During the pandemic, customer retention has become the motivation behind website personalisation strategies for many companies.
E-commerce is obviously leading the way. 74% of e-commerce leaders say their company has a website personalisation strategy in place now.
Retention is the primary motivator for companies to increase personalisation, and retention rates have now become a bigger priority for e-commerce than conversion rates, order size or engagement.
Besides the 5 major trends reshaping e-commerce, personalisation is more of a necessity now than ever before.
There’s a range of benefits you gain from personalisation.
In a survey of more than 400 digital marketers, loyalty was the most commonly cited improvement. Not far behind were improvements in revenue and efficiency of marketing spend.
Some have even enjoyed improvements in cost-of-acquisition, conversion rates and profit margins.
And what’s more, respondents indicated tangible ROI from personalisation: 9 in 10 reported returns of at least $1-2 per dollar spent, including 43% who received at least $6 in return per dollar spent. Almost 1 in 10 (9%) indicated an impressive ROI of 20x or more.
The most common forms of personalisation used today.
You can use various forms of data to accomplish personalisation. The most common way is to use real-time behaviour data, individual user data, cookie-based historical data and data from other channels.
Then there are segmentation methods where real-time behavioural decisions and static segments are the most popular (I’ve personally used these methods and often speak to their effectiveness), closely followed by dynamic segments and AI-driven predictive segments.
Email and websites have long been the first channels to be personalised.
Websites are currently the primary channel for personalisation – and with good reason; research from Monetate shows that conversion rates increase dramatically with the number of personalised page views on e-commerce sites.
Email personalisation is also standard practice in personalised marketing, with display ads and mobile apps starting to catch up now.
An insufficient budget is a common obstacle for marketers who want to improve personalisation, and many are now maintaining or increasing their personalisation budgets over the next 5 years. And 1 in 5 expects substantial increases to budgets. (More on this later.)
Currently, one-third of organisations are spending more than 50% of their digital marketing budget on personalisation.
Privacy and personalised advertising.
With the third-party cookies on the way out, Google moves closer to the solution everyone is hoping for – that includes new privacy-friendly methods of audience targeting.
Changing the tone and content of ads is an important step.
Because advertising as if nothing were different is deemed inappropriate in the current climate. Yet brands need to maintain interest in their products, right?
The new messaging needs to be aligned and personalised on the landing or product page the digital ad directs the user to.
From a data and privacy perspective, it’s vital that you offer extra transparency and strict adherence to regulations and best practices.
AB Tasty has released a new whitepaper offering personalisation principles to help guide brands through this next period of uncertainty. You can get it here for free.
The key takeaways of the whitepaper are:
- Provide a personal touch in an impersonal environment because consumers find messaging that is truly relevant to them more appealing.
- Model a strategy around a ‘WishList’ mentality as consumers are making a mental note of purchases browsed online for when the skies begin to clear.
- Take your customers by the hand and lead them through the buyer journey.
- Experiment to ensure that your personalisation efforts are creating better customer experiences and the uplift you’re aiming for.
In B2B marketing, personalisation is effective when it directly speaks to the specific needs of an audience.
Nearly 70% of B2B buyers say that easy-to-consume informational content sets the winning vendors apart in a Demand Gen Report.
61% also said that winning vendors provide buyers with high-quality content to support the buyers during the journey.
However, research has shown that B2B buyers say companies often provide too much material that is either useless or lacks substance.
One of the problems is that marketers spend too much time creating content that prioritises their own sales or promotional messages over their customers’ informational needs.
This underscores the importance of really understanding your customer.
What are their goals, and what pain points are standing in the way of them making a purchase decision? Where do they consume content?
Taking the time to identify what makes customers tick makes it far simpler to produce targeted, highly relevant content that speaks to them directly, as well as ensures they’ll receive it when they need it.
Producing content is already a challenge, but personalisation can add another layer of complexity.
Consider what information your clients and customers need to further the sale, so you don’t get bogged down creating content that doesn’t help them along the journey.
The demise of third-party cookies, heightened consumer sensitivity to messaging, and a tightening of marketing budgets have all restricted personalisation opportunities, according to Gartner.
Due to this, you need to rethink your personalisation tactics to better negotiate the current recessionary environment.
Make your personalisation strategic.
Two in three consumers expect brands to recognise them as an individual.
For a truly tailored customer experience, you can’t just adapt the website and call it a day. For personalisation to be truly effective, it must be omnichannel.
Customer retention and acquisition depend on your ability to deliver a personalised experience both online and offline.
In retail, omnichannel customers spend 4% more in-store and 10% more online compared to single-channel shoppers, says an HBR study.
In today’s hybrid landscape, touchpoints can exist across multiple channels and channels can provide multiple touchpoints.
To effectively engage customers in this climate requires you to perfect each interaction. Here’s a look at three strategies for doing so at scale.
Does starting with personalisation feel daunting?
Start with a simple strategy that outlines what you’re trying to achieve and implement it in stages as your team learns and grows.
Begin by outlining how and when you’re going to deliver and what data you’ll use to inform your tactics.
Your first attempt doesn’t need to involve complicated contact strategies or large-scale enterprise solutions. You have to learn how to walk before you can run, right?
- Crawl – with a little bit of effort and relatively low cost you can still deliver good results. Get started by using basic user information, like geolocation, to serve up appropriate content – this could be based on anything from local services to the weather information or regional sports teams.
- Walk – this requires more content and data but delivers a higher impact. Use the information you know about visitors from their previous visit to improve their next one – like personalising their landing experience based on the content they viewed last time.
- Run – with more time and a higher level of complexity you can deliver high impact personalisation by putting everything you know about a visitor together to communicate with them across all your channels.
When you keep adding complexity into your plan – as you become more confident in the kind of personalisation best suited to your customers – you’ll also deliver a constantly improving visitor experience that will keep your customers coming back for more.
And then the reality check…
In Gartner’s 2020 CMO Spend Survey, only 14% of respondents reported personalisation and testing among the top-three capabilities they see as vital to supporting the marketing strategy.
This low level of prioritisation suggests marketers are ill-prepared to capitalise on personalisation.
As a result, Gartner predicts that one-third of marketers will reduce spending on personalisation as a line item in the marketing budget by 2021.
To best leverage your immediately available first-party data sources, forget personalising across the widest range of data sets.
Instead focus on improving customer experience across your website, apps and email in order to capitalise on an expanding digital audience.
With cuts in acquisition budgets, it makes more sense now than ever to re-engage existing shoppers.
Encouraging loyal customers to purchase is more cost-effective than attracting new ones. But it does mean that you need to provide a tailored experience to your shoppers.
Don’t expect your customers to re-purchase simply because they’ve done so in the past.
Having web and email content primed for their individual preferences and behaviours is vital if you want to convert them from chance buyers to regulars.
The experience counts more than ever when consumers are cautious with spending.
Move quickly to get products they buy regularly in front of them and make it easy for them to find the items they’ll be most interested in.
With customers now more likely to comparison-shop in order to find the best deal, the goal is to make their experience as seamless and convenient as possible.
I’ll leave you with a case study from one of the best in personalisation: Zalando.
With more than 400,000 product choices and almost 2,000 brands, and in a market dominated by mobile, Zalando has built its business on personalisation, smooth payment and customer service, and easy returns.
They consider it essential to their business that each of their 27 million customers gets an individual user experience.
“We aim to be our customers’ fashion companion, advising and inspiring them at the same time. We want to grow our customer’s fashion confidence starting from their personal fashion comfort zone, enriching it with several exciting excursions to explore new trends, brands, and products,” says Melissa Weston, Zalando Marketing Lead UK & Ireland.
Zalando was founded in 2008 and has grown from an online shoe shop to an online fashion platform, with 2018 revenue of €5.388 billion across its 17 European markets.
Their platform approach and investment in infrastructure has made them known as much as a tech company as a fashion retailer.