The New Digital Dilemma: How to Elevate Customer Relationships in an Increasingly Commoditized Marketplace

Consumer-facing brands have spent hundreds of millions of dollars over the past few decades creating unique customer experiences in their physical brick-and-mortar locations. Whether it’s retail bank branches that look more like cafés, Main Street wealth management and insurance agency outposts that bring a regional aesthetic to big national brands or global apparel retailers that have made their stores feel like curated boutiques, businesses have worked hard to connect with their customers.

Now, however, with the vast majority of customer experiences occurring on websites and apps, how can brands assert their unique value propositions and stay relevant in the eyes of consumers?

The Quest for Truly Personalized Experiences

It’s a question many companies are struggling with as they make the transition to digital-first, touchless business models that have prioritized speed and efficiency over relationships and personalization. Take retail banks and credit card providers, for example. A new customer experience study from J.D. Power found that overall satisfaction with bank and credit card apps and websites has declined sharply as usage has increased over the past year. The reason: these digital touch points are missing the mark on personalization. In fact, just 53% of digital banking customers say they have a personal relationship with their bank, while that number jumps to 73% among those who visit the branch.

We’re seeing versions of the same phenomenon play out in insurance, wealth management, media and entertainment, retail and every other industry. As digital channels have matured and technology has improved, the functional aspects of mobile apps and websites have all reached a comparable level of reliability and usability. However, the unique brand experience behind many of those products and services is getting lost in a sea of homogenous clicks and swipes.


The solution, of course, is to build the same — or better — level of personalization that customers experience when visiting a Main Street brick-and-mortar business into digital channels. That’s easier said than done, but some companies are cracking the code by getting serious about data.

How to Really Know Your Customer

One standout example of this is a project my company worked on with a major U.S. credit card issuer that was struggling to convert website visitors into card applicants. Ultimately, the offers the issuer was promoting were getting lost in the din of competitive offers from other providers and so were failing to connect with target customers.

Before we could fix that, we needed to understand what was happening on the card issuer’s website, pinpointing where exactly prospects were falling off, analyzing alignment of product offers with customer profiles and spend metrics, and classifying customers into distinct groups. That meant drawing on not only detailed customer behavior data from the credit card issuer’s website, but also patterns of consumer behavior elsewhere on the internet. Once we could stratify customers based on these real-world behaviors, the card issuer was then able to deliver highly targeted messages to each group, which drove a 40% increase in the issuer’s application rate.

A similar, data-driven approach was recently deployed by The Very Group, a UK-based family of well-known retail brands with roots as a 100-year-old catalog business that has transformed into a leading digital retailer with more than 4.8 million customers across the UK and Ireland. In the span of three years, the company transformed its business from distributing 30 million catalogues to 100% digital, becoming one of the biggest pure-play online retailers in the UK.

The key to that transformation was data. One thing The Very Group had in spades, by virtue of its steady stream of web traffic, was shopping data. By distilling that data down to specific patterns of behavior — where shoppers are drawn to on a page, what they click, the site flows that lead to transactions, and the flows that lead to customers clicking away — we were able to design multivariate experiments to test different offers and personalized marketing interventions. Ultimately, by optimizing the customer experience, we were able to help the company add tens of millions in incremental sales.

Moving Beyond the One-Size-Fits-All Digital Strategy

The companies that are successfully building digital models that connect with consumers and differentiate from the competition are those that understand that one-size-fits-all is simply not an option anymore.

For a while, businesses could get away with offering websites and apps that simply performed a transactional function, but today customers expect more. If they’re feeling financially stressed and are shopping for credit or personal loan products to help them consolidate debt and take control of their finances, they need a very different set of digital touch points than someone who is looking to maximize loyalty rewards on a business credit card.

Similarly, if they are scouring the web and social media on a mission to find the perfect pair of jeans made with sustainable denim, retailers would be wise not to serve them a bunch of discount offers on inexpensive mass-market brands.  

Data is the key to unlocking that level of personalization. By analyzing patterns, continuously testing and tweaking special offers to anticipate and serve individual customer needs, businesses of every type can fight the forces of commoditization by delivering truly tailored customer experiences.

Rohit Kapoor is Vice Chairman and CEO at EXL, a multinational operations management and analytics firm.

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