Personalized customer service; the key to better retention

**Excerpt from the Nosto ebook ‘How to Increase Customer Retention with Personalization’, download in full for more tips including the use of personalized email and advertising! **


Customer retention, while arguably one of the most important goals for any ecommerce company, is not a subject matter that is always given the attention it deserves. Attention is instead focused on what can feel like the quicker wins of attracting and converting new customers – in fact, some sources state that up to 90% of personalized marketing budgets are spent on this alone.

This is despite the fact that attracting a new customer can cost five times as much as keeping an existing one. And new customers are not only more expensive to attract but less likely to convert, with the probability of selling to new customer being only 5–20%, compared to 60–70% for an existing customer.

All of this means that increasing customer retention rates by just 5% could increase profits by anywhere from 25% to 95%.

There are many ways to increase customer retention – loyalty programmes, flexible payment options and fast delivery – but in this blog we will look specifically at customer service channels focusing on customer experience marketing. Even more specifically we will look at how you can take your efforts in this areas to another level of engagement and performance, translating directly to increased customer retention, all with the use of website personalization.


Now, your customer service channels are one of the most important areas of your business – firstly, because they are the cross section at which your business and potential shoppers meet in a two-way communication and secondly, because it is where prospects and customers alike come to ask questions, seek advice and, inevitably, to complain. All of which are opportunities to inspire certain actions (conversion, upselling, repeat orders) and at the same time make an impression that will get them to return in the future.

Your real-time customer service channels are always, to some extent, going to be personalized – they are responding to the needs of an individual customer, after all. But they can and should go one step further by using all of the information available on the preferences and behavior of that consumer to assist, and indeed predict, their needs.

In this blog we will look specifically at the ‘live’ customer service channels of telephone communication, on-site chat and messaging services. We will then look briefly at the use of chat bots. All of which can be improved with personalization.

So, let’s begin…


Your customer service channels:

It is possible to see telephone communications as one of the more traditional and therefore outdated models of interacting with your customers. But, while it is true that other methods are flourishing, 61% of consumers still want to have the option to contact a company by telephone. As a channel which enables one-to-one real-time conversation, it should more than lend itself to personalized interactions. Yet many companies don’t tap into that potential, instead focusing on key metrics such as number of calls taken and queries resolved. This can be solved by simply making sure that your call representatives have access to email logs, customer reviews, surveys, call center notes, and any other information you have acquired in relation to the caller. This will give them valuable insight into their needs and preferences, allowing them to tailor the interaction accordingly.

Live chat has become a common feature of many an personalized ecommerce store, allowing users to keep their communications onsite and therefore not interrupting their user journey- in fact, 63% of online consumers said they were more likely to return to a personalized website that offers this feature. Again, the problem is that many companies use this opportunity to simply be responsive rather than taking the time tailor the service.
Before we move on to chat bots, which play to slightly different rules let’s look at the three ways personalization can be used to personalize these more traditional channels…

1. The use of CRM data to retrieve key customer information

The most common and, perhaps simple, method of personalization is the use of CRM data to achieve basic levels of customer service such as using the shoppers name and accessing their core details such as address. It may sound like a small detail, but sometimes it is the small details that make up a happier bigger picture – and this will encourage customers to return.

There is a particularly amusing example of customer name usage from Zappos, a company that are legendary for their customer support, as detailed on the Infinite Contact blog;

This may be a funny post but it is also very telling – not only was the ‘customer’ greeted by name immediately but they then referred to him in the way he preferred (however ridiculous), and the conversation was tailored to his tone. ‘Timmy’, by testing just how flexible the customer service agents could be, highlighted how willing they are to work to the requirements of the individual.


2. The use of the order/support history to deal with any queries or problems

This involves looking at information such as what they bought, the state of their order or any problems they have reported with their purchase. By using this information to pre-empt their needs the process becomes quicker, smoother and more satisfying for the shopper, who no longer has to spend unnecessary amounts of time explaining their issue (especially if they have to speak to multiple customer service representatives).

Apple for example,
give customers the chance to provide information before a call and then ring in at a time suitable for them- at which point they instantly match the caller with their relevant and individual support history. By allowing the customer service representative time to be fully briefed they are able to spend less time on the phone, which is beneficial to both Apple and their customers.

3. Offer tailored product recommendations relevant to that which they have browsed or bought previously

By going above and beyond their functional queries and offering product recommendations relevant to their individual shopping histories, you offer a more tailored and enjoyable experience which will naturally increase the chances of their return (as well as increasing your sales). This too can be done using your CRM to manually looking at the relevant information and respond appropriately. Or, if you want to take the guesswork out of the process, it can be done with personalization software which will automatically analyze the information and automate the recommendations.

Nike make heavy use of “expert” customer representatives, with specialist interest areas – all available on live chat to provide customers with product recommendations.

A new and upcoming form of customer communication that sees brands utilizing previously consumer-specific messaging services such as WhatsApp, Kik and, perhaps most prolifically, Facebook messenger. The attempts of retail companies to engage with their customers in this way can be seen as a reflection of the increased, and accelerating, use of mobile in the retail journey. Although these can be manned by representatives of the company they are also increasingly employing the use of chat bots- AI technology that fully automates customer interactions. This may feel at odds with the personal nature of customer service but research has found that 40% of global consumers prefer self-service over human contact for their interactions with companies.

Personalization could be applied to this channel in two ways-

  • Firstly, by the bot asking and answering a series of questions, the answers to which can be used to learn the likes and dislikes of the shopper it is communicating with. This tactic has already been employed by brands such as Sephora and H&M and Google has announced an AI messaging technology called Allo, one of the features of which will be the ability to analyze conversations and pictures and suggest appropriate responses. If brands were to utilize this channel then it is possible it could be used to to answer queries but also make suggestions personal to what the person is saying.
    An example of H&M chatbots in action


  • Secondly, if connected to on-site personalization software a chat bot should be able to use behavioral data, collected on your site, social media pages and email communications, to make personalized recommendations when prompted within the relevant messaging app. The use of chat bots, however, is still in its infancy and this type of cross-channel, seamless experience is yet to really be seen.


So, there we have it- personalization bringing the customer service experience into the 21st century (and beyond), by offering a tailored individual experience where it matters most and whatever the channel…


**For more tips on personalization for customer retention, including the use of personalized email and advertising, download the latest Nosto ebook by clicking the image below…**


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