No two customers are alike, which is why providing personalised experiences is the key to keeping consumers
We all like to be treated as individuals. That’s why the personalisation of customer experiences has increasingly become de rigueur, with data driving more and more tailored experiences across the web. But whilst personalisation of customer experiences has only recently worked its way to the top of many retailers’ agendas, it’s important to remember that it’s not, in of itself, a modern innovation. “It’s not a new thing at all; it’s a very old thing,” says Adam Cleaver, founding partner at Collective London, the digital agency. “But it just feels like people are only to just waking up to the realisation that personalisation is a very powerful thing.”
Certainly there’s no shortage of evidence of the efficacy of personalisation, which has had a long heritage in the offline world. “We’ve been doing personalisation for years,” says Jason Nathan, global multichannel capability director at dunnhumby. For well over 20 years, the data analysis firm has been responsible for driving Tesco’s Clubcard scheme, which delivers personalised vouchers based around users’ shopping habits. “We have found with every retailer that we’ve worked with globally that the redemption and engagement rates for those vouchers when they are targeted are many magnitudes of scale higher than a blanket set of offers,” he continues.
But what has led to the upsurge in attention that personalisation has been receiving? In part, it’s an inevitable reaction to the realities of modern commerce. Whilst the shift online has introduced myriad conveniences for retailers and consumers alike, the rigidity of the digital experience is a poor imitation of the offline world. “The internet can be quite anonymous and quite cold,” says Frederik Demets, solutions architect at Acquia, the unified platform for content, community and commerce. Using the picture one has built up of the customer to provide a more unique offering can help to counteract the customers’ feelings that they are just seen as a cash cow to be milked. “It creates that feeling you have when you go to the same store every week and they know your name and your preferences,” he says.
Personalisation can also act as a filter, cutting the amount of poorly targeted messages consumers are bombarded with. “There is too much noise in people’s digital lives,” says Nathan. Given the huge volume of marketing emails the average consumer receives and that, with the increase of promoted content, social media is going the same way, there’s no room for poorly targeted efforts. “You soon realise that is noise in your system,” he continues. “But if it’s stuff that you actually want, you’re so much more likely to click on it for that immediate investment.”
However, to tailor your offering to a consumer’s needs, you need to get to know them. Whilst it may seem that in the modern age that we’re swimming in a sea of data, it’s worth appreciating the various sources of data that are available. Demets feels that there are three significant categories of data that can help drive personalisation: profile data, which focuses on profiling key categories of user, situational data, which is based on environmental factors like the weather or the date, and behavioural data, based on past user activity. “The key is to combine the three in a real-time manner so that we can actually use that as a basis for the best offers on the website,” explains Demets.
One area that businesses have traditionally struggled in, however, is drawing actionable conclusions from such a data-rich picture. According to Branden Jenkins, GM of global retail at NetSuite, the cloud-based omnichannel software provider, the key is being able to pull together this data into a single channel. “Getting a single view of the customer is foundational; it’s primary,” he says. Being able to form a unified view of the customer is essential if companies are to offer a truly personalised experience. “When we have the single view of the consumer – all their transaction information across all of these channels, the social element, overall lifetime value – we’re better able to provide this personalised experience.”
Once you have built up a coherent picture of the customer, an online start-up can begin to deliver a more personalised experience. “What you can now do is learn much more about the path to purchase and the context in which someone is in,” says Nathan. An example he gives is if he buys a Frozen doll for his child; a retailer can use the information it has gathered on other users to infer products that he might also like. But there are also opportunities for personalisation when a user abandons a cart, where a carefully targeted offer can help win people over.
There’s no room for hunches when dealing with data, however; it’s vital to test the effect these efforts have. “You have to group your customers in segments – based on average lifetime value, demographic or a mixture of attributes – that you can do A/B testing against,” says Jenkins. Comparing the impact of a personalisation effort against a control group can allow a business to see the effectiveness of these efforts in real time. But Acquia’s Demets stresses that testing is not an occasional effort but a continuous process of refinement. “Doing personalisation and AB testing is a lifecycle; it’s not a one off,” he says.
It’s hard to over-estimate the potential benefits this can have. “When a retailer can provide a more valued experience, they’ll build brand loyalty,” says Jenkins. Offering a personalised experience allows a more unique relationship to build between retailer and customer; customers are more likely to keep coming back if they feel a service is giving them value they can’t get elsewhere. “Make sure that you continue making the conversation with the consumer after the actual purchase and you continue to build that loyalty,” he explains.
Given this potential, gradually more and more retailers are using their expertise in data-driven personalisation in the online world to boost their game on the high street. With stores like One Stop and Asda announcing they are rolling out beacon technology, which can send targeted notifications to shoppers mobiles, undoubtedly we are starting to see a more personalised experience in physical retail. “The more you use data from online and pull that into the in-store environment, the more you can ensure what you’re talking to me about is relevant and interesting,” says Cleaver.
But not everybody is going to be happy with the idea of such comprehensive data profiles following them wherever they go. It’s fair to say there is a certain wariness amongst consumers about their data being used to drive targeted retail efforts. “There’s a fear of it being a dark art, that somehow retailers and marketers are going to use that data against you,” says Cleaver. “But personalisation should not be about ramming things down your throat.”
Instead the focus of personalisation, rather than being seen purely as an attempt to ramp up sales, should be on creating a better experience and offering the things one’s customers will actually want to be seeing. “If you’re marketing to the right people, they’re open to the things that you’re selling them,” he continues. “The advertising is less intrusive because it’s relevant.”
And ultimately this light touch is what effective personalisation is all about. “Good personalisation should be like the referee in a football game; at the end of a game, a great referee is one that nobody talks about,” says Nathan. In the same way that only a bad referee tends to provoke a reaction, only bad or cynical personalisation tends to provoke a strong reaction. When done right, it should simply act to provide a more enjoyable experience for the consumer. “When that does happen, you don’t talk about it being data-driven personalisation,” he concludes. “You just talk about ‘it’s great that this store knows what I like’.”