The Guide to Driving Impact with Personalization
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Table of Contents
Personalization
The Key to Personalizaton: Data
Lenati’s Approach to Enable Personalization in Your Organization
Choosing a Personalization Vendor
Summary
Lenati and Dynamic Yield Case Studies
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PersonalizationPersonalization has been a topic of conversation among executives, marketers
and leading brands for over a decade. In a 2014 study conducted by Adobe, when
asked to prioritize one capability that will be most important to marketing in the
future, personalization topped marketers’ lists. Two years later, Forbes dubbed
personalization the “holy-grail of marketing.” Again in 2017, personalization kept up its
illustrious reputation as Gartner’s “#1 strategic investment for brands” (2017).
We keep hearing about the importance of personalization but why don’t we see it more
widespread—particularly in one of the most personal industries: Retail? Why don’t we
experience it more as consumers? And why do we struggle to enable it as marketers?
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What does this mean for retailers?Brands still have a lot of room for growth when it comes to delivering on the true,
personalized, one-to-one experiences that consumers have come to expect. Retail
today is hyper-competitive and ever-changing. For retailers, personalization is key to
unlocking ultimate relevance between a customer and your brand.
As marketers, we’ve all seen the vision for personalization through the voice of the customer:
Dynamic Yield’s research*
on the current state of
personalization maturity
showed that while
49% of companies
have identified
personalization as a
top priority investment,
only 23% are truly
capable of personalizing
experiences for each
channel.
*Earlier this quarter, Dynamic Yield released its initial findings from the first ever personalization maturity assessment test of 700 marketers and executives from cross-functional roles in various industries in Americas, EMEA, and APAC to better understand the degree to which companies feel as though they are personalizing experiences for customers. https://www.psfk.com/2018/02/op-ed-retail-personalization-strategy-success.html
“Recommend relevant things that add value to my experience, no
matter where I interact with your brand, but do it in a way that’s
meaningful to me.”
“Remind me of things I want, but don’t have time to keep track of.”
“Seamlessly guide me to the next service, or experience—show
me what I never knew I needed.”
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So, what exactly is personalization?We all agree that personalization is the new imperative for retailers if they want
to continue to acquire, grow and retain customers. There is often confusion in the
marketplace around what exactly is personalization. Is it your barista writing your
name on your latte? Is it a monogrammed handbag from a designer boutique? Is
it a targeted email marketing campaign with your name in the subject line? Is it a
targeted offer based on a user’s on-site behavior?
To dispel some common misconceptions, let’s align around a unified definition.
Personalization is not:
●• marketing: It spans far greater across the organization than a single marketing
campaign or program and is a capability rather than a sole marketing function.
• segmentation: While segmentation targets customers in a one-to-many
relationship, personalization aims for a one-to-one relationship between the brand
and a customer.
●• customization: 3D imaging of your foot to design a custom-fit boot is personal,
but not the practice of personalization. However, utilizing that fit data to serve
personalized recommendations of boots specific to your fit is personalization.
lenati defines personalization as proactively changing a customer’s experience
based on what you know about an individual consumer. It is an enterprise
capability that enables businesses to deliver the ultimate, personalized, and
relevant customer experience.
In addition, personalization:
●• Supports and enhances the overall
consumer experience across channels
and devices.
●• Establishes the foundation for seamless,
omni-channel experiences.
●• Builds brand credibility and enhances
authenticity by providing consumers with
relevant products, individual expertise,
and opportunities to engage.
●• Provides customers with more choice
and control over their experience with
your brand.
●• Allows for true one-to-one relationships
with customers.
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A brand that can anticipate a customer’s needs and deliver value throughout the
customer’s experience will unlock lasting, emotional relevance. Personalization not
only influences consumer behavior, transforming the brand’s value in the eyes of the
customer—but drives positive impacts to the bottom line.
Delivering benefits to customers and the brand
If retailers and brands alike know they need it, why hasn’t personalization been widely enabled?
The answer lies with the DATA.
“It would be disingenuous to say personalization is easy to implement, which is why its tremendous potential is yet to be realized.”
–Colton Perry, VP of Channel Dynamic Yield
Benefits to consumers
●●• ●Improved overall customer experience
●●• ●Increased relevancy of content and experiences
●●●• ●Easier to find products and services
●●●• ●Speeds up interactions with the brand
●●●• ●Improved brand trust
●●●• ●Increased emotional connection to the brand
Benefits to the brand
• Improved customer insights and data
• Increased engagement and conversion
• Increased customer retention
• Empowered sales people
• Increased top line revenue
• Increased CLV
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The key to personalization is data. It begins, first and foremost, with
identifying what you know about your
customers and what matters to them
by collecting all relevant data (from
all channels) and connecting it for a
360-degree view, to power personalized
experiences to the right person, at the
right time—at the moment that matters.
what does this mean for retail?
Many retailers, particularly those born
out of traditional brick and mortar,
are unable to achieve this dream of
seamless, omni-channel personalization
as a result of not investing in a cross-
channel data strategy. This leads to a
host of common data struggles for many
retailers today.
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Our retail clients often struggle with data in one of the following five ways:
Data collection is incomplete.
Retailers are collecting customer data, however, is it often minimal, infrequent and
not processed in real-time—limited to the brand’s owned digital channels, leaving
data collection on shoppers in physical stores a mystery.
Data quality is a major concern.
Retailers struggle to prioritize which data points matter. Creating a single, complete
360-degree view of a customer’s relationship with the brand should be a #1 priority,
but with that comes the need to identify obsolete, inaccurate or missing customer
data and create data management processes and systems.
Connecting data seamlessly across channels is overwhelming.
For retailers that are collecting customer data—the struggle now becomes how do
I make sense of it all? Retailers with an overwhelming amount of data in multiple
repositories often can’t turn data into actionable insights. Data sits untouched in
siloed databases: untapped and underutilized.
Enabling timely data across the organization is too complex and costly.
Retailers with a brick and mortar presence face the added complexity of connecting
in-store systems to antiquated tech stacks, rendering them incapable of surfacing
data to further personalize experiences outside of a single channel.
Justifying capital investments in data and technology is an uphill, multi-year battle.
Most retailers are long overdue for a technology overhaul, but brands often don’t
know where to start or how to best champion re-platforming. Prioritizing, let
alone justifying the high capital investment in data enablement technologies and
personalization solutions, is a labor-intensive task.
The retail industry is
facing an inflection
point—the cost of doing
nothing has simply
become too high.
Modernizing the data
infrastructure and
investing in customer-
facing technology is
now essential to future
proofing a business. The
long-term value of these
investments can and
should be quantified.
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A real commitment to succeeding with personalization requires the organization to align around the overall model—from
defining and aligning on a vision for personalization, to forecasting the financial return, and then organizing teams to support the
new processes, content marketing, tools and technology.
defining the vision for personalization
Brands must first define a universally agreed upon vision for personalization across the organization—What are the
key customer journeys? Who are the target customers that should be personalized to? What moments in their journey
should be personalized?
identifying the financial impact
Once a vision is defined, how is the bottom-line financial impact identified and communicated to leadership? What is the
benefit to the brand? How are the results measured and reported to key stakeholders?
prioritizing experiences to personalize
Not every customer interaction needs to be personalized. Identifying key moments in the customer journey to
personalize is a critical step toward building a realistic roadmap. What is the process of prioritizing ideas and concepts to
inform the personalization testing roadmap? What is the statistical significance for personalized recommendations? What
types of personalized experiences will drive the greatest customer value to influence change in behavior—and ultimately
uplift in revenue?
addressing legacy retail systems
Antiquated technology stacks (e.g., legacy CMS, CRM, POS, inventory management and recommendations engines)
present major roadblocks for many retailers. Yet, reevaluating components in your tech stack in order to better create
personalized experiences for your most valuable customers is of the utmost importance. Will another point solution
make or break the system or is a unified platform the answer?
determining the correct organizational structure
Personalization is no longer a one-off marketing tactic. Now a full-blown discipline, successful execution is heavily reliant
on selecting the right talent and appointing the right executive sponsor. Who will own personalization as an initiative and
where will they sit? How does it fit it into current processes? What additional people or processes are needed to enable
cross-functional change?
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building the content strategy
For personalization to be effective, most brands need a content strategy refresh to support the added variations of content
needed to support personalization. A successful personalization strategy is only as good as the content. Content needs
to be relevant, resonant and reflect various dimensions (e.g., location, genders and style preferences). How will content be
tailored to individual customers? What content considerations and variations are needed for each channel (e.g., website,
apps, email and social)?
determining scalability
Once a personalization pilot or use case has proven positive ROI, what can be done to continue testing, learning and
optimizing experiences in a timely manner? Will scaling beyond a single channel be possible?
identifying additional technology and or tool investments
Often brands are unable to enable personalization with their current marketing technology stack, leading to a build or buy
technology/tool scenario. How should potential investments be prioritized and what vendor(s) will fit the brand’s needs?
As daunting as this all seems, there is a path forward for retailers and those willing to take the steps needed to build out a solid data strategy, establish a clear vision for personalization, and work toward that long-term vision.
Those retailers will not only survive—but thrive.
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,
phase 1: define
Know the Customer
Customer insights & analytics
Value identification & needs mapping
Build the road map: identify the channels, journeys dimension and moments to personalize timing, people, process & tech
Data enablement and technology integration
Identify dimensions by which to personalize
Define required capabilities, data and technology integration
Develop the pilot and tests to prove out ROI(test & learn to inform data / tech expansion)
Technology integration, deployment– measure & scale
Design the Vision
Build the Data Strategy
Roadmap, Capabilities, Test & Learn
Technology Selection, Enablement & Integration
phase 3: data phase 4: plan & pilot phase 5: implement & scale
The path forward: solving for enterprise-wide personalization in your organizationLenati utilizes a comprehensive five-phase approach to personalization transformation; from defining customer needs, designing
a universally agreed upon vision for the experience and data—to roadmapping the plan from testing to full-scale implementation.
Design the vision for personalization
Build the data strategy: collection, connection & enablement
phase 2: design
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phase 1: Defineknow the customer
Building a single-profile view of the customer must be at the forefront of a brand
personalization strategy. This ever-evolving, single-source of truth is the basis to have
a 360-degree view of your customer’s needs, interests, activity and key attributes.
This allows you to understand how and what drives value for your customers.
●●●• ●What is the differences in customer needs?
●●●• ●What do they perceive to be the moments that matter?
●●●●• ●What are the experiences that drive lasting value?
●●●●• ●What matters more—personalizing by geography? Or by gender? Or by age?
By style segment or past purchase behavior?
●●• What kind of data are you currently collecting from you customers?
●●• What are the dimensions by which you want to personalize?
How do we make sure that their experiences across channels are seamless?
Lenati utilizes deep insights and advanced analytics to understand the patterns in
your customer data to help identify which data points matter to your business and
which are going to move the needle to turn an ordinary moment into an impactful,
personalized moment for a customer.
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phase 2: Design vision for personalization
The vision for personalization should align to the company’s top-down strategic
priorities and brand positioning, as well as be informed by customer insights and
analytics.
Lenati utilizes detailed customer journey maps to design the ultimate vision for
personalization across channels (in-store, online, app, partners, etc.) by mapping the
relationships between interactions, customer scenarios and key customer moments.
We guide brands to answer critical questions as we co-create a North-Star vision for
personalization.
●• What is the ultimate vision for personalization across channels?
●●• What is the customer journey and how does it intersect with other key journeys
(e.g., the salesperson’s journey)?
●●• What are the customer scenarios or moments that matter?
In addition, we work with brands to develop an approach to prioritization. Not every
experience or customer interaction with a brand needs to be personalized. A
personalization schema, unique to each brand’s business model is used to identity
the key moments of truth that should be personalized to drive the greatest impact to
the customer experience and to the brand. A successful personalization strategy must
focus on delivering experiences in the context of where a shopper stands on the path to
purchase.
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phase 3: Data data strategy
data collection
Identify the current state of data
collection, gaps and what data is
needed to enable the vision.
data connection
Develop the strategy to connect the
data across channels and identify
what data is needed to surface at
which points in the customer journey.
data enablement
Define the plan to enable the data
seamlessly across the customer
journey.
• What is the current state of the
data architecture and systems
integrations?
• What types of data are currently
being collected? (e.g., 1st party, 2nd
party, 3rd party, inferred)
• What are the gaps? What types of
data should be collected?
• What additional data mining
is needed to get the right data
surfaced to key decision makers?
• How can APIs help surface the right
data to the right channel?
• Do we need to buy additional data
to supplement our own?
• What kinds of surveys or customer
inputted data (explicit/implicit) has
the most value?
• What is the best way to engage our
consumer in preference setting and
progressive profiling?
• What are the core capabilities and
infrastructure needed to enable the
data across the customer journey?
• What technology or tools are
needed to enable this?
• What should be considered when
selecting vendors?
• What technology & systems
integrations are needed?
• How do we deploy, build & scale?
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phase 4: Plan & pilot roadmap, capabilities, test & learn
Lenati helps clients build a holistic roadmap to enable
personalization, guiding from single-channel tests to full cross-
channel, responsive personalization. Lenati works with clients
to understand what “the road to full-scale personalization”
should look like specific to the brand’s business needs including
defining the required capabilities, people, process,
technology and data.
In addition, it is imperative to create a robust test and learn
strategy that fits the needs of the business—to gather learnings
to inform the future state. These test plans and pilots can take
many forms from simple test-and-learns, to complex multi-
channel experience design.
Approaches to personalization pilots can vary depending on the
needs of the brand and desired test-outcomes:
• Single channel
• Specific customer or audience segments
• Individual end-to-end journey (e.g., shopping journey,
appointment booking journey)
Essential to the success of any personalization test or pilots
is the establishment of a detailed measurement strategy. We
encourage clients to include the following steps:
1. Define the pilot goals, objectives and outcomes
2. Articulate a clear pilot approach and journey
3. Map business objective to KPIs based on the
journey (e.g., acquisition, engagement, conversion)
4. Ensure the infrastructure exists to collect and
connect the right data
5. Align on a reporting approach to socialize the wins
and mitigate for quick-fixes
The insights and learnings derived from personalization tests
and pilots inform future tests and logic. In addition, a robust test
and learn strategy can prove out the return on personalization
quickly and effectively.
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phase 5: Implement & scale technology selection enablement & integration
Lenati helps deliver an end-to-end solution for personalization, from design to
implementation. One of the most important decisions we help guide clients through
is the technology vendor selection process for building out a robust tech stack to
enable your brand’s personalization vision.
One of the major roadblocks to implementation is integrating new systems with that
of legacy CMS or other back-end solutions. Retailers must consider their strategic
priorities while evaluating the various vendors, as only a select few possess the
capabilities to increase your bottom line.
When it comes to the technology integration and tool selection, we guide clients
through a thoughtful vendor-selection process to help answer and address key
considerations. We recommend clients vet vendors across various dimensions
including ease of integration, ability to onboard multiple data sources and capability to
deliver experiences in real-time.
What are the key differences in personalization engines?
What features matter most for my business?
How do I assess the trade-offs?
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Top three considerations when choosing a personalization vendor
1. Data flexibilityFirst and foremost, before looking at the core capabilities of a technology, identify
how easily the technology/tool can onboard data across multiple sources.
This requires the ability to easily collect first-party data while also providing easy
onboarding of third-party, CRM, loyalty, call-center and point-of-sale data.
Furthermore, it is essential that a platform can share audience data across devices—
your user’s behavior in a mobile app will significantly impact how she approaches her
next session on desktop, and a platform must reflect this.
Why is the data management capability so important? While every vendor will tout
the best machine learning algorithms, the strength of a vendor’s AI is determined by
how much data the machines have access to. Your machine learners are only as good
as the textbooks they get to study from!
1. Data
flexibility
2. Agility &
scalability
3. Recommendations
capability
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2. Agility, scalability and ease of useFar too often, retailers have big plans
to create cohesive, individualized user
journeys, but these often go unrealized.
This is a result of the fact that many
solutions in the market promise the world
but require weeks of implementation to
setup and then hours of time to build a
working use case.
To take personalization from vision to
reality, a tool must provide the ability for
marketers and merchandisers to build
experiences at scale, without heavy
reliance on developer resources. This
can be best achieved with a library of
templates that allow companies to create
personalized banners, recommendation
widgets, messages, promotional offers
and more with a few clicks. However,
only few solutions in the market offer this
service.
When evaluating vendors, ask to
see their library of out-of-the-box or
predefined templates for speeding
up workflow and time to market. You
can also challenge reference customers
about the actual time it takes to build
experiences from “soup-to-nuts” in a
platform to understand the real value in
templates that don’t force you to build
experiences from scratch.
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3. Recommendations capabilitiesFor the better part of the last decade,
retailers have turned to the hyper-specific
“point solution software” meant to serve a
singular value proposition, such as product
recommendations. While these platforms
are commonly associated as “best of
breed,” the truth is that without the ability
for data to flow freely to and from one
solution to another, the relevance of the
recommendations will ultimately result in
less impactful experiences.
The relevance of recommendations is
significantly strengthened by the amount
of data a platform can ingest and activate
(see point #1). Thus, innovative eCommerce
companies have started integrating
recommendations with the rest of the
experience by testing recommendation
strategies and layouts, and personalizing
recommendations based on a user’s
interaction with the rest of the website and
other channels of engagement.
Since recommendations are being brought
under the “personalization umbrella,”
it is vital to drill-down on a vendor’s
recommendations package.
Evaluate how many strategies a
vendor supports, which elements of
recommendations can be tested and
automatically optimized, and whether a
vendor supports combining AI-powered
optimization with custom merchandising
rules.
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Additionally, we recommend considering the following features and attributes:●• Ability to create personalized experiences for first-time visitors
●• Automated segmentation capabilities
●●• Omni-channel support across your brand’s ecosystem
●●• Robust data collection
●●• Layout personalization
●• Automated merchandising with manual controls
●●• Optimization and testing velocity
●• One-to-one personalization
●• Ability to be used by several stakeholders (marketers, merchandisers, product managers, etc.)
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In summaryThe benefits to customer loyalty, engagement and lifetime value of a well-conceived and executed
personalization strategy are clear. For retailers that are serious about realizing these benefits, the desire
to develop personalization as an enterprise capability can also be the catalyst to take the required step
of enabling customer data as a strategic asset. For personalization to have its greatest impact, brands
and retailers must do the foundational work of defining the strategic objectives that personalization
will drive and the key customer journeys that it will enhance. Those who follow the approach outlined
in this whitepaper will not only realize the benefits of being a leader in personalization, they will also
have measurably improved their ability to use data as a driver of their business—and will also see the
ongoing benefit of having rallied their organization around customer centricity.
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Lenati and Dynamic Yield Case StudiesFrom visioning to realized results, Lenati and Dynamic Yield have led
personalization with some of the world’s greatest brands.
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Sephora Digital SEA Personalizes BeautyIconic brand powers 82 live experiences with Dynamic Yield, achieving 6x ROI
Summary
Amidst a “retail apocalypse” where shoppers are abandoning iconic brands for generics and fast fashion,
Sephora SEA is thriving due to a steadfast commitment to providing the best customer experience. To create
the hallmark personalized in-store experience Sephora SEA shoppers receive online, the beauty retailer turned
to Dynamic Yield to personalize product recommendations, optimize digital channels for easy discoverability
and craft a cohesive experience across channels. Just six months after deploying Dynamic Yield, Sephora SEA
implemented 82 live experiences through the platform with PDP recommendations alone yielding a 6x ROI.
Sephora
“With Dynamic Yield, Sephora SEA customers can seamlessly find the right products for their beauty needs.
Personalisation is at the core of our eCommerce strategy and partnering with Dynamic Yield allows us to craft
truly customized shopping experiences across all touch points.”
Alexis Horowtiz-Burdick, Managing Director
Results
82 live experiences powered by Dynamic Yield
6x ROI from PDP recommendations
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Ocado Delivers Fresh ExperiencesWorld’s largest online grocery retailer increases conversion and average order value
Summary
Ocado, the world’s largest online grocer, operates three marquis brands in addition to their flagship
supermarket. To boost conversion rate and average order values across Fetch, Fabled and Sizzle, Ocado
used Dynamic Yield to personalize recommendations and send individualized messaging based on user
behavior. Ultimately, the retailer drove 8x more conversions from recommendations while also boosting
high value orders by more than 20%!
Ocado
“Dynamic Yield has made our marketing team a lean, mean machine, allowing us to seamlessly test
and deploy unique variations and strategies. We can quickly analyze our data in real-time and craft
experiences that significantly improve our core KPIs.”
Leonie Tamkin, Digital Marketing Manager
Results
8x increase in conversion rate from recommendations served by Dynamic Yield.
20% uplift in baskets of more than £75 from personalized messaging on homepage, basket page, and checkout.
7% boost in CTR achieved by personalizing homepage based on traffic source.
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REI Personalized Marketing StrategyA marketing and experience strategy that speaks to REI member’s passions and motivations
Summary
REI retained Lenati to help increase REI member engagement through development of a robust, enterprise-wide
personalization strategy. REI previously treated every customer in a “one size fits all” way, marketing the same
products, services, and promotions—regardless of differentiated needs within the membership base.
Lenati conducted analytics to determine common customer purchase behaviors related to product categories,
outdoor activities, and key customer attributes, including (but not limited to): tenure, annual spend, geography,
activity preference, and associated skill level. These insights fed into a personalized marketing strategy that
provided information and offers to customers based on their preferred activities and related needs. Lenati
worked with cross-functional stakeholders to develop a single-channel pilot in email. Proving out the return
on investment, Lenati developed in parallel the long-term enterprise strategy and “crawl, walk, run” roadmap
for expanding the personalization strategy across all channels, including in-store, online, app, social media and
outdoor adventures.
Results
10% lift in topline revenue over 3 years
10% reduction in customer churn
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Krista Gunstonehead of retail strategy
Martin Mehalchinpartner
other contributors:Youngji Kim John Kendall
Shana Pilewskisenior content marketer
Lenati Many of the world’s most valuable brands and retailers engage Lenati
to help them acquire, grow & retain customers. Our expertise
is aligned to achieving a stronger customer connection. We are a
marketing services and experience design firm that works on critical
initiatives that transform marketing and the customer relationship.
We are recognized by industry analysts as a leading strategic advisor
on loyalty and retention. From individual programs to holistic brand
strategies, we can help you build your approach to fostering behavioral
and emotional loyalty to drive deeper engagement with your customers.
Our focus is to deliver results and we work hand in hand with our clients
to implement market leading advanced marketing practices including
CRM, personalization and membership and rewards programs.
Dynamic YieldDynamic Yield’s personalization technology stack helps marketers
increase revenue by automatically personalizing each customer
interaction across the web, mobile web, mobile apps and email. The
company’s advanced customer segmentation engine uses machine
learning to build actionable customer segments in real time, enabling
marketers to take instant action via personalization, recommendations,
automatic optimization & real-time messaging–in a single platform.
Dynamic Yield personalizes the experiences of more than 600 million
users globally and counts industry leaders like IKEA, Urban Outfitters,
Ocado, and Stitch Fix among its many customers. Based in New York,
the company has more than 170 employees in five offices worldwide.
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