A complete guide to personalization in 2023

After all the uncertainty caused by a global pandemic, people are understandably craving the comforting embrace of familiarity—and they’re looking for it in all sorts of places. A 2020 study showed that customers only wanted to buy from the companies that knew them best. Seventy percent said they would do their holiday shopping exclusively with brands that personally understand them.

Clearly, there’s a big reward to be had in personalizing customer experiences. But there’s also a great risk in elevating personalization over privacy concerns. To thread the needle, learn how to personalize every customer interaction while also embracing the latest personalization trends in data privacy.

What is personalization?

“I look at personalization as adding familiarity for end-users,” says Jason Maloney, a customer success executive at Zendesk. “As humans, we are drawn to the familiar. We are drawn to our comfort zone. So, whenever a person is interacting with a company, they want that sensation of, ‘Oh, I feel like they know me, and they understand my wants and needs.’ ”

Of course, getting to that level of personalization is challenging. It requires lots of data, along with the ability to leverage it at each stage of the customer journey.

How data-driven personalization works

Before you can customize an experience to an individual, you first have to learn about them. That’s why personalization begins with data collection. Companies capture all types of customer information, including:

• Personal identification (name, address, date of birth, etc.)
• Search history
• Previous orders
• Status of current orders
• Prior customer service interactions
• Device information (for example, whether they use a mobile device or a laptop to interact with a brand)
• Payment information from previous purchases
• Plan or subscription details
• Conversational data (information shared in conversation with human agents or chatbots, including shirt size, favorite brands, etc.)

There are certain details—such as shipping addresses and credit card numbers—that customers consciously hand over to companies. But other details are covertly captured by “cookies,” or bits of code that track everything a customer does on a website.

The data that companies collect about their customers is called “first-party data,” and it’s used to add context and customization to future interactions. It’s also often sold to other companies, who use it as “second-party data” for targeting prospective customers.

Companies won’t sell a customer’s private info, but they will sell search and transaction history. So, if you buy hiking boots from one brand, you may get ads for backpacks or trail mix from other brands.

[Related read: Personalization’s deep data foundations]

Of course, those sort of hyper-specific ads can be a bit unsettling, whether or not you’re already a customer. “You kind of want to ride the line of being familiar without being creepy,” Maloney cautions.

Everyone’s probably had the experience of mentioning something in conversation, then opening a social media app on their phone and seeing an ad for it. That sort of “Big Brother is listening” sensation falls onto the “creepy side” of the familiar-to-creepy continuum.

But everyone’s also likely had the annoying experience of buying something online, and then continuing to see ads for it a week later. In that situation, there’s no unsettling feeling that you’re being watched. If anything, you’re more irritated that advertisers know too little about you to recognize that you’ve moved on.

The “sweet spot” is when you get a special offer on an item you’ve been eyeing recently, and it feels like serendipity. If you can order it with one click because the seller already knows you, there’s an additional element of convenience. If you call to check the status of your order and the support agent already seems to know exactly who you are and why you’re calling…well, that’s the magic of personalization.

Therein lies the contradiction. Consumers may express privacy concerns, but they’ve also grown dependent on the perks of personalization—a phenomenon known as customer entitlement.

“There’s always going to be a question of privacy versus personalization,” says Sam Chandler, senior manager of customer success at Zendesk. “But the more I’ve talked to customers, the more I’ve found that there’s an expectation that brands take the information they have about them and use it to make their experience better.”

[Related read: How to provide data-driven personalization throughout the customer lifecycle]

How to provide personalization in marketing and sales

Personalization often starts before a consumer is even a customer. It begins with personalized marketing, which leverages data to send targeted ads and messages to current and potential customers.

There are multiple ways to provide personalization in marketing and advertising. Ecommerce companies will often use the aforementioned cookies to keep track of items that customers have looked at. Then, automated online advertisements read those cookies and generate ads for the last item a customer has viewed.

B2B companies, on the other hand, often use more sophisticated lead generation techniques to find their audience. They’ll create ebooks, white papers, and other types of gated content, then require visitors to fill out a lead capture form to access them.

A typical lead capture form.

Once a lead has handed over their info, a business can start sending them personalized marketing materials. After downloading a report from a company’s website, a person might receive an email invitation to a webinar on the same topic, for instance.

When a lead expresses clear interest in a product or service, they expect quick, personalized responses. A recent study found that fast response times are the most important element of a sales interaction. So, if a lead signs up for a free trial, they should swiftly receive an email from a sales rep offering advice on how to get started. (This message should address the lead by name, too—emails with personalized subject lines are 26 percent more likely to get opened.)

Manual prospect outreach is time-consuming, so it often prevents reps from responding quickly. That’s why many companies use engagement tools like Zendesk to automate outreach without sacrificing personalization. Integrations like Reach can create customized email sequences with personalized templates, allowing reps to automatically follow up with leads.

For example: You might set the first personalized follow-up email to send as soon as the lead takes action, then schedule the second message for three days later if there’s no reply to the first one. Each note is personally addressed to the lead, and the type of campaign is customized to the type of prospect.

[Related read: Personalize outreach at scale with sales engagement automation]

Personalization workbook

Use this workbook to help your team deliver more personalized customer service.

Download personalization workbook

How to provide personalization in customer service and support

After a lead is converted to a customer, personalization takes on even greater importance. Armed with more information about your individual customers (specifically, their product usage and purchasing data), you can better tailor your brand experience for every single one of them. If you successfully meet customers’ needs with personalized support, you’re more likely to retain them in the long run.

So, what does personalized service look like?

According to Maloney, “It looks like reaching out to customer support for help, and instead of hearing, ‘What can I help you with?’ they say, ‘I noticed you ordered a T-shirt from us that was delivered yesterday. Do you have a question about this order?’ It’s almost as if they’ve got caller ID. They’re familiar with you, they know what you’re doing, they know what you’ve done beforehand, and they know what relationship you have with the company.”

Obviously, that’s a lot of information for support agents to know on command; fortunately, they don’t need to memorize it. CRM software has enabled companies to store vast collections of customer data. Thanks to tools like Zendesk’s customer context tools, agents have all the info they need right at their fingertips, enabling them to provide more personalized service.

The Zendesk Agent Workspace.

In one unified workspace, agents can see every pertinent detail about the customer they’re interacting with. That includes basic information—such as name, language, and contact info—which is visible on the customer’s essentials card. Zendesk also documents the history of each interaction a customer has had with a company, including past purchases and previous support requests. Agents can even see customers’ recent web and shopping cart activity, so they’ll know what pages were viewed right before talking to them.

“If a customer has a question and they’ve read three knowledge-base articles before submitting a ticket,” Maloney says, “the agent will know what articles they’ve already read.”

That level of insight prevents agents from recommending the same solutions customers have already rejected. It also makes finding the right answer a faster experience for both the agent and the customer.

This gets to the heart of personalization in customer service: It’s knowing everything you can about a customer to find a solution as quickly as possible and save them the trouble of repeating information over and over again.

[Related read: An enterprise guide to personalized service]

Emerging personalization trends

In the wake of a global pandemic, customer interactions largely moved online. The increased importance of the digital customer experience has made personalization more relevant than ever before. At the same time, it’s also given some customers pause about how much data they should be sharing. But this year’s biggest personalization trends point to a future of more informed customer consent.

• A shift towards privacy and transparency

  The personalization-privacy paradox isn’t going away anytime soon. But some companies are squaring the circle by continuing to collect info while also providing more transparency about why and how they do it.

  The average privacy budget at businesses doubled in 2020, according to the Cisco Data Privacy Benchmark Study. In return, companies reaped nearly double the returns for every dollar they spent on data privacy. The most commonly cited benefit was “building trust,” which 76 percent of businesses reported was a result of increased privacy.

  Companies should tout their commitment to privacy and protection so customers feel reassured. They should also be more upfront in general about how and why they capture customer data—both to build trust and comply with regulations.

  Zendesk’s own research found that one in five customers wants companies to have as little of their data as possible. That’s a 50-percent jump from the year prior. But other research has shown that customers are more comfortable with sharing info if they’re better informed about privacy policies.

  So, don’t just ask customers to click “accept” on a consent form written in miles and miles of legalese. This lack of clarity can lead to confusion or mistrust. Among consumers who feel they can’t protect their personal information, 79 percent blame it on their inability to understand what they’re asked to consent to.

  Providing a clear, concise explanation of what data you want to collect and how you’ll use it to improve their customer experience will help put previously skeptical customers at ease.

• A move towards messaging

  Last year, there was a huge spike in the use of messaging as a customer support channel. According to the Zendesk Customer Experience Trends Report, messaging experienced the biggest increase in popularity of any channel last year. The use of SMS/texting rose by 28 percent, and social messaging surged by 36 percent.

  Many companies have been quick to embrace the consumer trend and prioritized adding messaging channels—a move that’s paying off. We found that companies with the fastest resolution times and highest CSATs are more likely to use messaging with their customers.

  As a communication method, messaging fits the personalization model. It allows customers to reach companies through their preferred platforms, including apps like WeChat, WhatsApp, and Facebook Messenger. Messaging also creates more convenient and personal interactions by allowing for casual, ongoing conversations between a consumer and a brand. This support channel even works well with chatbot software; chatbots often have access to tons of customer data and can process it more quickly than human reps.

  Perhaps most importantly, though, messaging can help bridge that gap between data collection and transparency. When a customer provides information, both human agents and chatbots are able to ask if the customer wants that data stored.

  For example, say you message a company about a pair of shoes you want. The company will likely ask for your size. After you answer, you might be asked, “Can we keep this info on hand for future purchases?” Then it’s up to you to click yes or no.

Personalize every interaction by remembering every interaction

Our Customer Experience Trends Report 2022 revealed that 92 percent of consumers will spend more with companies that ensure they won’t need to repeat information.

“We know that customers hate repeating themselves,” Chandler says. “But that doesn’t just mean having to repeat themselves in conversations with customer support—that’s a really old-school way of looking at it.”

Strive to create experiences where customers never have to repeat themselves in any context. To do that, you’ll need a powerful platform for recording every interaction and personal detail customers share.

An open and flexible CRM like Zendesk is a great place to house your customer data. When connected to sales and support software, Zendesk automatically captures each customer’s interaction history. Sales reps and support agents can then easily access this data to provide faster, personalized experiences. Show your customers just how well you understand and value them to earn their trust and loyalty.