforms, have enabled retailers to devise personalized customer profiles, lending deeper insight into their customers’ likes, dislikes and overall lifestyle.
For example, through technology, a retailer that is promoting lightweight suits may be able to ascertain that a potential customer is a road warrior and is a great candidate for a suit as they make their quarterly journey to India. This piece of personalized information is extremely advantageous and enables the retailer to accurately and effectively market to this customer.
Retailers must take advantage of these new opportunities to meet their customers as individuals. They can then grow that relationship and create experiences that provide value for the customer online, through mobile devices, and in their physical stores. When treating the customer as an individual and building trust, customers are increasingly willing to share information, which moves the relationship, average order value and loyalty even further.
Social Login Is The Door
Sites like Facebook, Twitter, Google+, and LinkedIn have created an opportunity to vastly expand a retailer’s relationships with individual consumers. Many customers are willing to sign into a retailer’s site using social media login credentials. How should marketers think about this?
Let’s take e-Commerce as an example, where efforts at personalization have been based primarily on browsing and purchase transaction history. Those histories might suggest a shopper to be a young, adult male. The retailer might then pay for additional third-party data to know more about his demographic preferences, as well as other sites he has visited or products he has viewed. Then, the retailer might show him suits that appear to be most relevant to his style.
Efforts at personalization, like the example above, often act on probability, or “best guesses.” Yet, advertising executives often state that gender is wrong 30% to 35% of the time. Likewise, a female Forbes writer recently explained how Google classified her as an old male. The outcome is a poor brand experience and lost sales. Fortunately, social login creates an opportunity to start a much deeper and personalized relationship with an individual customer.
Getting Permission And Balancing The “Creepy Factor”
When customers identify themselves through social media, they give retailers access to an immense body of information that an individual customer has shared online. Inevitably, in this regard, the “creepy factor” is always a topic of discussion in any conversation about personalization. It is crucial for retailers to bear in mind that consumers will take a more active approach to the sharing of their personal data if there is value and a sense of trust. If the customer sees value, she will be happy to share information and connect on a deeper level. However, it is critical for the retailer to seek permission first.
That information should be combined with other information the retailer has already gathered — for example, if the customer has signed up for a rewards card or has ordered through the retailer’s catalog. Simple information like the customer’s birthday, interests and likes allows retailers to craft messages to appeal to them personally. The customer’s location can also provide an opportunity for retailers to invite customers to experiences such as in-store events.
Overcoming Today’s Omnichannel Fragmented Experience
As channels and touchpoints continue to multiply, retailers are expected to follow each consumer, with an appropriate engagement strategy. Best practice companies identify customers and preserve interactions across touch points, channels and devices to deliver on an orchestrated customer experience and realize personalization potential. The next generation of omnichannel will be less about internally-focused operational integration and more about personalized, customer-focused retailing.
Connect, Collect, And Convert For Short- And Long-Term Gains
Return on investment (ROI) for Customer Identity Management comes in the form of both short- and long-term benefits. Longer term, traditional marketing campaigns consisting of one-way push-messaging will largely disappear. Marketing will be based on relationships because retailers will understand who their customers are and what they care about. Today’s marketing structure and engagement technology is campaign-oriented though, which will not immediately change. In the short-term, Customer Identity Management can help impact established metrics like open rates, clicks, new registrants, downloads, leads and (un)subscription rates.
Retailers must relentlessly pursue the personalization of brands, products, services and experiences for each and every one of their customers. Personalization is a big deal, and may be the biggest competitive imperative for this century. Without Customer Identity Management, personalization programs may not succeed.
Paul Gulbin is a Managing Director with CohnReznick Advisory Group. He leads the Firm’s digital services platform as part of the Digital and Innovation Services group. Gulbin is focused on advising companies on ways to become more agile, innovative, social, mobile, and customer- and employee-focused by making digital a core part of how they conduct business. He specializes in digital and customer strategy, digital marketing, channel and content management, experience design, digital customer profile, permissions management, analytics, big data and complex/global programs. To learn more, please contact Paul Gulbin at Paul.Gulbin@cohnreznick.com, or visit CohnReznick’s Technology and Digital Advisory webpage.
