Which of the following highlights the downside of using personalized service?

Most businesses leverage industry trends, innovative ideas and customer and business needs to create products and services customers are willing to purchase and refer to their friends and family. While their are many factors and stakeholders to consider when running a small business, some owners lean towards operating customer-focused businesses, which operate based on customers’ needs and demands. There are a variety of advantages and disadvantages for every company adopting a customer-focused business approach.

Advantage: Build Loyalty

Running a customer-focused business helps organizations build a loyal customer base. Customers are more willing to purchase from companies that they feel consider their needs when they create products and services. Customer also are frequent patrons to businesses that place a high value on training their staffs to emphasize customer service.

Advantage: Increase Referrals

The more loyal customers are to a business, the more likely they are to refer the products or services to friends, family and business associates. Referrals are advantageous to businesses as they cut down on advertising expenses. Customers who come to businesses through referrals also generally are prequalified, which makes it easier to turn them from prospective customers to buyers.

Advantage: Celebrated for Customer Service

Customer service becomes a part of your company's brand when you run a customer-focused business. When customers hear the name of your business, they automatically associate it with knowledgeable and friendly sales professionals and a company dedicated to ensuring customers' needs are met. Companies such as online retailer Zappos and Trader Joe's are celebrated for their dedication to being customer-focused businesses and providing superior customer service.

Disadvantage: Lack of Innovation

Customer-focused businesses operate solely on customers' needs and wants, which can have a negative impact on a company's creativity. When companies are customer-focused, they may resist coming up with ideas to improve products or create new products, so they begin to lack innovation. While customers may know what they want, companies should use research and development to come up with ideas customers may not think of on their own when surveyed about their needs.

Disadvantage: Ever-Changing Customer Needs

Customers' needs are ever-changing, which means your customer-focused business needs to have the resources, such as financing, staffing and time, to constantly keep up with customer demands. This may be problematic for small business, as it can be expensive and lead to employee burnout.

Disadvantage: May Become Self-Serving

The purpose of running a customer-focused business is to truly focus on creating products and services that are in your customers' best interest. This includes ensuring that you provide customer service that helps educate your customers and lead them to sales. Customer-focused businesses can become self-serving, causing businesses to indulge in their needs and wants, such as focusing solely on profit, with thoughts of the customer trailing far behind. To be truly customer-focused, each strategy and idea you execute should put the customer first.

From Spotify to Netflix and Amazon, we’re surrounded by extreme personalization every day. Consumers have come to expect that same level of personalization from companies of all sizes. Investing in personalization efforts to build relationships and create better experiences can pay off with serious rewards for brands. And in a world where the vast majority of companies are focused on improving personalization, companies that don’t prioritize creating a tailored experience run the risk of getting left behind. 

Here are 50 statistics that show the power and potential of personalization. 

Current State Of Personalization

71% of consumers feel frustrated when a shopping experience is impersonal. - Segment

70% of millennials are frustrated with brands sending irrelevant emails. - SmarterHQ

74% of customers feel frustrated when website content is not personalized. - Instapage

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47% of consumers check Amazon if the brand they’re shopping with doesn’t provide product suggestions that are relevant. - SmarterHQ

36% of consumers say retailers need to do more to offer personalized experiences. - Retail TouchPoints

Customers Want Personalization—And Are Willing To Share Info To Get It

91% of consumers say they are more likely to shop with brands that provide offers and recommendations that are relevant to them. - Accenture

80% of consumers are more likely to make a purchase from a brand that provides personalized experiences. - Epsilon

90% of U.S. consumers find marketing personalization very or somewhat appealing. - Statista

72% of consumers say they only engage with personalized messaging. - SmarterHQ

80% of frequent shoppers only shop with brands that personalize the experience. - SmarterHQ

56% of online shoppers are more likely to return to a website that recommends products. - Invesp

63% of consumers will stop buying from brands that use poor personalization tactics. - Smart Insights

say encountering content that isn’t personalized would stop them from making a purchase. - CMO by Adobe

are annoyed when content isn’t personalized. - CMO by Adobe

More than 50% of consumers are willing to share information on products they like in order to get personalized discounts. - Retail TouchPoints

83% of consumers are willing to share their data to create a more a personalized experience. - Accenture

90% of consumers are willing to share personal behavioral data with companies for a cheaper and easier experience. - SmarterHQ

64% of consumers are fine with retailers saving their purchase history and preferences if it allows them to offer more personalized experiences. - BRP Consulting

Businesses Are Prioritizing Personalization

98% of marketers say personalization advances customer relationships. - Evergage

89% of digital businesses are investing in personalization. - Forrester

79% of retailers are investing in personalization, the most of any industry. - SmarterHQ

51% of marketers say personalization is their top priority. - SmarterHQ

88% of marketers say their biggest driver in personalization is to deliver a better customer experience. - Evergage

What Personalization Looks Like When Done Well

84% of consumers say being treated like a person, not a number, is very important to winning their business. - Salesforce

74% of consumers say “living profiles” with more detailed personal preferences would be useful if they were used to curate personalized experiences, products and offers. - Accenture

73% of consumers say a business has never communicated with them online in a way that felt too personalized or invasive. - Accenture

70% of consumers say that a company understanding how they use products and services is very important to winning their business. - Salesforce

When customers receive transparent ads based on their activity on a site, the revenue of the product grows by 38%. - Harvard Business Review

Consumers are 2.1x more likely to view personalized offers as important versus unimportant. - Salesforce

59% of consumers say personalized engagement based on past interactions is very important to winning their business. - Salesforce

70% of consumers say a company’s understanding of their personal needs influences their loyalty. - Salesforce

say it’s important for brands to automatically adjust their content based on their current context for a real-time personalized experience. - CMO by Adobe

Personalized homepage promotions influenced 85% of consumers to buy. - Instapage

Personalized shopping cart recommendations influenced 92% of shoppers online to buy products. - Instapage

Personalization Impacts The Bottom Line

80% of companies report seeing an uplift since implementing personalization. - Econsultancy

Companies using advanced personalization report a $20 return for every $1 spent. - Clickz

Marketers report that personalization efforts can boost revenues by up to 15%. - Adweek

86% of marketers have seen a measurable lift in business results from their personalization campaigns. - Evergage

Millennial brand loyalty increases by 28% if they receive personalized communication. - SmarterHQ

95% of companies that saw 3x ROI from their personalization efforts increased profitability in the year after their personalization efforts. - Monetate

88% of U.S. marketers have seen measurable improvements due to personalization, with more than half reporting a lift greater than 10%. - Instapage

Personalization can reduce customer acquisition costs by up to 50%. - Adweek

Personalization can increase marketing spend efficiency by up to 30%. - Adweek

Companies that exceed their revenue goals have a dedicated budget for personalization 83% of the time. - Monetate

55% of marketers say the top benefit of personalization is increased visitor engagement and improved customer experience. - Evergage

The Secret To Personalized Email Marketing

Emails with personalized subject lines are 26% more likely to be opened. - Campaign Monitor

71% of consumers say a personalized experience would influence their decision to open and read brand emails. - Dynamic Yield

55% of consumers believe receiving targeted promotions and discounts would create a more enjoyable email experience. - Dynamic Yield

Marketers report a 760% increase in email revenue from personalized and segmented campaigns. - Campaign Monitor

Personalized calls to action convert than default or standard calls to action. - HubSpot

Blake Morgan is a customer experience futurist and the author of two books including her new book The Customer Of The Future. Learn more by signing up for her weekly newsletter here.

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