Because I travel so often for work, I like to unplug on longer flights and work my way through a good book. Over the years, my wife has recommended many that have become my favorites. She knows the important details: what I find appealing in a characters and settings, that hardback books travel better in my case, how often I’ll likely need a new book. Her choices for me are often exceptional reads because over time she’s learned my personal quirks and interests.
If my wife recommends it, I read it. Simple as that. So how can companies reach that same level of trust with their customers?
Major retailers like Amazon and Netflix have harnessed the awesome power of personalized recommendations to benefit their customers and their bottom lines. New research confirms that more than 30 percent of Amazon’s revenue can be attributed to suggested purchases based on customers’ past purchases and their virtual shopping cart. Meanwhile, 75 percent of Netflix rentals are driven by personalized suggestions calculated by hundreds of sub-genres within the movies viewed by customers.
Granted, not every company’s offerings can be so specifically based on consumers’ profiles and tastes, but research proves what we intuitively know: that we crave intelligent and personalized communications, and that when it works, we only want more.
Back to my wife the bookworm for a moment. The power of her recommendations are compounded by her impeccable sense of timing. She never recommends 25 books all at once. Nor does she leave me in the lurch for six months without a recommendation. By knowing when I need a book and rewarding that need in a timely fashion, her recommendations find their way into my bag over and over again. That, in a nutshell, is how preference management powers customer personalization.
Without the ability to anticipate a consumer’s wants and needs, or the way to best communicate with them, companies lose out on relationship-building efforts that have the potential to garner significant returns down the road. As we move towards an increasingly curated, personalized and recommended society, every company must ask itself – have we earned the right to influence our customer’s decisions?