Measuring and improving the personalized customer experience

When businesses begin prioritizing personalized customer experiences, that one decision can lead to incredible benefits for both the customer and the company. 

Personalization means that customers enjoy messaging, promotions, product recommendations, and rewards that are relevant to them and where they are in the customer journey. And because this relevance increases the likelihood that customers will buy more, businesses enjoy greater revenues and profits from their existing buyers. It’s truly a win-win!

But if your business is new to the personalization game, you’ll probably not be hitting home runs right out of the gate. Success in customer personalization usually takes a little bit of time and fine-tuning — just like it does when you implement any new marketing strategy.

If your goal is to improve your business’s personalization efforts, you first need to have a baseline understanding of where you are, and a plan in place to track this performance over time.

Below, we take a closer look at which metrics you should keep an eye on as you embark on the personalization journey. We also offer tips you can use to improve customer experience over time. 

What customer experience metrics should marketers pay attention to?

When it comes to measuring the effectiveness of your personalized customer experience efforts, it pays to make sure you’re paying attention to the right key performance indicators (KPIs) and other metrics. Some of the most important you should be measuring include:

Customer Lifetime Value (CLV)

Customer lifetime value measures how much revenue can be attributed to each customer over their entire lifetime as a customer. Customers with higher CLVs are those who have spent more with your business — and who, it can be assumed, are most satisfied with their interactions with your brand. 

Customer Retention

Customer retention rates measure what percentage of your existing customers stick around over time, continuing to make purchases or renew their subscriptions. This metric indirectly gives your business insight into how loyal and satisfied your customers are with your brand. Retention rates can be measured for a variety of terms — most often year over year (YoY) and quarter over quarter (QoQ).

Customer Churn Rate 

Customer churn rate measures how many of your existing customers make a purchase from your business but then never make another purchase. It can also measure how many existing users (in the case of subscription businesses) stop using your product or service or allow their subscription to lapse. The lower your churn rate, the better your business is at retaining customers. This metric can be thought of as the flipside of retention rates.

Customer Effort Score (CES) 

Customer effort scores measure how much effort your customers need to exert in order to interact with your company — whether that’s to make a purchase, contact support, or just navigate your website or app. The lower your CES score, the more effort customers need to expend. High effort indicates high friction, which could lead to dropoffs before a customer converts or makes a purchase. 

Customer Satisfaction Score (CSAT) 

A customer’s satisfaction score is exactly what it sounds like: a measure of how satisfied they are — either with a purchase, experience, or other interaction they had with your business. Typically measured on a scale of 1 (very dissatisfied) to 5 (very satisfied), the higher your average CSAT, the better.

Net Promoter Score (NPS)

Your Net Promoter Score is meant to measure how likely a customer is to recommend your brand, product, or service to others. The higher your NPS, the more likely someone is to refer you. If a customer is likely to refer you to friends and family, it’s generally safe to assume that they’re happy with your brand. 

How to optimize and improve your personalized customer experience

1. Regularly return to your metrics

As you begin rolling out a personalized customer experience, keep an eye on changes to each of these metrics. Generally speaking, you want to see them trending up over time — demonstrating that your personalization efforts are hitting the mark. 

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Any time you make a major change to your personalization strategy, be sure to benchmark the metrics before the change is implemented and regularly return to them to see how the rollout may have affected things for the better (or worse).

2. Solicit direct feedback

Certain metrics discussed above — like your net promoter score, customer effort score, and customer satisfaction — can only be accurately measured via direct feedback. With this in mind, it’s important to regularly solicit this feedback from your customers and users.

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Surveys and polls can be a great way of measuring these metrics and can also help you collect other valuable zero-party data that you can use to make your personalization efforts even more effective. 

3. Consider offline interactions as well

When it comes to customer experience, online interactions tend to get most of the attention because they are often easier to track. But offline interactions offer a wealth of data about how your personalization efforts are going. 

Whenever possible, be sure to consider these offline data points:

• In-store sales
• Store traffic
• In-store customer surveys
• Physical coupon redemption
• Loyalty program enrollment rates

4. Master A/B testing

The best personalized marketing campaigns start with a hypothesis. If we do this then our customers will do that:

• If we tailor the language of this email to a specific audience, they’ll be more likely to convert
• If we adjust the design of this graphic, it’ll be more effective at catching the eye of our target audience
• If we streamline our landing page in this way, it’ll increase conversions 
• If we make this adjustment to our product recommendations, it’ll be easier to cross-sell and up-sell 

The list goes on.

But just because you have a hypothesis doesn’t mean it’ll be correct. A/B testing allows you to actually test the effectiveness of your hypothesis in a small population of customers or users before rolling it out on a larger scale. Mastering A/B testing makes it more likely that you’ll improve your customer experience incrementally. 

5. Consolidate your customer data

Serving your customers a personalized experience requires you to have a clear understanding of who they are — which can be difficult, especially if all of your customer data is living in different systems and databases throughout your company. Consolidating this data in one central place allows you to build truly robust customer profiles, which will only improve your customer experience. 

To this end, we recommend pairing the power of a cloud data platform with a customer data platform (CDP).

A cloud data platform like Snowflake looks at each individual system that currently holds customer data — such as your CRM, point of sale (POS) system, website management system (WMS), accounting tools, and more — and pulls all of that data to one central location. There, the data is cleaned, organized, and consolidated. 

Then, a CDP, like the Simon CDP, can take that consolidated customer data and turn it into a usable form to power your personalization campaigns. This can include everything from customer profiles to audiences and segments and everything in between.  

Let the Simon Data CDP power your personalization efforts

Deciding to implement personalized campaigns is a great first step, but it’s just the first you should be taking. It’s also crucial to have a plan in place to measure your efforts — and to invest in the tools and technology you need for success. 

Interested in learning more about how the Simon CDP can help you deploy effective personalization campaigns that improve your overall customer experience? Request a demo today.