How to Recover With a Data-Driven Personalization Strategy

How to Recover With a Data-Driven Personalization Strategy

As the recovery from COVID-19 progresses, it’s likely that this will become the defining era of our lifetimes. A global shutdown of nearly all economic and social activities has led to record unemployment, and governments around the world are now tasked with balancing a gradual reopening with the need for public safety.

Brands, too, are trying to navigate this new environment. The situation on the ground will continue to evolve rapidly in the coming months, calling for a level of strategic flexibility unheard of in the pre-pandemic era. Your brand’s strategy should also be guided by the changes your industry has experienced, and whether or not those changes will be maintained post-curve.

How COVID-19 has affected key industries

Depending on the industry, brands may have experienced unprecedented upswings or dramatic downswings. However, with supply chains interrupted, even companies that have benefited financially have seen their share of challenges.

Grocery stores saw skyrocketing demand as shoppers followed government advice to stock up and limit shopping trips. But the resulting shortages—and images of empty shelves circulating online—exacerbated panic buying behaviors and dinged brand images.

The travel industry, including airlines, sustained significant economic damage in the wake of numerous travel bans implemented in March. Now, though, domestic air travel is beginning to see an increase as states have started to ease restrictions on movement.

eCommerce and delivery services both saw a dramatic rise as well, but struggled with overloaded digital systems and staff shortage issues that made it difficult to meet demand.

Restaurants were hard hit by the closure of dining rooms worldwide, causing significant furloughs and layoffs. While many shifted to offering takeout or delivery, some completely changed their business model to become local mini-markets or sell DIY meal kits.

As economies slowly reopen, it remains to be seen which shifts in consumer behavior are temporary, and which are permanent. Your brand may need to make some changes to your customer view and your strategy in order to capitalize going forward.

3 steps to maintain customer loyalty and retain valuable customer behaviors

Although the economic future is hard to predict right now, there are some steps you can take to stay top-of-mind with customers, and even encourage them to continue some favorable behaviors.

1. Develop a data-led mindset that considers your customers as individuals.

As we’ve discussed before, the path to recovery will vary significantly for each individual consumer. This will nullify old behavioral models based on segmentation, making them no longer effective. Instead of using data modeling to prove the validity of your strategies, let your data dictate your strategy from the beginning.

2. Analyze data in real-time to dynamically calculate customer intent.

All data-led strategies require some reliance on technology. Artificial intelligence (AI) and machine learning (ML) solutions can analyze customer data and behavior in real-time on an individual level, which would be impossible for human teams. At the same time, these technologies must be paired with human oversight so their modeling is not affected by trends that are clearly temporary, such as consumers purchasing large quantities of toilet paper and bottled water at the start of the pandemic.

3. Work to achieve 1:1 personalization.

With each customer’s journey to recovery being unique, one-size-fits-all offers and promotions will be even less effective than in the past. Start thinking about how you will achieve the individualized marketing and offers that this new era demands. Your AI and ML solution should be able to help you personalize your marketing actions on an individual level. One example of this would be creating multi-step behavioral offers, which are 1:1 personalized offers that help reinforce valuable customer behaviors over time.

New customer trends and action steps for key verticals

The action steps your brand will need to take to prepare for the post-COVID economy will vary depending what industry it’s in. We’ve outlined the specifics for a few different verticals:

Groceries

New customer trends: Grocery purchases were up 55% in March, as shoppers tried to stockpile essentials from flour to paper products and limit their number of shopping trips. They also reduced the number of stores they frequented, down to 1-2 from a previous 4-5. Shopping patterns changed to include more foods with long shelf lives as customers prepared for possible self-isolation. Demand for digital ordering, grocery deliveries and curbside pickups all spiked, quickly outstripping the number of time slots for these services.

What to expect now: Stockpiling will begin to decline now that consumers have amassed as many goods as they can store. But due to recent shortages, shoppers will continue to arrive early to find their preferred items in stock. Curbside pick-ups and deliveries are likely to remain popular as consumers try to maintain their personal safety during reopening. Most importantly, because grocers have earned a larger share of customers’ wallets, they’ll need to take steps to retain as much of that share as they can.

How to adapt and personalize: Implement a data-led strategy to understand the changes in your customers’ behavior. You can then incentivize customers to maintain or change their behavior (depending what’s beneficial for your brand). For example:

  • When some items are in low supply, replace that shopping pattern with a different one. Offer incentives on items customers purchased prior to the outbreak, but have not bought recently.
  • If stores are too full at certain times of day, incentivize shopping during off-peak hours to reduce lines and crowding.
  • If deliveries or pickups are overbooked, use incentives to encourage booking times that are further out or less popular.
  • To maintain highly valuable new buying patterns, such as customers buying more items from you due to consolidated shopping, , reinforce those behaviors by creating personalized offers around them.

Air travel

New customer trends: Travel from mid-March through April nearly ground to a halt, with most consumers canceling their travel plans due to coronavirus concerns and stay-at-home orders. Airline communications focused primarily on customer service, assisting customers with deferring travel, or making adjustments to their rewards program to maintain the loyalty of their best customers.

What to expect now: The travel standstill seems to be slowly coming to an end, with airline bookings increasing throughout the month of May, and nearly 75% of Americans saying they plan to travel this year. The airlines likely to see the bulk of these bookings are those that can convince consumers they are the safest. As a result, we’ll see unexpected brand partnerships, such as United Airlines partnering with Clorox to create new cleaning protocols and procedures.

How to adapt and personalize: Use behavioral data gathered from your customers to improve the customer experience.

  • Understand your customers’ activity—for example, let’s say Customer A is a top tier rewards member, but hasn’t searched for flights since the pandemic began. Meanwhile Customer B, although entry-level, is actively searching for flights. This could indicate that Customer B feels it’s safe to start traveling, while Customer A has not yet reached that point.
  • Create individualized marketing offers and communications based on this data. In the case of the example above, Customer B could be sent a loyalty offer to encourage a new booking. Customer A, however, is not yet ready to fly. Instead, they can be sent engagement communications to keep them apprised of new developments like extra safety precautions.

Quick-serve restaurants

New customer trends: During the shutdown, many restaurants were closed completely, while others remained open for only takeout service. Combined with pandemic fears, this made the commonly used “try a new item” offer highly ineffective.

What to expect now: Data shows that with stores not yet reopened or newly reopened, traffic is still slow. Brands won’t be able to bring customers back with discounts alone, as people may not be returning due to other factors, ranging from local store closures to safety concerns.

How to adapt and personalize: Use human oversight to delve into the differences between your pre-pandemic and post-pandemic data.

  • Adjust your predictive modeling to account for temporary behavior changes and permanent changes to the consumer environment such as store closures. Create alternative incentives that are relevant to the current situations, like offers for the nearest open store or engagement initiatives to promote social sharing.
  • Leverage mobile device information from your loyalty app to learn more about your customers. Are they working from home and staying in the same place every day? Are they essential workers traveling only from point A to point B? This type of knowledge can help you personalize your offerings, whether that means customizing them to the consumer’s travel route or holding off on offers until you see more movement.

Find the right approach for the rebound

COVID-19 has changed and continues to change consumer behavior and the economy. As Rich Lesser, chief executive of the Boston Consulting Group, stated, “Shutting down was hard, but opening up is going to be harder.” This era calls for flexibility, and the brands that will best be able to achieve it are those with data-led strategies. By using data to create personalized customer experiences that can change as your customers do, your brand will be able to adapt for whatever this “new economy” has in store.

Learn more about the importance of customer loyalty in building strong relationships with your customers. Read our latest white paper, “How to Uplevel Your Customer Loyalty Program,” now.