What is Contextual Marketing and Why is Customer Context Important?

Marketing in the Digital Age has become more and more complex each year. Marketers need to manage many different channels and tactics across both digital and non-digital mediums. Despite this, the goal of marketing has remained the same: identifying target customers with a problem and connecting them to a solution.

Without understanding their current status or problem, being targeted in marketing becomes very difficult. This leads to irrelevant messages and unsuccessful campaigns that don’t resonate with audiences because they aren’t addressing the right concerns.

Imagine if your doctor offered you cough medicine when you’ve come in with an upset stomach. Again, it is a matter of relevance.

When we are able to inject customer context into marketing strategies, the resulting marketing efforts are much more aligned with what customers actually want.

Considering the sheer volume of marketing “noise” on the Internet (content, ads and other messages distributed by competing and non-competing entities), it feels impossible to get your marketing strategies work.

By enhancing your campaigns through customer context, you can cut through this noise and give customers the content and offers they want.

The Customer-Centric Approach

In order to survive in the current competitive marketing environment of the Digital Age, businesses need to adopt a customer-centric approach to their strategies.

This requires an acute understanding of the current behaviors and attitudes of customers. Then, leveraging that knowledge to put the consumer needs at the heart of all strategies and tactics.

The goal of customer-centricity is creating long-lasting relationships with customers through engaging experiences, thereby reducing churn and promoting greater customer lifetime value.

The Customer Experience Future

Customer experience is forecasted to take over as the key competitive differentiator by 2022, surpassing price and product. This creates a competitive landscape that is dominated by superior customer experiences.

Thus, it is essential for your business’ growth and sustainability to begin thinking about how you can make your customers feel more valued. It isn’t just about the products and services you deliver anymore.

The Power of a Superior CX

The good news is that this isn’t just about following the trends and adapting to the latest consumer behaviors. There’s real value to be gained from offering a superior customer experience!

By the numbers, here’s what a superior customer experience does to consumers:

• 86% of US consumers will spend more if the CX is better than average.
• 89% of these consumers reportedly switched to a competing brand because of a poor or lacking CX.
• 73% said one positive CX moment made them a loyal customer.

These statistics paint a very compelling image for adopting a customer-centric approach. Your customers will spend more and churn will decrease. Your customers may even be encouraged to tell others about their great experience.

It’s all about fostering valuable, long-term relationships, rather than one-off purchases.

What Does a Superior CX Look Like?

If those figures have you intrigued, your next question is likely regarding what a superior brand CX looks like.

Again, it’s all about putting the customer’s needs first. There are a few ways that these needs manifest themselves:

• Omnichannel: Your customers want to engage with your brand across all of their favorite channels and devices, without any disruption to the service or experience.
• High-quality service: The art of customer service is a known necessity for businesses. In terms of CX, this service needs to be fast, easy to access, competent and valuable to the customer.
• Empathy: Understanding where your customer is coming from and what challenges they are facing is a big part of CX.
• Belonging: Your customers want to participate in your brand. They want to feel that their contributions matter and see how their actions impact the business. They want to feel important and not just another number.
• X-Factor: Consumers are drawn to new things. There’s a certain secret sauce that goes with creating a great customer experience. It’s how your experience stands out from all the others.

Personalization

Another factor in delivering great customer experience is personalization. Again, your customer wants to feel like you know them. This creates those feelings of empathy and belonging, while also generating a high level of customer service.

Unlocking the power of personalized customer experience means tracking a single customer’s journey across all different channels and touchpoints and getting a full picture of who they are, what they want and how you can deliver the best possible service to those needs.

Using that information, you can develop unique experiences for each customer that cater to their individual needs.

How to Improve Customer Experience in Your Business?

Achieving a great customer experience means understanding and even predicting what each of your audience segments wants. Once you understand this, the roadmap to the right experience is easy. The difficult task is making these predictions accurately, without the assistance of a crystal ball.

Data is your friend.

The first step is to look at who your customers are. You can make general CX predictions based on audience segments and common behavior patterns. This may help you predict what level of service they’ll want, whether it is product support, loyalty incentives or otherwise.

After all, the journey doesn’t end when they make a purchase.

Becoming customer-centric means paying attention to every interaction between your brand and its customers. As you’re paying attention to these interactions, you may begin to notice pain points in your customer experience that you need to improve.

Ultimately, your goal is to understand what actions your customers are taking and why. This is known as the customer context.

What is Customer Context?

By definition, context is the ‘circumstances that form the setting.’ Thus, customer context is essentially all of the circumstances that “make” a customer.

These circumstances include customers:

• Needs
• Physical location
• Device
• Past interactions
• Age, gender, financial status, and other demographics
• Buyer persona
• Etc.

Anything that influences what that person wants is part of their customer context.

Customer Context Awareness

We understand what the customer context is, but now we need to know how to actually learn about our customers and their surroundings. We can call this context awareness: how much we know about, or are aware of, the context of our customers.

Achieving context-awareness requires a unique set of data. Rather than paying attention to big-picture dashboards and averages, we need to get much more granular and focus on individual customers and their personal journey.

This requires careful tracking over each touchpoint and pulling information from these different sources together to form a complete picture. It’s not easy and many businesses are still developing their best practices for customer journey mapping.

There’s also a concern about becoming overly aware of a customer’s context. Customers may be unaware of how much information about them you’ve managed to gather. When you start suggesting products based on information they deem personal (for example, a new baby in the family), it becomes intrusive.

Contextualization Leads to Personalization

When we understand customer intent and context, we can better address the unique needs and preferences of each individual customer and offer an experience to match that profile.

This is known as customer contextualization: the act of serving a customer an experience to match their context or setting.

Contextualization helps us create personalized experiences. The more we understand a customer’s context, the more personalized we can make their experience and content. The more context you have, the deeper the personalization.

When experiences are personalized, it helps achieve that superior CX because every piece of content is relevant and adds value to the customer’s journey, rather than detracting from it.

Using Contextualization to Steer Long-Term Strategies

One of the biggest challenges is recognizing when a customer’s context has changed, as this will alter how they want their experience to be personalized.

Again, it is a matter of tracking customers across each touchpoint and creating complete profiles of each individual. You don’t want a snapshot of a customer, but the whole story.

This allows you to better predict their intent and how their context will change. Once you have this deep level of understanding, you can devise long-term strategies using contextualization.

For example, instead of developing new products and then finding people to buy those items, you can use customer context to produce new products for your existing customers.

In short, contextualization yields a deeper understanding of your customers, both present and future, which can be used to gain insight into how to best approach them with marketing messages, products and other efforts.

Why is Customer Context Important?

Businesses lose hundreds of billions of dollars globally each year because of bad customer experiences. There’s a very high likelihood that your business too is, to some degree, losing money from poor CX.

To make matters even worse, when those customers cease being brand-loyal to your business, they head straight for a direct competitor.

And, they may publish their bad experience to the Internet, which can create a ripple effect that causes other customers or potential leads to turn away too.

Customer context is important because it leads to personalization and stronger customer experiences. Thus, you can become the company that customers run towards, instead of away from.

Pay Attention and Listen to Your Customers

As mentioned earlier, data is your friend when it comes to customer insights and uncovering the secrets behind delivering a better, personalized experience. Yet, a lot of businesses fail to use the best data source of all: the customer’s own mouth.

If you want your customers to feel like they belong and are an asset, not a sales number, asking their opinions and listening to their thoughts and ideas and even adapting them into your strategies can go a very, very long way.

You may be surprised by how much open feedback your customers are willing to offer. It’s because they want to be heard and understood.

They want their voice to matter.

Remember, it isn’t your job to tell the customer what they want. It’s the exact opposite! By asking customer opinions, you have direct insight into how to improve your contextualization.

A Better Customer Experience is Your Selling Point

One of the building blocks to any successful business or product is its USP: a unique selling point (also referred to as a unique sales proposition). This is how a brand or product manages to differentiate itself from similar offerings in the market.

Because CX is poised to become the competitive differentiator in 2022, even above pricing, it creates an opportunity for businesses to structure their USP around superior customer experience.

In other words, customers value service and experience so much in today’s world, that your product or pricing doesn’t need to be better than the competition, as long as your customer experience is superior.

Customer Experience is Dependent on Customer Context

You can’t offer the right CX without understanding your customers, and you can’t understand your customers without having context. This relationship to one another is practically built into their definitions!

Context leads to understanding what’s relevant to a customer. This relevance is an absolute must-have for any customer experience that wants to touch the threshold of superiority. If the experience isn’t relevant, it isn’t valuable.

Irrelevance not only detracts from the superior customer experience, but it also causes a negative financial impact. If you’re spending money on content, marketing tools, offers and other assets that aren’t relevant to your audience, then you’re wasting that money.

This is why personalization is such a key factor of CX; it ensures relevance.

If you want to raise your CX to the point that it can become a valuable selling point for your brand, then you need customer context. If you can’t understand what your customers want, then you can’t deliver an experience with any value.

Building Customer Context

We can’t overstress the importance of data when it comes to developing customer context. Every customer interaction with your company creates bread crumbs of data. Each tiny piece of the puzzle will produce an overall clearer image of context.

These interactions are critical learning opportunities where you can gain details into what a customer likes, dislikes, their desired price range, what brands/products they prefer, what days they like to shop, how frequent they shop, what incentive mechanisms work best, etc.

All of this information can help guide your decisions on how to improve the customer experience and increase your sales. But, you need to make decisions quickly, even in real-time as the customer is making a purchase.

Thus, you need an engine capable of analyzing four key streams of data:

1. The customer’s complete history – past transactions and interactions
2. The customer’s current actions – what they are buying or doing at that moment
3. The customer’s persona – influenced by both of the above
4. Overall customer trends – what other customers are doing and how this influences the individual

By working through all this data in real-time, you can accurately predict what offers, experiences and other strategies will work best with that individual.

Customer context is different for everyone and changes across audience segments. The more you can pay attention, the better your contextualization becomes.

Enhancing the Customer Journey with Customer Context

The customer journey is the path that each shopper takes, starting with their very first interaction with your business. Even something as simple as an ad impression can be the beginning of a customer’s journey, as it marks the first time they “see” your business.

It’s the first time they become aware of your brand and then all of the steps they take that lead to the first purchase, and then the second, third and so on.

Mapping a customer journey can be an arduous challenge in today’s multi-channel environment. Even harder is predicting the next steps in that journey. But, when done right, you can deliver the journey that your customers dream of.

The customer context creates the opportunity to do just that. You can stay one step ahead of the customer and meet each emerging need immediately and correctly.

Customer Recognition

Everyone has that restaurant or business they love going to because the staff knows their name and makes them feel welcomed. It’s easy to do this in-person, but much, much harder online.

Your customers are moving from touchpoint to touchpoint. In a span of a single minute, they may interact through with your newsletter, move to your site, then to your Facebook Page and back to your site.

It’s hard to recognize them at each step.

But, recognition goes beyond just remembering a name. It’s also remembering the buyer persona and context of that customer.

Let’s assume that our touchpoint-hopping customer from above saw a product in the newsletter that made them want to visit your site for more information. Then, they shifted to Facebook to find sentiments from other customers about the product. Satisfied, they return to your site again to make the purchase.

Now, picture the same journey, but we recognize what the customer is after at each touchpoint. As they visit the site each time, we immediately suggest the product they’re interested in. “Hey Jane, looking for this?” It saves them time and makes them feel welcomed.

Suggestive Selling

One of the ways that businesses are generating powerful returns using customer context and personalization is through suggestive selling.

When you understand a customer’s context, you are better equipped to suggest other value added items at the time of purchase and beyond. This is not a new tactic. Upselling has been around for decades, but it was limited by only a brief glimpse into each customer’s context.

For example, when a customer buys a new pair of shoes, we gain a small amount of context. You can use this context to upsell with complementary products: a bottle of polish, extra laces, etc.

It’s a good start, but we can do much better today. Thanks to the Internet and the Digital Age, we have more access to customers than ever before, which means more insight into their context.

Suggestive selling is becoming more sophisticated, especially in recommending products long after a purchase has been made. Imagine if we could predict when that customer’s new shoes are going to need replacement? Or, know about an event in their life that would require a special pair of shoes.

Retail businesses are already shifting towards suggestive selling through customer context. According to an article looking at the impacts of real-time retail:

• In three years, almost 300% more businesses will be using past purchases to influence suggestive selling strategies
• 361% more retail businesses are looking forward to utilizing location-specific promotions and targeting in the next five years.

Personalized Emails

Email marketing is one of the more seasoned digital marketing strategies and it isn’t going away any time soon. That said, today’s consumers have a higher level of scrutiny when it comes to their email. Over half of all emails sent are marked for spam.

The problem, once again, is noise. A single customer’s inbox could be receiving offers from a hundred different businesses, at multiple times throughout the day. It can be very hard to have your newsletter stand out, especially with only a character-restricted subject line.

If you’re still sending a generic email blast out to all of your customers, you’re effectively becoming an email marketing dinosaur. Those days are gone.

Now, companies need to leverage customer context to create personalized emails that include the offers and products relevant to each customer. Not only do these emails have a stronger chance of being noticed, opened and utilized, but you’ll keep your business email out of the spam box!

Conclusions:

Gone are the days where companies could rely solely on their products and pricing to gain a competitive edge. Businesses need to be more agile than ever before, particularly in how they approach the customer experience.

With more options available to customers than ever before, consumers are increasingly choosing businesses and brands that offer the best experience.

Customer context helps businesses deliver a superior experience. Yet, it is always changing.

Every new interaction that a customer has with your business reflects the latest changes in their attitude and adds to your growing understanding of their persona and context.

Dedication and commitment to customer service are the two keys to how to improve customer contextualization, personalization, and experience. You always want to keep the customer at the heart of the process and pay keen attention to their needs.