The Impact of Mass-Personalization on CRM

March 27, 2024 - 11 minutes read

How customer relationship management and mass-personalization go hand in hand.

A team of business professionals

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In pre-industrial times, marketing and manufacturing processes were always personalized. A face-to-face conversation between a craftsman and their patron would lead to a custom-built product days later. In the early 1900s, mass production, as personified by the US auto industry, was accompanied by mass media advertising and that personal touch faded. Market segmentation began to divide customers into logical groups by the 1950’s, but the introduction of mass-personalization has now taken us full circle. 

Customer relationship management (CRM) applications that capture customer history and feedback support mass-personalization approaches to marketing and production that leverage advanced predictive analytics.

“Personalization is when you go into a bar and sit down, and the bartender puts a whiskey in front of you without having to ask what you want.” Jeff Bezos

What is mass-personalization?

Mass-personalization is a strategy used to tailor content, services, or products to individual needs and preferences by leveraging customer data collected over time. Machine learning and artificial intelligence help to analyze customer data and behavior so that personalized offerings can be presented in real-time. Well-known examples of mass-personalization include:

  • Email marketing: When customers sign up for business email distribution lists, they often provide details on their interests and preferences that are later distilled into personalized email messages the recipients are more likely to read.

  • Targeted advertising: This basic form of mass-personalization becomes apparent when online advertisements based on topics you recently searched for suddenly appear within websites you visit shortly thereafter.

  • Mass-personalized products: Rather than asking customers to choose from a list of options and add-ons, mass-personalized design and manufacturing processes present ready-made product offerings specifically catered to customer preferences.

The impact of mass-personalization on CRM

Customer relationship management (CRM) is a business strategy that utilizes sales, order fulfillment, customer service, and digital marketing data sets to manage customer interactions and relationships. CRM software has become an essential tool for customer service, sales, and marketing teams throughout the customer lifecycle. CRM is used in conjunction with inventory management software to improve forecasting, track order status, and establish dynamic pricing strategies.

CRM data has also become an important marketing resource as new campaigns rely on comprehensive customer profiles. The advent of mass-personalization has impacted CRM by shifting the focus from data collection and customer management to hyper-personalized offerings and experiences.

1. The customer data trade-off    

Two keys to mass-personalization success are accurate data and the ability to interpret and leverage the data. Despite the common perception of customers vigorously protecting their anonymity, 90% of consumers are happy to share some data in exchange for personalized products or customer service experiences. This signals a recognition by many that voluntary, selective sharing of information might improve their shopping experience. 

Customer relationship management platforms capture insightful data on purchases, returns, complaints, and feedback that can paint a detailed portrait of expected customer behavior. This information is provided willingly as part of everyday shopping, quotation, and return processes, with the implicit understanding that the information will not be shared, misused, or sold by the proprietor.

A screenshot of a data dashboard

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2. Addressing customer privacy concerns

Repeat buyers appreciate the customer service benefits of CRM, especially when their loyalty is rewarded with discounts, expedited service, and individual attention. Most customers also understand how historical data can become a source of preferred leads for sales teams or targeted marketing campaigns.

Customers also expect their privacy to be protected when information is exchanged. 

Mass-personalization can be counterproductive when customers believe their data is used unfairly or shared without their consent. Most E-commerce patrons are comfortable sharing basic information like their city of residence or age group, but mass-personalization campaigns that leverage browsing history or sensitive personal details lower the comfort level of potential customers.

Privacy means people know what they’re signing up for, in plain language, and repeatedly. I believe people are smart. Some people want to share more than other people do. Ask them.” Steve Jobs

3. Segmentation and filtering

Cloud-based CRM platforms are capable of pooling and sharing customer information between teams and sites to facilitate behavioral analysis and the review of overall sales order trends and patterns. Market segmentation that is used to establish logical customer groupings stops short of personalization at the individual level, but it’s still a proven way to direct the right content to customers and minimize wasted effort. Segmented marketing strategies might include:

  • Personalized messages and content
  • Targeted promotions and specials
  • Detailed customer personas

The filtering capabilities of CRM software are useful for identifying customer sub-groups based on demographics and preferences so a common message that is more likely to resonate can be presented. CRM filtering is also helpful for identifying shifts in market trends that allow future product offerings to align with demand.

4. Custom CRM fields   

Customizable fields have always been a valuable feature of CRM software. Additional information on customer preferences and product suggestions, as well as feedback on service, delivery, and pricing are captured seamlessly when the CRM platform can be customized based on the nature of the business and customer interactions.

Artificial intelligence (AI) and machine learning (ML) tools can turn this additional data into more effective mass-personalization strategies by analyzing the information and identifying patterns and insights that feed into micro-segmentation at the personal level. These advanced technologies also make it easier to automate the delivery of personalized messages. 

5. Mass-personalization vs mass-customization

Mass-personalization in manufacturing and product development utilizes customer data and feedback to proactively create products ideally suited to each customer’s wants and needs. The similar concept of mass-customization is based on products pre-assembled to near completion based on predictive analytics.

Mass-customization allows customers to select from a wide array of product options, without the hindrance of long delivery cycles that once made such elevated levels of product customization uneconomical.

6. Deploying the right software

CRM tools help businesses streamline operations and improve customer relationships. By continually monitoring the sales pipeline and customer journey, sales teams can improve their conversion rates while customer support teams benefit from updated contact lists and easily accessible history. Important considerations when selecting CRM software platform include:  

  • Reporting capabilities and dashboards
  • Availability of mobile device apps
  • Compatibility with inventory management and other platforms
  • Automated Email generation capabilities
  • GDPR compliance to protect customer privacy

Selecting the CRM software that best suits the needs of your customers and internal teams equates to optimizing visibility, ease of use, flexibility, and data accessibility. These attributes are also compatible with mass-personalization strategies that harness relevant data to create new sales and product introduction opportunities.

Pitfalls of mass-personalization

The key to personalization is people. Computer technology and AI are useful when performing predictive analytics and creating customized messaging and products, but ignoring the human element of CRM can undermine the benefits. Responsive customer service agents, personal relationships, and empathy are among the human traits customers value most even as salespeople and agents bolster their knowledge, insight, and performance through CRM. Other potential pitfalls of mass-personalization include: 

  • Overstepping privacy boundaries
  • Alienating customers with overly personal messages
  • Straining supply chains by creating too many options
  • Over-reliance on computer and software tools

Balancing technology with human oversight, judgment, and customer interaction is a sound strategy for keeping mass-personalization in perspective and preserving the unique culture and attributes associated with your brand.

The impact of mass-personalization: Final thoughts

With voluminous data collected and stored by customer relationship management databases over the past four decades, CRM inevitably became a focus area for data-centric mass-personalization practices. CRM and mass-personalization are most valuable when the fundamental objectives of enhanced customer service, responsiveness, and long-term customer relationships are valued above all else.

Our full-featured CRM solution is an important part of the integrated, cloud-based Agiliron product suite, which also features inventory management, warehouse management, retail point of sale (POS), and marketplace intelligence solutions that integrate seamlessly with all leading E-commerce platforms. You can simplify your business by managing all your inventory, orders, and customers from one system.

Mass-personalization and CRM are ideal counterparts, but the benefits of CRM go well beyond sales and marketing strategies. Our solution experts can help you select the tools that benefit your organization and bottom line without alienating customers or forgoing valuable opportunities. Contact us today to discover how inventory management software and customer relationship management tools can elevate your business.

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