The Cocktail Party Effect and it´s Value for CX

The theory

Almost 70% of brands surveyed in a recent Everstring report rate personalizing the customer experience as a top priority. The financial returns of personalization are evident: True personalization does more than increase purchases. It gets people to add items to their cart more often and drives down cart abandonment rates. Furthermore, when it comes to long-term customer value: Personalization seems to be an important driver of customer loyalty.

Changing perspectives, customers crave personalization themselves: Infosys reveals that 31% of customers wish for their experiences to be far more personalized. The reason for this lies in a psychological principle called the Cocktail Party Effect.

In short, it describes how people filter and focus on relevant information. One trigger for paying attention is when people hear their names. For companies, this indicates: Make it personal and get attention. But be aware, true personalization is more than just getting your customer's first name right

The example

EasyJet provides us with a nice example of how to put the Cocktail Party Effect in action. They made their 20 years anniversary all about the customer and his/her personal history with EasyJet.

Summing it up

Get specific:

  • Know your customer`s name

  • Know your customer`s purchase history

  • Know what your customer wants (base your recommendations on their past purchases)

Get your data right:

  • You cannot personalize what you don’t know

  • Make sure the state of your data is flawless