The Importance of Personalization and Why it’s the Future of Marketing

The best shopping experience is a personalized so lets break down the importance of personalization and why it’s the future of marketing.

What is the one single action your business could do to 5x your results?

Maybe it’s using puppies on drones for enhanced customer service.

via GIPHY

But, we would argue it’s something less cute but more scalable. It’s building a personalized experience.

According to a study by Cloud IQ, 69% of consumers want an individualized experience. And, if their dealings with a brand are below their expectations when it comes to personalization, 41% will take their business elsewhere. 

If you’re not personalizing the shopping experience, you’re missing out.

Pssst! We’re creating a Shopify app than leverages the power of personalization at an unprecedented level. Get notified when our Simple Targeting app is available for testing.

And, we don’t want you to miss out. Which is why we’ve put together this post, looking at why personalization is so important and showing you ways to tailor your own website and marketing campaigns for the benefit of the individual.

But first, what does personalization bring to the table?

The Benefits of Personalization

To say that personalization is beneficial to your e-commerce company is underselling it a bit. What was once an optional addition to a website and marketing campaign, has become essential.

It’s the difference (as we touched on at the top) between making sales and losing them.

Personalization online is much the same as it is offline. It’s that warm smile and offer to help when you walk into a store, or a store assistant remembering your name the next time they see you. It’s the things that make you feel good and strengthen the emotional connection you have to a store.

When customer interactions are personalized, business thrives.

• 48% of consumers spend more money when their experience is personalized. [Target Marketing]
• Companies that use personalization see conversion rates improve by 93%. [Econsultancy]
• 80% of consumers like to receive emails with recommended products. [Internet Retailer]
• 59% of consumers say that personalization significantly influenced what they purchased. [Infosys]
• 50% of all consumers are more likely to use a retailer again if they were presented with personalized offers. [Smart Focus]

The statistics make the benefits clear; tailor the shopping experience to the individual and they’ll give you the two things you want most – their money and their loyalty.

How choice has changed the e-commerce landscape

Personalization is critical to the future of an e-commerce business in a way that it’s never been before.

Why?

Because of choice.

In 1995, there were 23,500 websites. In 2018, there are 1.8 BILLION. The choice wasn’t there back then. Early adopters held all the cards. And, with little in the way of competition, there was no need to personalize. To use Oatmeal’s Asian food example, 1995 was a small town. 2018 is a big city.

Also, the technology then wasn’t anywhere near what it is now. Back in the ’90s and early 2000s, nobody expected a personalized shopping experience. Today, we’ve become accustomed to it with tailored news feeds, shopping recommendations, and social media accounts that show us what we want to see.

Consumers now no longer have to stick to a specific brand. If their needs aren’t being served, there are a dozen other companies selling similar products that they can go to.

eBay not working out for you? Amazon will probably stock what you’re looking for, or Etsy or Rakuten or AliExpress. Another option is only a Google search away.

Consumers are more informed than ever. According to BIA/Kelsey, 97% of consumers turn to a search engine when buying a product. Another study shows that 97% of consumers read online reviews before purchasing.

So, to have a customer choose you after having conducted research and with the choice available to them is a BIG DEAL. And when you’ve got them, you should do everything in your power to keep them because acquiring a new customer is anywhere from five to 25 times more expensive than retaining the ones that you have.

And how do you keep them loyal? By providing them with a service that is personalized to what that they like and are interested in.

Personalization the Amazon Way

Before the so-called ‘infinite shelf’ came into being, Amazon was already the biggest e-commerce website on the internet. Too big and too well-known to have to bother with personalization, you might think? On the contrary, Amazon has used personalization to strengthen and retain their customers.

It’s also put pressure on every other e-commerce website to step up and do the same. Because Amazon is the master of personalized experience.

Visit Amazon’s homepage as a customer and you’ll be instantly greeted with a ‘Hello’ in the menu bar. Further down the page, you’ll be shown a selection of ‘top links’ and things it thinks you’ll enjoy based on your browsing and purchase history. Continue scrolling and you’ll see that the entire page is tailored to you, with recommended products and ‘inspired by’ suggestions.

source: Slideshare, Vinay Mohanty

But, Amazon’s personalization doesn’t stop at its website. The company’s entire service works around making things better and easier for customers. Its Prime membership service offers free shipping, same day delivery, rewards points, and entertainment on-demand. The latter of which recommends shows and movies based on the things you like to watch.

Its Kindle e-readers and Kindle Fire tablets also serve up recommended books and entertainment that can be purchased or watched directly from your device.

All of that from a single Amazon account. 

But wait, there’s more!

Amazon Alexa is a voice service to play music, make calls, set alarms and timers, ask questions, manage shopping lists, call an Uber, order a pizza, and control smart home devices. All you need to do is say the word.

It’s not just improving the shopping experience of customers, it’s improving their lives.

This is the level of personalization you need to be aiming for – giving your customers everything they need so that they never feel the need to take their business elsewhere.

How to personalize your own customer experience

Okay, we’ve talked enough about the importance of personalization in e-commerce and the benefits of tailoring the experience to suit the individual. But how can you make it work for your own business?

Here are six tips:

1. Create a growth plan

What does personalization have to do with growth? Personalization is growth. The more you tailor your service to the needs of your customers, the more they’ll spend and the more they’ll talk up your store to friends and family.

A growth plan where personalization is concerned should be built around how you plan to implement features and change aspects of your business to offer a more individualized service.

If you’ve never done a growth plan before, download our free growth plan outline. This will help you get a thorough plan in place for how you’re going to approach marketing moving forward.

If you already have a plan in place, you might be rolling your eyes right now at the thought of doing the whole thing over again. But trust us, it’ll be worth it.

What’s in  a Growth Plan?

To create your growth plan you’ll need to identify:

• Your ideal customer – Who are you selling to? What is their age, location, occupation, and income? What things are they interested in? Why do they buy your products? What problems do your products solve? How do they buy your products – how do they make their decisions? Answer these questions and you’ll have a good idea about what to show the people you’re targeting.
• Your industry – What does your niche look like in terms of personalization? What is it doing well for customers and where is it letting them down? Providing a tailored experience could position you as an industry leader.
• Your competitors – Who are they and what are they doing to offer customers a personalized experience? Taking a deep look at your competitors will help you plot ways to outdo them.
• Your conversion funnel – How well is your funnel performing? Where are customers entering the funnel and where are they falling away? Look at where personalization can be used to help turn window shoppers into customers, and keep them coming back.
• The low hanging fruits – What quick wins can you achieve to help you increase customers spend? Do you show returning visitors recommendations based on their browsing history? You could help them find the product they need if you do. What about your emails – do they address the customers by name? According to Aberdeen, personalized emails improve click-through rate by an average of 14% and conversions by 10%. Look for areas where personalization can be used to produce quick results.

Planning personalization increases effectiveness.

Answering these questions will help give you a clear idea of where personalization can be implemented to improve your customer experience and steal a march on the competition. You’ll know where to focus your efforts, the tactics (some of which you’ll find below) that can be used, and exactly when to roll them out.

2. Incentives

Incentives can be used at various stages of the marketing funnel. They can be the tempting offer that entices a person to your store, the offer that convinces them to purchase, the reward that keeps them coming back, or the thanks a customer gets for showing you support.

For visitors to your store that have left without purchasing, a retargeted ad on social media (Facebook, Instagram, or Twitter) or Google Ads can serve as a reminder of your store and product. If that ad comes with an added incentive in the form of a discount code or a free trial, that might be enough to tempt them into action.

Similar offers – discount codes, buy-one-get-one-free, etc. – can also be used to turn new email subscribers into paying customers.

Beyond offers, membership programs and loyalty points are a great way to show people you value their custom.

The concept is simple: customers do what you want them to do – buy something, leave a review, or recommend you to a friend – and you reward them for it.

This could be in the form of points that can be collected and exchanged against products, or discount codes that can be used on certain purchases. Whatever it is, if the customer sees value in it, they’ll embrace it. As is shown by the fact that 69% of customers allow the presence of rewards to influence their shopping decisions, and 84% of consumers say they’ll stick with a brand that offers a loyalty program.

It’s all about showing customers that you care. 

[midchimp]

3. Product recommendations

According to Barilliance, product recommendations account for 31% of e-commerce site revenues. What’s more, customers who click on a recommended product have a 70% higher purchase rate.

Shoppers buy recommended items. That’s a fact.

Why so?

Because it makes life easier for them.

Product recommendations can be displayed as similar items, complimentary items, or recently viewed items and should be tailored to the user. For example, if a visitor to your website has sorted items in order of price, low to high, this suggests they’re price sensitive.

Recommendations for that user focused on sales and offers might be more effective.

Use recommendations on landing pages, product pages, category pages, shopping carts, cart abandonment emails, and in social media ads, keeping them functional, effective, and user specific.

4. Social media ads

We’ve touched upon them already, but social media ads are a huge part of any personalization marketing strategy. Adobe found that, despite the rise in ad blockers, 78% of consumers like personalized ads.

Which makes sense.

The whole idea behind using ad blockers is to get rid of spammy, non-relevant ads that ruin the browsing experience. But, if those ads are tailored to things the user is interested in – well, then there’s no need to block them.

Retargeting – displaying ads based on the online habits of the individual – through social media is effective because it’s not overbearing. Platforms like Facebook and Twitter have frequency caps that stop users seeing the same ads over and over. This is better for the consumer and for you, as it cuts down on wasted spend.

Expedia is a good example of retargeting done well. Take a look at how they use FOMO (Fear of Missing Out) as a way to tempt previous website users into making a spur of the moment decision.

Best Buy also uses social media in a clever way to appeal visitors that have abandoned their shopping cart – something that 88% of web buyers have done before completing a transaction, according to Forrester.

5. Content Marketing

Personalization isn’t all product focused. Content has a lot to do with turning a visitor into a buyer in the first place. A study by the Content Marketing Institute shows that 70% of consumers prefer to learn about a product or service through content rather than traditional advertising.

If that content happens to be tailored to the individual’s needs, all the better!

Here are a few ways to deliver content in a more personalized way:

Send emails by name – It’s an old trick, but it’s as important as ever. Statista research shows that the open rate for emails with a personalized message is 18.8%, compared to 13.1% without any personalization.

Send emails as a human – According to Campaign Monitors’ email usage stats, Nearly 60 billion junk emails will be sent each day in the next 4 years.  You must make email personal.  An email that comes from a human is much more personal than one signed off by a brand. Reading a message that is sent from Tim Cook, for example, makes it appear that Tim Cook, the CEO of Apple, is talking to you. If that message was sent from Apple, however, you’ll assume that every Apple customer has received the same email.

Segment emails – Use analytics and customer personas to send targeted messages to the right customers. Look at the kinds of emails they engage with, the links they click, and the offers they prefer, and send out content that appeals to their interests.

Connect on social media – 95% of 18-34-year-olds follow brands via social media, and 71% of consumers who have had a good social media service experience with a brand are likely to recommend it to others. The trick to goof social media personalization is to be human. Show that real people run your social media channels, and that content isn’t fully automated. Respond quickly to problems and questions, and react to feedback – good or bad – in a positive way.

Create targeted landing pages – Like segmented emails, create landing pages based on your customer experience. Build the content around their needs and A/B test different versions to compare and improve.

If you’re a Shopify user, we’re working on a new app designed to help you use personalization to turn browsers into buyers, putting into practice some of these personalization tips. You can sign up for that here.

Conclusion

In an e-commerce landscape dominated by AI and driven by data, brands that neglect personalization simply won’t survive.

Consumers increasingly demand it, and brands are increasingly seeing the value in it.

Take the time to understand your customers, appreciate them, and better serve their needs. 

• Look for areas of your website and marketing campaigns that can be improved by personalization
• Get a clear idea of your ideal customer
• Create a growth plan for personalization
• Connect with your customers on a personal level via all marketing channels, showing them the things they want to see and rewarding them for their loyalty

Get personalization right and you’ll create an army of loyal customers that spend more and shout about your brand from the rooftops.

For more on how to grow your business and stand out from the competition, check out The Growth Marketer’s Playbook – our step-by-step guide to help you turn your idea into a seven-figure company.