Today, the vision of companies is becoming increasingly customer-centric.
At the beginning of the year in looking ahead to the trends for 2021, we focused on the role of humans as consumers, and the need to place their needs at the center of business strategies. And that’s not all. We also said that 2020 was the year of digital awareness, both on the part of companies and consumers. And as we know, digital and data are an inseparable pair.
This brings us to the question: how can we use data to gain a competitive advantage and respond promptly to the needs of the contemporary consumer? That’s what we’ll address in this post, looking at the importance of data management for establishing a strong and lasting relationship with customers and for creating personalized communications and customer experiences.
Data is the new oil: can GDPR and marketing coexist?
To understand how to build personalized experiences through customer data, it is essential to know how to collect and manage it correctly, according to current regulations.
In this regard, let’s look at the now well-known GDPR. On May 24, 2016, the EU Regulation 2016/679 for the protection and free movement of personal data came into force. The regulation establishes rules regarding the protection of natural persons, the processing of personal data, and the free movement of data.
Having reached this point, the question we need to ask ourselves is: can GDPR and data-driven marketing coexist? The answer is yes! GDPR does not prohibit the use of personal data for marketing purposes, but regulates its processing through consent.
What this means is that personalized communications will require consent. To send personalized communications to improve the customer experience and customer relationship through data, it is mandatory that companies request the consent of the parties concerned. This consent must specifically relate to the purposes of direct marketing or profiling for direct marketing.
To lawfully collect and manage data, therefore, you must provide customers with clear and intelligible information that identifies the purposes of data processing and the period and methods of storage. We must also remember that customers can revoke their consent to processing at any time. In this case, deleting the data is mandatory.
To ensure that the GDPR requirements are met, the European Union has introduced a new role, which is mandatory in many cases, the Data Protection Officer.
The DPO, who can be internal or external to the organization of the data controller, has the task of informing and advising the controller, overseeing and ensuring the adoption of the necessary GDPR and data protection policies and collaborating with the supervisory authority, and providing access to documents and information necessary to conduct investigations. (source osservatori.net digital innovation)
In the event that personal data has been handled in an illegal way, GDPR provides for criminal and administrative penalties, and the DPA must take factors such as the nature, severity, and duration of the breach into account. (source ec.europa.eu)
After this brief overview of the rules that regulate the protection of personal data, we’ll now focus on the next phase of data communications: how to collect data, the strategies and tools for making personalized communications, and the possible contexts for where it can be applied.
The most effective strategies for data collection
In a previous post, we analyzed the role of customer communication in improving the customer experience. Communication, in fact, is the basis on which lasting relationships are built between the company and customers and it also affects the degree of customer satisfaction. We must also consider that today’s communication is based primarily on content that entertains and informs people and on automation tools that optimize processes and allow messages to be tailored to the recipient.
As we’ve already anticipated, personalization comes through data. Here are just some of the strategies that you can employ to collect valuable data for personalization:
- Collect contacts at physical events (e.g., attending trade shows) and send follow-up communications afterwards;
- Run lead generation campaigns on social media, offering content (e.g. ebooks, reports, infographics) that encourage users to leave relevant data (such as company email address and job title) for marketing initiatives to implement at a later date;
- Promote newsletter subscriptions through a form on the company website;
- Use organic posts on social networks that offer downloadable content or promote registration to company webinars or other digital events.
And that’s where inbound marketing comes in.
Inbound marketing: the road to personalization
Inbound marketing not only allows you to attract new potential customers, it allows you to accompany them in the various stages of the funnel by offering them valuable marketing content. Inbound marketing and content marketing are now faithful allies in all activities that involve people, both in the lead generation phase through the offer of downloadable content and in lead nurturing.
We must emphasize that lead nurturing activities make it possible to convey increasingly specific and personalized communications and content as you acquire more data on your contacts. The combination of inbound marketing and personalization is therefore an opportunity to make people feel unique, informing them and increasing their engagement, satisfaction, and loyalty.
Personalized communications, also in customer service
There are many fields where personalized customer communications can be applied. Customer service activities, for example, have a strong influence on the overall customer experience and customer loyalty. In fact, according to Microsoft Research, for 90% of people, the quality of customer service is a determining factor in the decision to purchase a company’s services or products.
For this very reason, it is also important to focus on personalized communications in customer support activities. Today’s companies must learn to understand and anticipate the needs of the contemporary consumer, who expects a 24-hour assistance service that is fast, and above all, personalized.
This type of service can be offered through data. An example is the virtual assistant, who not only has the ability to interpret the context of the communication with the user, but can also analyze the customer’s state of mind and respond more effectively to his requests. This is all possible thanks to data analysis.
Alongside virtual assistants, we can identify another tool that can support, and certainly innovate, customer service and post-sales communications through data: personalized and interactive video. With the data collected, the personalized video adapts to the characteristics of the individual customer and makes it possible to inform, involve, and establish a clear, interactive, and one-to-one dialog.
Just think of how much more effective your after-sales communications would be if the customer received a personalized video instead of a simple email. The same goes for personalized micro-sites, which are created based on the characteristics of the individual user. Through a personalized micro-site, for example, the user can manage their subscriptions or services, request assistance, and analyze their consumption rates ( in the case of households), without having to resort to other means of communication.
All of this can happen always and only thanks to data collection.
CRM: the beating heart of personalized communications
Having seen some data collection strategies and the possible contexts where personalized communications can be made, we now need to talk about what makes such communications possible: customer relationship management software.
CRM software are useful tools for customer relationship management because they store all the information and data, which is collected through various touchpoints, of customers and prospects. They make it possible for various business departments to use the data for different purposes, such as:
- Understanding and anticipating customer needs;
- Creating personalized communications;
- Sending personalized offers and business proposals.
Not only that, CRM systems make it possible to improve the quality of customer service (and therefore of the overall customer experience), thanks to the collection of data and information regarding:
- the propensity of a customer to recommend certain products or services of a brand (Net Promoter Score);
- the frequency with which customers abandon a brand;
- the time spent solving customer problems.
As far as personalization is concerned, we can say that CRMs have become indispensable for companies that want to improve the customer experience and the relationship with customers by following a data-driven strategy. The objective of today’s companies, in fact, is to be able to manage and enhance data, transforming traditional communications into real experiences for the customer who receives them.
As we have already mentioned, the desire to create personalized experiences and communications stems from the new needs and habits of customers. According to a recent survey by Salesforce in the insurance industry, about 60% of Italians need to be able to take advantage of greater personalization of insurance products. And that’s not all: 33% want to receive clearer communications and contract terms, and 50% are willing to share data in order to take advantage of personalized, innovative, and value-added services.
These results confirm the importance of data analysis to increase customer satisfaction, and not only in the insurance sector.
To conclude, we can say that personalization today means listening to people and establishing strong and satisfying relationships with them. For this reason, it is important to learn how to properly manage data according to the regulations in force, to put the right strategies in place, and to equip ourselves with tools that allow us to take advantage of all the opportunities they offer.