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To excel at customer intimacy, you will need data

Technology has reduced barriers to entry across many industries, leading to saturation in some markets and presenting challenges to businesses attempting to differentiate themselves from competitors. Some companies are looking for new strategies to make them memorable to customers while others are turning to traditional thought leadership, like value disciplines, to stand out.

The value disciplines framework was first laid out by Michael Treacy and Fred Wiersema in 1993 as a path companies could follow towards market leadership. Treacy and Wiersema identified three value disciplines—customer intimacy, operational excellence, and product leadership—and suggested that companies need to excel at one discipline and be adequate at the others to succeed.

While all three disciplines have remained important, customer intimacy—understanding your customers better in order to serve them better—has reemerged as a technique to gain customer trust and loyalty for the long-term. For any customer-focused business, intimacy is about investing in gaining knowledge about who is consuming your product and what they want.

For any customer-focused business, intimacy is about investing in gaining knowledge about who is consuming your product and what they want.

More data means more context

Businesses that excel at customer intimacy try to know their customers better than they know themselves. Imagine walking into your favorite clothing retailer. Before you’ve even had time to ask an employee for help, you get a notification on your phone. That message welcomes you to the store, lets you know what new items are available, and informs you about current sales promotions. But that’s not all—given that you shop with that retailer about once a month, you’re a VIP and the company offers a coupon to use on today’s purchase. That sounds great, right?

[Read also: Don't ignore customer data; use it to create a better experience]

While this level of engagement isn’t the standard yet, it is the level of customer intimacy that many businesses are striving for. But intimacy is about more than providing personalized experiences and good customer service; it’s also about getting ahead of the curve.

The reason marketing and advertising agencies are so excited about the growth of big data is the possibility for segmentation and targeted advertising. Although everyone isn’t a fan of digital ads popping up in social media feeds, it’s better when those ads are for something we actually want to buy.

Intimacy is about more than providing personalized experiences and good customer service; it's also about getting ahead of the curve.

Metadata collected through our phones and website user tracking are some methods that lead to more specialized advertising. When a company is able to accurately identify specific market segments, it lets them draw conclusions about individuals in that segment and about the segment as a whole. This kind of segmentation also allows for micro-merchandising—the practice of arranging products differently in different stores to cater to localized customer needs. Processes like these allow businesses to cater more personally to their customers and narrow their target markets, reducing loss.

[Read also: Your customers are important–and so is their data]

Intimacy is about familiarity

It becomes increasingly difficult to know your customers intimately at scale, which is why investing in solutions that help bring customer interactions with your brand to light are so important. Your customer service team, for example, can benefit greatly from knowing everything about a customer’s journey in order to help them as quickly and efficiently as possible. The 2019 Customer Experience Trends Report from Zendesk found that 45 percent of consumers felt having to repeat their information during a support interaction was the most frustrating part of a bad customer experience. Lack of technology is one hurdle, but another is having invested in too many systems that don’t connect to one another, creating a mess of siloed data. Having a platform that allows your customer experience team to consolidate data across systems can provide this holistic understanding of your customers.

[Read also: 5 ways to add meaning to your customer data]

Becoming familiar with customers can also mean inviting them in, rather than waiting for them to reach out to you. Being proactive in both your marketing and customer support can help reduce churn by reminding customers they’re on your mind even after the point of sale. And if you ask what they’re looking for, or what they want more of, or even why they abandoned an item in an online shopping cart, then you have the insight to help deliver exactly the product or experience that they want. This is where data analysis can be a great conversation starter. Big data reveals patterns, and with advances in machine learning, it is becoming increasingly possible to suggest solutions to customers before they’ve even realized they need them.

45 percent of consumers felt having to repeat their information during a support interaction was the most frustrating part of a bad customer experience.

Of course, data isn’t a substitute for fostering customer intimacy in person, whether by establishing a customer advisory board, hosting conferences, or bringing customers in for interviews and conversation.

[Read also: A strategy for using support data to create marketing content that works]

Don’t abuse customer trust

While boosting customer intimacy through data benefits both businesses and consumers, people are becoming increasingly aware of how valuable their data is and want to know who has access to it and how it will be used. When customers opt in to disclose their data, companies must be transparent and use that data with integrity.

Big data reveals patterns, and with advances in machine learning, it is becoming increasingly possible to suggest solutions to customers before they’ve even realized they need them.

There have been several cases in which segmentation and targeted marketing have been seen to violate people’s privacy. Facebook was in hot water in early 2019 for allegations that they knowingly allowed the use of dark ads—advertisements that are hidden to certain users based on immutable traits such as race, gender, and sexual orientation. Erosion of customer trust impacts loyalty over the long-term.

Evan Woock, director of marketing retention at Zendesk, spoke on the importance of “right-sizing” when having access to lots of customer data. “The goal is to try not to offer customers packages they don’t need,” he said. “Data should be used to improve customer experiences, not necessarily to sell more.”

The business impact of customer service

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