A Short Guide to Personalisation

One of the key trends in digital commerce now and in next years will be personalisation. Shopping experiences in B2C, B2B and D2C are increasingly becoming more personalised as retailers and manufacturers have access to more and more data about their customers. We already live in a very personalised world and consume content we don’t even necessarily think of as customized such as our Facebook feeds, Netflix and Spotify, and online marketplaces such as Amazon.

Why personalisation matters for business?

Cross-channel consumers expect relevance when they come to your site. Nearly nine in ten consumers say that personalisation has some impact on their purchasing decisions. And that’s just the tip of the personalisation payoff iceberg. According to a survey 59% of online shoppers believe that it is easier to find more interesting products on a personalised online retail store and 45% are more likely to shop on a site that offers personalised recommendations. What is noteworthy is that people will share personal information if it improves their online experience - but it might make sense to be open about it as it increases the trust felt for companies by 77%.

Although the numbers show that personalisation is what the customers expect and want, it is important to pay attention to how you gather the data. Implications to your brand can be more harmful than profitable if you don’t consider the value exchange: Is what you’re offering compelling enough for your customers to share their personal data? Does your customer journey emit trust? Do your actions align with your brand’s values?

Personalisation in action

Personalisation can be things like finding ways to address consumers on topics you know interests them and creating both functional and personal customized customers experiences. The functionality comes from finding and ranking potential customers, whereas the personal aspect is more about influencing customers and driving them towards purchase decisions. Sometimes eerily so, like when Target was in headlines a few years back when they predicted a teenage girl’s pregnancy before her father knew it.

Personalisation -- is really just an extension of A/B testing and normal optimization activities. – Hudson Arnold

Personalisation efforts can be added to almost all stages on the customer journey starting from new customer acquisition marketing all the way to customer loyalty programs. What’s great about personalisation, is that as it is data-driven it is easy to A/B test and analyze, and thus find out the best practices for your digital sales. The results come quick and in most cases in abundance. Take for instance Crew Clothing Company who started to use segmented emails instead of mass emails. After the new tactics their active customers increased by 20%, open rates rose by 75% and lapsed users fell by 25%.

But don’t stop your personalisation efforts at conversion! A lot can be done after the customer relationship has become established. One of the key ways to use personalisation is loyalty programs, which are basically your free pass to direct marketing. They are a great way to gather individual level data of your customers such as shopping history, lifetime spend, shopping preferences and browsing history. Combine it from all possible sources and create continuously updated consumer profiles based on the individual’s actions. One of the most successful stories in recent history has been Starbucks’ Starbucks Rewards which held a year ago $1.2 billion in customer funds.

Pitfalls in Personalisation

For many consumers personalisation might feel like an intrusion of privacy if it’s done wrong. It’s been reported that pregnant women will use more coupons if they are bundled with lawnmowers rather than other baby goods, because of more subtle targeting. Companies should aim to be clear about terms and conditions and give their customers options to modify the extent of personalised marketing or opt out - and make sure they are not breaking any data privacy laws.

When starting personalisation efforts, start small. Don’t treat segmentation and targeting as a strategy shift, rather implement the elements that fit into your current strategy one by one. Your greatest asset in personalisation is data, which you should own. Watch out for partner-driven models, where your ownership is not clearly stated. And last, but definitely not least: Make sure your data is high quality - otherwise you might just as well be tossing a coin.

The ocean of personalisation is vast and is mostly untraveled. But before you get busy with personalising your marketing and sales funnels, make sure you know your audience segments and that you have dedicated resources to start testing your hypothesis, which is what personalisation is before validated through data, a hypothesis. To get most out of personalisation, do set a process in place for gathering customer insight and validating results.