Formation.ai CEO reminds CX leaders not to forget about the once-a-year customer

Christian Selchau-Hansen says companies need to make more of their data to create experiences for a segment of one

From a brand’s point of view, the ideal customer experience is probably one in which people come often and spend often, but Formation.ai’s CEO foresees an economy where winning firms learn the art of attracting customers who may only purchase once a year.

Based in San Francisco and focused on the use of technologies like machine learning to offer 1:1 personalization in marketing, Formation.ai (or simply Formation) aims to help companies create a “segment of one.” This could reflect that in some categories — including furniture and  travel bookings — some buyers might have high intent but will only shop on a strict needs-based cadence.

Christian Selchau-Hansen, Formation CEO
Christian Selchau-Hansen, Formation.ai

“Most offers are mass offers,” Christian Selchau-Hansen, Formation’s co-founder and CEO, told 360 Magazine. “Companies will have created a few different segments, often based on demographics or frequency, but often by making assumptions, such as the idea that everyone who travels once a year is exactly the same.”

Formation helps customers, such as airlines, to dig deeper into their existing data with its Knowledge Engine to find details that create a customer experience around personalization. Even someone who flies out once a year, Selchau-Hansen pointed out, will have provided data on things like fare class, the hub they fly out of, whether they travel with family and how they paid.

“All of those different things have indications or aspects of relevance to a customer and could be ways to make that offer and the method by which it’s delivered more relevant,” he said.

Formation also offers a library of offer types to create better-performing promotions, which is especially important with more infrequent customers. Too often the norm, Selchau-Hansen admitted, is that someone makes a single purchase and is bombarded with messages weekly or even daily for the next 12 months.

“Part of the problems we’re seeing today are based on the tools that marketers have always had. The way they’ve tried to achieve relevance is through volume,” he said.

“You tend to focus on the one archetypes, rather than having being able to support multiple types of customer journeys.”

Given the impact of COVID-19 on travel, Formation’s services are particularly relevant to airlines, but Selchau-Hansen also sees opportunities to apply hyper-personalization in specialty retail, quick-service restaurants and the grocery sector.

The way people shop for food right now is changing, for example, where shoppers want to know if a particular store will have the essentials they want, if it’s safe and so on.

“It isn’t just about where you are right this second,” he said. “It’s also about where you could be, and how your needs and motivations can change over time — and being relevant when those needs change.”

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