No. 01 EGMENTATION S NOT ERSONALI ON T

Transcription

1 No. 01 EGMENTATION S NOT ERSONALI ON T

2 For too long, marketers have been applying older marketing practices to new digital customer experiences. Brands are missing tremendous opportunities to foster engaging customer experiences, avoid tarnishing their image, and create distinct competitive advantages. Aligning digital marketing efforts in a way that focuses on Personalization rather than Segmentation is a key example of an opportunity that many marketers are neglecting. 3

3 What s the difference between Personalization and Segmentation? Quite simply, segmentation helps a product find a broad set of potential customers. Personalization helps a customer find the products they are looking for. Confuse the two, and your marketing will suffer as both customer and brand grope in the dark for something both need, but neither can find. In the broadest possible terms, segmentation is a well placed billboard. It s a purely outbound transmission. It may be targeted to a certain demographic based on its location and message, but at the end of the day, it is speaking to a mass of people driving by. In no way can a billboard engage at the individual level. How relevant is this approach when engagement extends beyond the billboard and to a market of one? Not very. 5

4 What s the solution? Personalization is the conduit marketers need to facilitate meaningful engagement between digital consumer and brand. When an individual customer engages with a website, he or she is sharing information about their activity with each scroll, click, and search. Not only is the volume of data that s constantly exchanged with every digital interaction massive, the sheer concept of what should be done with it is weighty. Marketers have a responsibility to take advantage of the newfound information customers are continuously sharing as they engage with a brand online, and provide an intuitive experience that benefits both sides. Too many believe they are doing something new in their digital efforts, when in reality they re just reverting to yesterday s segmentation methodologies. Rather than personalization, they are putting lipstick on the segmentation pig. The result is false personalization. False Personalization When it misses the mark, personalization feels false. Customers know when generalized content is being forced down their throats using segmentation. Product centric messaging is an example we re all too familiar with: Customers who viewed this also viewed This suggestion is not about the customer, it is about the product. A bachelor happened to just buy a vacuum cleaner online. This does not mean he ll next want to order Steel Magnolias on Blu Ray. It s all too obvious and disappointing when messages are based on segment based aszsumptions. Today s digital consumer has high expectations much of which is enabled by advanced search engines and predictive operating systems, which are subtly training consumers to expect more individualized experiences. Patience for dated and overly obvious segmentation techniques is severely waning. Revenue and brand reputation are at stake. 7

5 True Personalization Rather than focusing on generic correlations Personalization sheds light on what is or overly broad associations, true relevant to the customer based not only personalization begins with taking note on what he or she has told us in the past, of everything including every click, every but also they are telling us right now. Every add to cart, and every purchase, along with search query, click, product view, and all the attributes associated with each customization choice signals a great deal that the individual customer shares as they about a specific person s preferences engage with a brand online. The next step oftentimes these are preferences they don t is continuously learning about the customer even know they have themselves. and delivering an experience that responds directly to his or her intrinsic interests and immediate needs with each returned visit. By capturing real time customer data, it is possible to begin illustrating an accurate sketch of a customer s needs from a single Over time, this experience becomes smarter visit. You can infer quite a bit about them, and more intuitive. The customer feels like making predictions about their gender, their online engagement with a brand is preferences and other details. When natural, pain free, and even special. everything is combined to form a bigger picture over the course of multiple visits, a customer s activity leads us to better understand his or her intrinsic interests and purchasing behavior. 9

6 By combining individualized historical data with real time relevancy, we can better anticipate immediate needs. For example, a woman has just purchased a winter parka. Rather than take up screen real estate by showing her an extensive list of all the winter parkas she didn t just buy, she would be better served by seeing relevant product recommendations based on her unique, personal scenario. Based on her purchase experience and preferences, this could be a pair of green gloves, a scarf, or even winter boots. A nuanced example: A man purchases a single children s book and has had it shipped to an address other than his own. In a non-personalized, product centric environment, he will be inundated with Harry Potter books during the next six weeks. In a personalized environment that combines real time and historical data, the children s book purchase is recognized as an anomaly. Unless his behavior indicates a developing interest in the product category, he will not be force fed irrelevant content. Overt attempts to sell something based on the most recent purchase is a practice that s immediately recognized by consumers. A personalized environment is subtler and simply feels right. 11

7 13% TO 46% Impacts of Personalization on Business So how effective is personalization? Effective enough for analysts to recognize industry-wide double digit ROI. According to Gartner 1, by 2018, organizations that have fully invested in all types of online personalization will outsell companies that have not by more than 30%. The idea of digital personalization has finally come to tangible fruition and the business results are equally real. We can attest to this at Reflektion, where a typical revenue lift realized by brands implementing personalization is anywhere from 13-46%. A concrete example: after deploying an online personalization platform, Reflektion s client O Neill Clothing saw 85% more engagement, a 17% increase in average order size, and a 26% jump in their conversion rate. 1 The Gartner E-Commerce Vendor Guide, 06 December 2013: 13

8 About Reflektion We re witnessing an evolution of the customercentric retailer model where customer engagement is happening at every point of sale. A truly personalized experience offers relevancy to the nth degree. As a result, consumers see more items that they prefer. In turn, they spend more time engaging with the brand online and they return more often. This eventually translates into more items added to each cart, higher average order value and increased conversion rates. The additional revenue and higher return is a distinct competitive advantage that can be reinvested in new customer acquisitions. These new customers will be highly engaged with your brand, and your competition will soon start to seem like a tedious, unintuitive relic. The Reflektion platform allows retailers to learn about every digital visitor, respond uniquely to each individual in real time, and convert shoppers into buyers. Reflektion provides customer-centric analytics and a comprehensive set of digital commerce and marketing solutions. These solutions create true 1 to 1 shopping experiences across all devices, making it quick and easy for retailers to treat each shopper as an individual. It s a major departure from yesterday s approach, which depended on overly broad segments and rules. Retailers and brands working with Reflektion are transforming the relationships they have with each of their shoppers, which creates greater engagement, higher conversion rates and increased revenues sales@reflektion.com 15

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