It’s time to get sophisticated with personalisation
As a mum of three, most of my shopping escapades – online and offline – are about the kids, so it was nice to see Amazon acknowledge this with personalised homepage recommendations including everything from Peppa Pig to Play-Doh.
Given that Amazon’s recommendation engine generates about 30% of its revenue, it’s not surprising that other retailers are scrambling to get their personalisation strategies right. But successful personalisation entails orchestration across multiple touchpoints. After all, the channel where a customer may be first exposed to your product isn’t necessarily the place they’ll buy it.
We know that the customer is no longer exclusively online or bricks-and-mortar. Gadget shoppers may be strolling the aisles of Best Denki, but they’re also on Lazada trying to snag a discount or free home delivery. Because of this, what is at stake is an opportunity to deliver pro-active and bespoke products and services to customers based on their habits and behaviours. Traditionally, this was done through sign up surveys, but as online and offline lines continue to blur, there’s an opportunity to link data to create a user profile and target people not only with what they want, but when they want it.
This is where the struggle begins for many retailers. Research from mobile marketing company Kahuna shows 85% of marketers feel their audience segments are too broad, and less than 10% think their strategies are “highly effective”.
Personalisation, like all marketing must-haves, can drive growth only when all the pieces of
the customer puzzle fit together. Done right, it can improve customers’ lives significantly – but miss the mark, and your consumers are gone.
Macro goals, micro metrics
The rationale for personalisation varies from retailer to retailer – whether it’s driving sales, improving marketing efficiencies or offering a unique customer experience.
Where to begin your personalisation journey will vary based on the problems you’re trying to solve. There are thousands of data tools and vendors out there, but the good news is you only need to focus on a small subset of that information. Web analytics, tag management, campaign tracking, targeting and re-targeting are some of the key tools to have in your arsenal. Whatever your goals are, it’s important to have a long-term view of things, rather than focusing on quick wins. For example, a leading luxury ecommerce retailer we worked with determined that when mobile is part of the path to purchase, conversions improved 2.8 times. When implemented in their marketing strategy, the company managed to double cross-device conversions and increased return on ad spend on search advertising by 50%.
If you are only tracking ‘clicks’ there is no way you can see what is affecting consumer behaviour. I urge clients to focus their personalisation efforts on three or four micro level metrics, and create actionable changes around those. Together, these micro conversions show a complete picture of the customer, from awareness right through to a sale.
Why are customers abandoning their carts? How much did I lose because people dropped off my page? What is my average order value? These are some of the metrics you can consider measuring when trying to capture potential customers that are bouncing between different channels. Even the smallest change across a couple of these can help brands make waves!
A word of caution
Don’t fall victim to knee-jerk reactions from your executive board or other stakeholders. Too often, companies undertake major overhauls without a good understanding of what they’re getting into. Just ask Target: when the U.S retailer decided to get savvy and plugged into its customer tracking technology, it inadvertently ended up exposing a teen girl’s pregnancy to her unamused father.
Retailers assume personalisation at scale will cost them millions in IT investments. However, the successful brands are those that start small and adopt a collaborative and fail-fast culture – Rather than trying to do too much at once, concentrate on incremental changes and testing. For example, brands trying to improve conversions could evaluate their messaging in creatives with what’s offered on the site or in-store. If there’s a mismatch in messaging, then test new creatives, try different offers, or even experiment with bundled offers.
Ultimately, it is these progressive brands that will succeed, while other retailers play catch up.
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