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How personal is your personalization strategy?

Before COVID-19 struck, companies were investing 14 percent of their marketing budgets in delivering a personalized customer experience1. The question is: do consumers actually want one?

The unequivocal answer is that they certainly do. More than two out of three respondents in KPMG International's research identified personalization as one of their two key priorities for customer service. Consumers in the Middle East and Latin America, those on higher incomes and members of Gen X, Millennial and Gen Z were more likely to value such an experience.

One of the greatest psychological impacts of personalization on the customer comes when an organization understands their individual context, empathizes with their situation, addresses their issues, eases their problems, enhances their sense of self-worth and, by giving them individual attention, builds an emotional connection.

This entails greeting the customer, proving you know them, recognizing your shared history and surprising them with something relevant.

By its very nature, personalization shows that your organization understands the customer's specific circumstances and needs and will position a company's product or service experience accordingly. This is particularly critical at the moment because, by accelerating the move to online, COVID-19 is changing the engagement model and relationship between customers and brands.

Consumers in Asia Pacific, Latin America and the Middle East, those on higher incomes and members of Gen X, Millennial and Gen Z are especially keen on personalization.


Two out of three consumers say personalization is one of their top two priorities.

Obsess about the customer first, then the technology

Corporate investment in personalization can focus simply on systems, software and technology. That may explain why many offerings do not feel personal to the consumer receiving them. Personalization cannot be 'solved' by technology alone – it must be grounded in an understanding of the customer and their needs. This insight of the customer is developed over time by appreciating what the customer says about their needs, analyzing their behavior and listening to what they share with others. With this knowledge an organization can better understand where, how, when and why customers make decisions.

The preferences and appetite for personalization will be different across cohorts or segments. For instance, in the simplest of examples, a company could recommend and could deliver a product the individual did not realize was running out based on studying reorder history and consumption patterns. However, not all customers find the harnessing of this insight welcome. Thirty per cent of men found this 'cool' and the same percentage considered it 'creepy'. Only 27 per cent of women thought it 'cool', and 34 percent deemed it 'creepy'. Millennials were the only generation which, on balance, regarded this service as 'cool'. The implication being that companies need to know when and how to harness the insights appropriately across different cohorts and segments.


Similar thinking applies to how one analyses consumer attitudes to technology – such as web chats for example. Overall, 29 percent of those surveyed said talking to a human was 'very important' to their digital experience of an organization – rising to 46 percent in Latin America. Millennials and wealthier consumers were particularly enamoured by the chance to communicate with artificial intelligence. Again, the implication is on how best to harness new Artificial Intelligence (AI) powered capabilities with an appreciation of the customers' preferences and the underlying economics of the relationship.

of Millennials find the idea that a company knows more about them than they do themselves 'cool'.


percent of consumers find the idea that a company knows more about them than they do themselves 'creepy'.

One size does not fit all – or even most

By accelerating the use of digital technology, COVID-19 has brought new opportunities for engaging customers in the most relevant manner. As most consumers adapt to new ways of working and living, the home is becoming a space for multi-tasking and they expect the technology they use there to be more finely attuned to their needs and wants.

One can see the accelerated adoption of emerging technologies like augmented reality (AR), virtual reality (VR), experiential reality (a blend of the two, known as XR), and wearable tech. How quickly these technologies will achieve "critical" mass adoption is yet to be determined but the direction of travel is not: 15 per cent of survey respondents said voice interaction was 'very important', while 13 percent of consumers felt the same about AR and VR. Such technologies particularly appealed to wealthier consumers.

A one-size-fits-all – or even a 'one-size- fits most' – approach to personalization is not sufficient. Organizations need a nuanced strategy so they can distinguish between customers who regard their relationship with a business as purely transactional and the growing proportion of consumers who have greater expectations. Even the latter group will vary from those who merely need reassurance that they are buying from a company that aligns with their values, to those seeking to influence a product or service as 'co-creators' or 'prosumers'. They also need to meet their customers where they are in a manner that they embrace – be it in a VR chat room, speaking to a voice bot powered by AI or an informed sales representative on a sales call supported by a robust Customer Relationship Management (CRM) platform.


Privacy, privacy, privacy

Organizations will undoubtedly learn more about their customers from increased use of emerging technologies, but they should be cautious with that data and the insights being gathered. Consumers are becoming warier about the risks involved in sharing data, it is imperative for companies to define and communicate the tangible benefits the consumer derives from this trade. Concern about cyber theft has risen during COVID-19. Six out of ten consumers were worried about this. Only COVID-19 (73 percent) was seen as a more serious external threat.

of consumers do not expect a business to sell or share their personal data.

Almost half – 47 percent – of consumers expect companies never to sell their data to third parties. That expectation is even higher in North America, among the Silent Generation, Baby Boomers and women. Many consumers' concerns about data can be summed up in three words: privacy, privacy, privacy.

Protecting that right has prompted regulators in Europe, parts of North America and China to tighten the rules on what organizations can do with personal data.

For businesses aiming to build a competitive advantage through personalization, a new mindset is a prerequisite. Appropriate technology can certainly help. Ultimately the greatest challenge may prove to be consumers who, having taken a long hard look at the risks and rewards, withdraw their data – and their consent – that provide the fuel to underpin personalization efforts.