The state of customer experience in 2023
Let’s kick things off by looking at the state of customer experience in 2023.
Consumers are spending less
Thanks to inflation and fears of recession, global consumer confidence is way down. Fitch Ratings forecasts US consumer spending growth will slow to just 0.2% in 2023 compared with 2.8% last year.
Rising food prices, rents and mortgage payments, high energy costs, economic uncertainty, and the threat of job losses are all making people spend less in 2023. This means many B2C businesses are struggling to hit their customer acquisition and revenue targets which, in turn, puts pressure on marketing budgets and marketing departments this year to deliver stronger returns on every investment.
Customer acquisition costs are up 222%
Even more important to digital marketers is the rise of customer acquisition costs (CACs). With the upcoming end of third-party cookies, plus iOS updates and changes to privacy regulations worldwide, brands can no longer target new customers via digital channels using the same tools and tactics as before.
The result of these changes? An average loss of $29 for every new customer acquired in 2022, according to research from Simplicity DX.
Smart marketers have responded by reassessing their CX strategy. They’re looking at how and where to get the biggest return for their time and marketing spend. Here are the three most cost-effective CX strategies that leading brands are using right now.
Three cost-effective CX strategies to employ in 2023
It’s no wonder forward-thinking brands are looking to boost profitability by refocusing their attention away from costly customer acquisition and towards maximizing customer lifetime value (CLTV) instead. They’re doing this in three key ways:
- Consolidating and simplifying the marketing technology (martech) stack to remove data silos, create unified customer profiles, and lower costs.
- Prioritizing deep customer segmentation to deliver data-driven, personalized messages—to the right people at the right time
- Refocusing efforts on customer engagement, retention, and loyalty over more costly customer acquisition strategies
Now, let’s take each of these in more detail and examine how we can help digital leaders execute these strategies.
1. Consolidate your martech stack to a single, central platform
One of the biggest problems with martech today is its complexity. 60% of business-to-business marketers say their tech stack is too complex, while 20% of retail marketers say their martech isn’t doing what they want it to.
Unsurprisingly, using the wrong tech—or having too many tools and apps running and overlapping—is the easiest way to throw away precious software dollars and negatively impact ROI.
A marketing team that uses multiple-point customer data solutions to execute its digital campaigns runs up against the data fragmentation problem. Each solution uses its own source of customer data, which leads to siloed and incomplete customer profiles. The team has to collate, analyze, and report on data from disparate systems. Not only is this a big and inefficient headache for your team, but it delivers a disconnected experience to your customer, too.
Consolidating your CX tech stack has three huge benefits:
You’ll save time
Consolidating your martech stack into one centralized solution saves your marketing team time and effort by enabling them to run everything from a single platform. No more logging into multiple tools or having to run multiple reports. No more data silos. And no more unconnected customer data.
You’ll save costs
You’ll improve the customer experience
More importantly, Insider’s smooth and well-structured approach to integration allows clients to pull customer data from multiple sources, including websites, apps, CRM, POS, contact centers, and email. This data consolidation allows clients to create a genuine 360-degree view of their customers—all in one place.
Having a single data platform with a unified customer profile is the foundation of all successful personalization. But as a customer data and experience platform (CDXP), Insider also allows brands to execute campaigns through multiple built-in channels all connected to the unified customer profile. This next level of integration enables brands to respond to customers in real-time and optimize their ROI even more.
What’s more, our world-class integration process helps clients onboard and gain value 4X faster than any other vendor.
Insider in action: How NA-KD increased customer lifetime value (CLTV) by breaking down data silos
Fast-growing European fashion brand NA-KD had built a combination of single-point martech solutions and in-house technology which kept their customer data fragmented and locked in silos.
They turned to Insider to consolidate their tech stack into a single unified solution, finally achieving a 360-degree unified view of each customer. From there, they were able to create personalized and cross-channel customer experiences which resulted in a 25% uplift in CLTV.
2. Prioritize deep customer segmentation to deliver data-driven, personalized messages—to the right people at the right time
Deep segmentation helps brands avoid wasting money on bulk messaging that gets poor responses by empowering them to send relevant, timely, and data-driven messages. This all helps to build customer trust, engagement, loyalty and increase customer spend.
With Insider, you can define up to 300 custom/default attributes and up to 200 custom/default events, along with more than 120 segmentation rules to create detailed and contextual customer segments. Segment by attributes such as purchase history, shopping frequency and recency, and predicted behaviors.
With Insider, you can use over 120 customer segmentation attributes to create detailed and contextual segments, including purchase history, shopping frequency and recency, and predicted behaviors.
This level of granularity—plus the ability to write your own algorithmic rules—“will help you understand your customers better and serve them tailored experiences that improve your marketing results and ROI,” says Insider partner and senior performance marketing specialist at an airline company.
⭐⭐⭐⭐⭐ “Insider offers real-time segmentation with dynamic attributes which have done wonders in improving our marketing spend and KPIs. We are no longer wasting money on guesswork audiences. With Insider’s precise segments, we are able to target the right group with the ideal messaging for them, and our conversions have improved, and we’re gaining better ROI than ever before.”
— Performance marketing manager at a food group and Insider partner, read the full review on G2.
3. Invest in customer engagement, retention, and loyalty
With the twin foundations of data consolidation and granular segmentation in place, brands can invest in data-driven tests to drive engagement and retention. This is a great recession-proofing strategy because it costs less to keep a customer than to acquire one, and engaged customers will spend more, which reduces costs and increases revenue.
Insider in action: How Clarins combined deep segmentation and gamification to delight and entice their most active users
Beauty brand Clarins wanted to boost revenue by rewarding their most active website users with discounts via a gamification strategy. They used Insider’s predictive segmentation to target active users who would be more likely to engage with the game, resulting in over 4,000 gamified coupons for customers—and an uptick in revenue.
“Working with Insider has helped us increase our subscriber rate steadily, and run effective campaigns to boost purchase rates,” says Alice, Senior Manager eCommerce at Clarins.
Customers will spend with you if you take the time to understand them
With consumer spending trending downwards, it would be easy for eCommerce and marketing teams to panic and cut ad spend—or to go the other way and spend more on acquisition.
Yet the experiences of our clients suggest the opposite approach is more effective. To stay calm and invest in a customer data and experience platform that allows you to build rich, unified customer profiles, to better understand your customers and their intent, and to personalize your campaigns in ways that will surprise and delight them.
Recession-proofing your CX strategy relies on delivering experiences that are relevant, timely and, most importantly, personalized. Personalization is built on accurate segmentation, which is built on accurate data. So take the time to invest in these two foundations, you’re well on your way to recession-proofing your CX.
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