Love Connection: Win and Retain More Customers With Personalization

Merchant Seeking Customers For Long-Term, High Value Relationship

Table of Contents

Courting Your Customers 3-4

The Age of the Customer 5

Personalization the Amazon Way 6-7

Knowing Your Customers 8

Keep Them Coming Back 9

Examples from Big Brands 10 - 12 (ModCloth, ProFlowers, Sephora)

Conclusion 13

How Jirafe Can Help 14

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A recent article in Practical Ecommerce compared marketing to acquire long-term, loyal ecommerce customers to dating someone you hope to one day marry. The more you get to know your customers from your very first interaction, the better the likelihood that you will be able to turn that customer into a high lifetime value customer.

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Courting Your CustomersImagine if you knew who was actually buying your products. Not just one person buying one product at one moment in time, but understanding your customers over the life of their interactions with your brand! The Econsultancy Realities of Online Personalisation Report found that 94% of businesses believe that personalization is critical to their current and future success. A recent Jirafe poll had similar findings, however we also asked merchants how easy it was to target customer segments - and 56% said it was difficult for them, and that they didn’t have data they could easily understand and take action on.

Consumers are web-savvy, mobile-enabled, data sifters who pounce on whichever brand or store offers the best deal. Brand “monogamy”, the thinking goes, is vanishing. In response, companies have ramped up their engagement, expecting that the more interaction and information they provide, the better the chances of holding onto these increasingly distracted, fickle customers who have other options.

But for many consumers the rising volume of marketing messages via email, social targeting, and retargeting, isn’t empowering—it’s overwhelming. Rather than pulling customers into the fold, marketers are pushing them away with relentless, aggressive interaction that doesn’t even take into account the customer’s needs. Ultimately, the key to any successful relationship is knowledge–and this applies just as much to their preferences for tailored communications as it does to their product preferences.

To put things into perspective, it’s important to understand purchase behavior, such as which marketing channels a customer prefers, items and categories a customer is buying, purchase frequency,and average order value.

This data enables you to build in-depth customer profiles and provide insight into general conversion trends. You should also be able to identify different types of customers. For instance, if you know which customers only buy items at full price, never send those customers an offer about a sale. Conversely if you have customers that only buy items on sale, you want to be sure to only send them promotional emails. Better yet, use that information to identify what individual customers like and send them follow up information about complementary products they they might be interested in.

Last, but not least metrics around a customer’s lifetime value to your brand is important, not only because these types of metrics help you to treat your customers differently, but they also help you to increase the probability of a conversion. In fact more than 80% of brands use the same messages to target the same customers regardless of specific age, interests, gender and many other factors that might affect whether or not they make a purchase.

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Customers have the upper hand. They can choose from any number of brands offering similar products, and can access those brands through more channels than ever. The probability of selling to an existing customer is 60–70%. The probability of selling to a new prospect is 5-20% (Marketing Metrics).

In a little more than a decade, the choice of where to shop has gone from traditional brick-and-mortar stores and print catalogs to online, and now mobile shopping platforms. In the past five years, the rise of smartphones, tablets and mobile apps has completely changed the way customers find, browse and buy new products. Indeed, the customer is king when it comes to choosing when, where and how to buy the products they want.

Customers make purchases based on their lifestyle, income, and age among other factors - which means that a one size fits all retail experience could make your brand vulnerable to one that attempts to engage your customer with more personalized content over time. The result is fierce competition to earn your customers' business and continuing loyalty. Some of the biggest retailers have spent years developing user experiences to help make the customer feel like their online shopping experience is customized just for them.

The Age of the Customer

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Amazon is a prime example of how to personalize your customers’ web experience with product recommendations. It’s unlikely that any two people will see the same Amazon homepage as the content is tailored based on previous purchase behavior. Per the examples below - Amazon has perfected the art of delivering personalized customer content.

Amazon Example - Generic view for a visitor who is not logged in.

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Amazon Example 2 - View for a logged in user.

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Big data isn’t just for Amazon, nor does big data have to be a big challenge. Brands of all sizes are learning how to leverage data to drive customer engagement. They're doing so by identifying which tools can help focus their efforts on what matters most to their customers. In fact, the right commerce intelligence solution should help you identify the which products your customers love, how much they spend and how often, and ultimately what is their lifetime value to your brand - which will help you drive better engagement with your customers and prospects.

Brands can use this data to create ideal customer profiles -and then use those profiles to help engage with customers and prospects via channels that drive the ideal customer to your site, and to ensure that you are targeting them with products that drive the highest customer value. They the can also target existing customers with the goal of increasing it.

Ultimately, data can help you understand each customer's interests, shopping habits and decision-making process. In turn, you can use that information to help inform their buying experience and keep them coming back.

Knowing Your Customers

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Customers aren't going to tell you all about themselves the first time they visit your site - much like dating. A good relationship is built over time, and through continuous analysis of your customers’ data. The most important, and basic thing you can do in order to start to capture this data is to get their contact information. Registration can be a pain, but if retailers can persuade customers to register without making it a barrier to purchase, then there are huge benefits in terms of retention. They can track orders, receive special offers and, most importantly, repeat purchases are easier if delivery and payment details are saved.

At the most basic level, understanding customer behavior and intent comes down to having a strong understanding of what marketing channels drive traffic, what their repeat purchase rate is, understanding whether or not they pay full price, and more. For instance, if the money you’re spending on Facebook advertising isn't generating any new business, perhaps it's time to shift that cost somewhere more productive.

Aside from knowing which channels to invest in, merchants can use customer information to personalize other campaigns, like email. Batch-and-blast email methods are far from extinct, but if marketers know, for example, that Pinterest-referred customers have high AOVs, shouldn’t they get a different message than Facebook-referred customers who are buying less, if at all?

The answer, of course, is yes! By being thoughtful and providing this type of segmentation -- thanks to the right use of data -- you'll be able to give customers a more customized experience. The same kinds of experience they've come to expect from many big brands. Give your customers the feeling that they're at the center of the shopping experience, and even the smallest businesses will have better opportunities to sell.

Keep Them Coming Back

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It's hard to find new customers. And it's even harder to turn first-time customers into repeat customers. The better you know your customers the easier it will be for you to help them discover products that appeal to them, which will encourage them to return to your store.

The biggest retailers on the Internet have figured out how to convert visitors into customers, and customers into repeat customers. The top retailers average conversion rates average around 20%, well above the 1-5% everyone else sees. Two out of three Amazon customers come back to buy more.

We can't all have the budget of Amazon or the sheer number of marketers employed by Walmart. However, a commerce intelligence platform can help level the playing field for small and mid-sized merchants. With the right solution you can leverage data similarly to a top retailer, and you can tailor the customer experience to keep visitors coming back.

For example, offering loyal customers some kind of reward or exclusive content is an extremely powerful way of strengthening brand affinity.

This can be a gesture as small as dedicating albums on Facebook that share pictures of your customers, or responding to customers on Twitter directly like ModCloth. ModCloth also gives customers the chance to pick their favorite clothes that will be sold online and sends customers exclusive emails.

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Example: ModCloth sends their loyal customers exclusive deals.

Examples of Personalization from Big Brands

Targeting the right customer with the right email can keep you top of mind with them, and help them to filter out the noise of your competitors. In an ideal scenario, personalization will also encourage your customers to make a purchase.

Example: Proflowers sends post-purchase emails.

After a customer makes their first purchase, or any purchase - it might be a good time to follow up with a welcome email and some cross sell suggestions or an email to encourage repeat purchases. In the example below, ProFlowers thanks their customer - and then provides a follow up offer and features products the customer might like based on their purchase behavior.

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Example: Sephora rewards their most valuable customers.

Sephora gives their most valuable customers the white glove treatment. Like most brands - Sephora’s MVPs represent a good deal of of revenue, and as such they are well taken care of.

Here’s how:

● Rewards are tiered based on how much customers spend

● Customers receive personalized product recommendations based on how much information they provide and past purchase history

● They get their choice of free samples and gifts upon checkout based on purchase volume and what’s available

● They receive a free gift on their birthday and free makeover

● They also get exclusive access to promo codes and sales

● Free beauty counseling from product specialists

…all designed to introduce customers to even more products they will love!

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Jirafe Can Help!Jirafe provides more than 80,000 merchants with daily insight to grow their revenues. Our product was built on best practices learned from analyzing more than 425 million shopping experiences and the daily purchase behavior of more than 65 million shoppers. We provide emerging brands like Tuckernuck, Dolls Kill, and Diamond Candles with enterprise class ecommerce solutions that they can grow with. We also provide larger merchants such as Nasty Gal, Nikon, and GE with a high performance, targeted e-commerce solution to manage their business. Visit jirafe.com to learn more.

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ConclusionWe've seen what analytics and big data can do for the biggest retailers, and we know those same techniques can be applied to any brand, regardless of size, product selection or target audience. The effect is a dramatic improvement in first time sales and repeat business.

Get to know your customers better, and you'll find you have better customers. In today's competitive online marketplace, however, many find that's easier said than done. Technology can unlock greater value from those who find your site, and can help you to tailor the experience to each individual.

MERCHANDISING MARKETING ORDER HISTORY

CUSTOMER DATA PURCHASE FUNNEL FINANCIAL

Services At a Glance:

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Merchandising Insights

● Which products are selling and which aren’t?

● Which products are purchased together?

● What products generate the highest customer lifetime value?

Customer Insights

● Which customers that buy at full price versus customers that are discount driven?

● Who are your high value customers, and what should you do if their purchase behavior declines?

● Who are your best customers by category, and what offers should you target them with?

● Which customers are likely to make repeat purchases, and should be enrolled in a loyalty program?

A few questions we can help you answer:Abandoned Cart Insights

● Which customers viewed a product but did not purchase?

● Which products were added to cart but not purchased?

Marketing Insights

● Which channels deliver you the highest lifetime-value customers?

● What is your customer lifetime value over?

● Which marketing efforts are earning you the most valuable customers?