The empathy advantage: Using customer data to personalize marketing
Meal subscription services, skincare, flavored water, boxed water, the Twilight franchise resurgence, beige everything, and Stanley cups — what are the similarities between all of these trends?
Influencers — they are driving sales left and right. Why? According to Forbes, “People like to buy products from people who they like and trust.“
It’s simple: consumers have a relationship with the people they’re watching online. For customers, they’re authentic and relatable, they’re storytelling and they’re building a sense of community.
Combined with an algorithm that makes sure viewers see content that is targeted right at them based on multiple data points (more on that soon), it’s a magic recipe composed of empathy and intentional, data-based personalization.
Empathy is imperative in marketing
What exactly is customer empathy and why does it matter? Trust is important in relationship forming. Human psychology tells us that people want to feel intentionally connected.
Dopamine is the name of the game. It’s a lot easier to click and buy (and return) without a second thought if you trust who you’re buying for and it feels customized to your needs and desires.
“Understanding is at the heart of empathy. It's the ability to put oneself in another person's shoes, to comprehend another person's ideas and feelings. But empathy isn't only about feelings. It all comes down to action. No two people will have identical experiences, sensations, or sentiments, but the goal is to get as near as possible by putting our prejudices aside and attempting to realize how others think and what their needs and desires are.” — Forbes
Beyond a positive (and in many ways, ethical) way to operate, there is a real return on investment (ROI) that comes from leading with empathy, which includes earning new customers, retaining and upselling existing customers, and preventing churn.
Consider this customer research:
- 68% of customers expect brands to demonstrate empathy, but only 37% of customers say brands generally demonstrate empathy
- 68% of customers will spend more money with a brand that understands them and treats them like an individual
- 66% of customers expect companies to understand their unique needs and expectations, but only 34% of companies generally treat customers as unique individuals
Leading with empathy increases ROI, decreases customer churn, and increases brand loyalty by enabling you to:
- Understand customer needs to address customer needs better and provide tailored solutions
- Personalize customer experiences in a way that makes customers feel valued and understood
- Communicate effectively to build trust between customers and your company. Transparent and honest communication during any issues or challenges can reassure customers and strengthen their connection with the brand
- Resolve problems quickly and effectively by turning a potentially negative experience into a positive one, ultimately fostering customer loyalty
- Adapt quickly to change so you can stay attuned to changing customer preferences and market trends, and remain relevant
Ultimately, it’s nice to be thought of, but it’s even nicer to be seen. People are struggling with inflation, housing, jobs, and grocery costs – they don’t want to be cold-called. They want a relationship. They want someone to see them, not just place them in a crowd of post-Covid era travelers.
How can you do this without knowing your customer personally? Through data — but not just one point of data here and there. You need a whole view and it’s not without its challenges. Here’s where a Customer Data Platform (CDP) can help.
Your customer data: The empathy engine
What does it mean to be in a data-driven world? It means that data infuses our work, personal, and home lives — essentially, everything.
Say you choose to order iced coffee instead of hot coffee.
Why? Is it based on an experience? Your mood? The weather? The barista? The customer in front of you who ordered it? These data points helped you decide without you even thinking about it.
The same can be applied to customer marketing. For example, a popular pet service can send flowers when they track that their customer’s beloved pet has passed. In the case of customer marketing, this shows customer empathy.
But when a company sends a romantic Valentine’s Day message to someone who’s been traveling solo for years and has a household of one…. well, that message might have missed the mark. Sometimes an attempt to empathize ends up in an unsubscribe, simply because you don’t have the entire picture.
So how do you even begin to get this holistic view of a customer you don’t know personally, but wants you to behave like you do?
Customer Data Platforms serve as the empathy engine for modern businesses. They go beyond mere data collection, unifying information from various sources to create this holistic view of individual customers, and this is what Simon Data does best.
“Simon Data has been an incredible partner in helping The Farmer’s Dog deliver on our promise of simplifying pet care and nutrition. The platform and the team have been instrumental in powering our ability to deliver personalized, relevant information that communicates the value of our products, inspires people to try them, and most importantly, improves the lives of our customers and their canine loved ones.” - Adrian Evans, Director of Retention & Lifecycle at The Farmer's Dog
Having a holistic view of data also goes hand-in-hand with the increasing importance customers place on data privacy. First-party data collection, a hallmark of CDPs, not only complies with privacy concerns but also enhances customer trust.
It's the foundation for creating rich customer profiles that extend beyond basic demographics. CDPs enable businesses to delve into website behavior, purchase history, social media interactions, and more.
By doing so, they create a nuanced understanding of customers, uncovering not just what they buy but why they buy.
Remember: 76% of consumers want the companies they’ve done business with to remember who they are, and their history with the company.
The beauty lies in the granularity of these customer profiles. CDPs don't just stop at transactional data; they incorporate inferred preferences and emotional triggers and can even predict potential lifetime value.
They help marketers take a deep dive into the psyche of their customers, turning data into actionable insights. Key performance indicators (KPIs) like customer lifetime value, retention rates, and brand advocacy can be tracked to assess the ROI of empathy-driven initiatives.
Putting empathy into action: CDP-powered strategies
CDPs enable personalized marketing messages, offers, and recommendations based on individual customer preferences and emotions.
With a CDP, you can incorporate multiple data points to authentically empathize with your customer, get to know them, and consider their needs and circumstances dynamically.
Let’s say you want to determine how best to communicate with customers likely to churn (so you don’t overtext them or miss them via email since you’re already at risk of losing them). No one likes to find out they missed a promo the day after a purchase or get message after message in a channel they don’t prefer.
You can experiment with different communication channels, content, etc., to find what meets your customers’ wants day to day, not just with a top-level picture, and meet them right where they are.
For example, you can use our Simon Predict Churn Prediction model to first segment a Journey to users who are likely to churn. You can first send an email that includes personalized product recommendations from the Simon Predict Product Recommendation model, then experiment with sending an email vs. SMS to see if you get any bites.
Then, you can leverage that result data in the future to be sure you’re communicating with customers within their preferences (and not over-communicating in other channels) without ever having to send one survey asking if they prefer email or text.
Take it a step further and be sure you’re only sending messages at a reasonable time in their timezone, consider any special days coming up, planned travel, etc. Consciously or subconsciously this empathy ensures your customer has a more personalized experience with you.
Simon provides:
- One-to-one personalization across all touchpoints
- The ability to orchestrate unique customer experiences with advanced segmentation, out-of-the-box predictive models, and other data enrichment tools.
As a bonus, you can even use our AI-powered Jinja generator to help you build no-code content that scripts all these data points in seconds for you.
“With Simon Data, we unlocked the ability to unify all of our customer data and cohesively orchestrate customer experience across our marketing channels. This allowed us to increase our sales by improving how we interact with our customers and enhancing our understanding of their needs.” — Ash Fisher, Head of Technology at ASOS
Conclusion
Understanding customer needs, personalizing experiences, and effective communication foster trust and enhance brand loyalty. This empathetic approach is pivotal in navigating the complexities of a data-driven world – and the research shows your customers are asking for it!
It’s time to shift from mere transactions to authentic relationships. By creating holistic customer profiles and orchestrating personalized strategies, Simon’s CDP not only helps you meet evolving expectations but also measurably impacts ROI.
Are there risks from leading with empathy? Sure, but the better question is what are the risks if you don’t?
You may make a poor assumption or miss the mark here and there, but you can intentionally make positive choices by using well-rounded, data-driven campaigns and experiments to empathize more.
And what’s more, you can use empathy to not only earn new customers, but you can win them back too with your authenticity and willingness to get to know them as the unique person they are.
