Personalized Customer Experience: The Future of Success

Understanding the personalized customer experience can be challenging but worth the trouble. Unless, of course, you're happy to see behemoths crush you and start-ups undercut your markets. Hype masters have used the term customer experience "personalization" in different ways for years: relationship marketing, one-on-one business, mass customization.

Personalizing the customer experience is actually all of these and more. In a sense, this is a call for a return to a time decades ago when people would enter a store and a clerk could address them by name, know their preferences, and bring up specials and new products they thought the customers would like.

Unfortunately, personalized treatment frequently becomes difficult as a company scales. By the time you have a mid-sized organization, there are too many customers, too many channels, and too many interactions among employees and customers who have never met before to allow this sort of recognition. That is why companies use technology to aid personalization and to create new ways to offer customers what makes them feel most comfortable.

Personalized customer experiences are not a fad. They are slowly becoming the norm as companies experiment and learn how to offer personalized experiences through technology to gain competitive advantage. Here are just some of the examples of these powerful techniques in real and practical ways:

• Companies like Google allow users to customize information tools to suit their own needs and preferences.
• Levi's offers actual bespoke jeans through their stores.
• Such cloud-delivered CRM vendors as Salesforce and Zoho allow their clients to customize aspects of the software.
• Dr. Scholl's offers automated fitting and orthotic selection through special kiosks at retailers.
• Capital One offers credit cards with a customer's own image on the front.
• IBM can personalize marketing messages for a company based on someone's IP address, even without having them register on a website, and visitors to IBM.com can personalize their experience with a profile.
• A growing number of restaurants, whether single unit or chains, strive to offer dishes for people with food allergies and sensitivities.
• Since the 1920s, tool vendor Snap-On has brought the store buying experience via special trucks to its customers.
• Startup True&Co uses customer feedback and big data analytic tools to offer better bra fits for women without requiring any of them to enter a store.

The trick for mid-sized companies considering customer personalization is to thoroughly understand and study how customers interact with your company. See people place orders, use products, navigate websites. This is market research at its most basic and useful. When you experience customers as individuals and see how they differ, you'll find the spaces where customization can enhance their experience.

There are many important things in business, of course. But passing this by would be a dangerous idea. According to Niraj Dawar, a professor at the Ivey Business School and author of the new book Tilt: Shifting Your Strategy from Products to Customers, companies have traditionally sought competitive advantage in upstream operations, or the "value-creation activities related to production and products." But the world changes quickly and such advantages can disappear, the victims of Clayton Christensen's Innovator's Dilemma. Product innovation is as close as a consulting firm and outsourcing company. The solution, he argues, is focusing on the innate value customers find in doing business with your company.

Part of the value found in a customer's experience today is that they expect companies to work the way they want to do business. After all, there are always other companies who might be a better fit. For that reason, market analyst firm Ovum has estimated that 90 percent of companies are putting themselves at risk by not adapting to customers. This is an especially important consideration for middle market companies trying to achieve sustained growth.

With competitors above and below you ready to adapt to customers, can you really afford to remain indifferent?

Erik Sherman is an NCMM contributor and a regular business and technology columnist for CBSNews.com and Inc.com. His work has appeared in such publications as The Wall Street Journal, New York Times Magazine, Newsweek, Technology Review, and Fortune. He is a public speaker and moderator at business and industry events and the author or co-author of ten books. Follow him on Twitter.