75% of consumers say they like it when brands personalize the shopping experience, with 54% going as far as to say that they would consider ending their relationship with a retailer if they weren’t given tailored content and offers. Personalization, then, is clearly a consumer-led trend with a bright future. And with 94% of companies agreeing it “is critical to current and future success” brands seem to understand its importance. But they while they may want to heed the call, do they know how to do it well?
According to analyst firm Gartner, no, they do not. In a recent report they stated that “confusion abounds in the marketplace as to what constitutes personalization”- alarming, considering the potential this trend has to change the ecommerce world.
So, what is personalization? And how can it be applied to your PrestaShop store to make real and important long-term improvements to your business?
Personalization, at its most basic level, is the delivery of tailored content and experiences across every point of the customer journey. In other words, the right content, for the right person, at the right time.
When done right, a long-term strategy aimed at increasing customer lifetime value (CLTV) can yield increases in conversion, average order value, customer retention and overall revenue. The most sophisticated personalization solutions are automated, easy to setup, and simple to optimize and maintain. Despite their relative simplicity, they should be considered a long-term tool to improve your KPIs and customer satisfaction, not a quick fix. Why? Because at the very core personalization is about identifying and forming relationships between customer behavior and product details to be able to determine what a customer is will like and purchase. The more items and traffic your store has, the faster and stronger these relationships will be formed.
So, you have the traffic, the items and the desire to improve your KPIs. What now? Let’s look at the three levels of personalization and how, in real terms, they can be applied to the customer journey...
Tailoring the shopping journey according to crowd logic - for example, best sellers.
This type of personalization relies on the assumption that people follow a crowd mentality, led by societal norms, and reinforced by the approval of their peers. It includes the highlighting of ‘best-seller’ and ‘trending’ items, something done not only to give precedence to items most likely to convert, but also to reassure customers that their buying decisions are approved by general consensus.
Targeting individuals belonging to a larger group defined by shared traits- for example, demographic, geo-location or device type.
This can include simple changes, such as presetting your site’s language configuration for IP addresses from a certain country, or it may be a logic employed according to more complicated, automated, and algorithmic change. For example, automatically editing the content of an ad to contain a certain style of female clothing for a certain age of female audience. While this category of personalization isn’t truly individualized, it is targeted.
Tailoring the ecommerce experience to individual shoppers, and what purists would state to be the true meaning of personalization- for example, “Recommended for you”.
This can be done in real-time according to immediate behavioral changes or based on individualized customer profiles, built up over time using historical data. When profiling a customer, information may be collected across hundreds of data points from several sources, including location, onsite and offsite behavior, and interaction with emails. Information collected can include interests, context, and even where they are in the buying cycle.
Personalization is one trend that can be relevant at every part of the sales funnel - including customer acquisition, conversion, retention, and finally, delight. The following is an example of a truly personalized journey, an example of what would happen, were you to implement the most personalization strategies.
Personalization to drive qualified traffic to your store:
This primarily involves personalized product-level displays or social adverts. These can either be targeted at specific audiences or aimed at the individual through retargeting. In terms of effectiveness, personalized display ads have a CTR 10x higher than traditional display ads, with the average ROI of Nosto Personalized Facebook Ads clocking in at 36x.
Dealer de Coque set out to tempt new customers away from their Facebook conversation and to the online store by using personalized Facebook adverts to highlight real-time trending items. These ‘Best Seller’ product-level ads are automatically updated on a regular basis to show the most popular items in the store, and therefore represent items that are most likely to convert. Ads are populated based on real-time user behavior, as well as stock levels – meaning an out-of-stock product is never shown. The highlighting of real-time trending items in this type of prospecting ad has been shown to produce a 13x higher CTR.
Personalization to convert:
Automated onsite product recommendations that allow customers a smoother, quicker and tailored journey through your store.
According to Infosys, 86% of people say personalization plays a role in their buying decisions, with customers who clicked on personalization elements 125% more likely to buy.
Additionally, you may use pop-ups to deliver time-limited special offers, and one-time discount targeted according to behaviour or customer type. These type of pop-ups have seen a 55% average increase in conversion for first time visitors.
Planet Fitness needed a way to offer a highly personalized service while dealing with increased customer demand. With a wide selection of complementary products, it was also important that each customer be able to find exactly what they were looking for, while being exposed to the product range. Using on-site personalization, the company was able to deliver highly-targeted product recommendations based on the brands and categories their customers love, as well as individual shopping behavior. By delivering the most relevant customer experience to each visitor these type of recommendations have been shown to increase conversion by up tp 11%.
Personalization to retain customers & create promoters:
Dynamically tailor newsletter content to be unique to each recipient using dynamically editable copy or images, or by including product-level recommendations.
Personalization within emails has been shown to improve click-through rates by 14%.
Using personalized abandoned cart emails, My Little Square have been able to promote the right products, to the right audience, at the right time - allowing My Little Square to retain otherwise lost customers.
Email marketing that uses automated offers based on individual user behavior, rather from static product recommendations, has been shown to produce click-through rates 10x higher than the industry standard.
So there you have it: making the shopping experience easier, smoother, more personal and more enjoyable results in happier customers. And ultimately, happy customers buy more, more often and are more loyal. Personalization will help increase conversion rates, average order values and CLTV- which are key metrics that determine the success of your business.If you improve your customer's experience at every stage of the sales funnel, you will automatically improve the metrics associated with each of those stages.
To optimize the traffic you have on your site and enjoy the benefits of personalization start your 14-day trial with Nosto here.