I recently delivered a lightning talk on the why and how of personalisation and segmentation at Stackla's inaugural #StacklaSocial event. Here I'd like to share a few of the insights from my presentation for those who weren't able to attend! Read on to find out why personalisation is the key to transforming acquisition into retention, and some tips on how to start thinking about it for your business.
Segmentation and personalisation are not new concepts, but at the same time, and because of that, they are at risk of becoming misused buzzwords.
Nowadays, businesses will claim and say they want to create seamless customer experiences. At same time, you will often hear them say they want to ‘achieve personalisation’ as if this were an end goal. Personalisation however is a ‘means to an end’.
Why is personalisation the key to achieve your goals?
In today’s world, you can get what you want, when you want it - with little to no effort. We live in an Expectation economy in which our demands are evolving and accelerating at a pace faster than ever before.
At the same time, and in attempt to stand out from the crowd, brands are pursuing acquisition strategies at huge and increasingly higher costs. The market is however nearing saturation and the struggle to acquire new customers is becoming more and more challenging. According to Gartner, 80% of your future profits will come from just 20% of your existing customers. The reality is it is extremely inefficient to focus on acquisition more than on retention.
Taking into account the industry’s trends, and to respond to your customer’s needs, personalisation presents itself as the key to guarantee retention and impact your bottom line.
It's clear that personalisation is important - but how should you go about it?
Traditional approaches to personalisation have focused heavily on email segmentation and targeting. Businesses have always been able to easily use their CRM data to target customers and effectively achieve their goals.
This has been possible thanks to the RFM segmentation framework conventionally used in email marketing. With this simple schema, marketers segment customers according to recency of purchase, frequency of purchase, and monetary value (or their willingness to spend).
According to a study carried out by Econsultancy, email remains as the most effective channel to retain customers despite the explosion in customer data and all of the advances and innovation in digital marketing.
The approach to segmentation is not consistent across channels. When it comes to other online or offline channels, businesses will think about personas to whom they will often apply traditional textbook marketing concepts. They will focus on geographic, demographic or psychographic values to identify their customers.
But does it really matter if your client is a 30-year-old woman based in Shoreditch that practices yoga if at the end of the day all she wants to see from you is men’s clothing?
With the availability of data and the flexibility in consumption patterns, you should be looking at what your customers actually need, want, and do.
By targeting your customers according to their displayed behaviour in the same way email marketers do, you will be taking the first steps towards true personalisation to achieve that desired seamless experience and guarantee retention. To truly personalise your customers’ experiences, you need to understand where your customers are in their lifecycle and influence them at key decision points.
Taking this into account, what opportunities are available?
There is a clear opportunity to break the silos within businesses and action campaigns taking into account living, breathing available data.
Upload and action data
To begin with, if you already have identified segments within your CRM, why not reuse this data to target users throughout all channels? There is no need to reinvent the wheel.
With Qubit, our clients can easily upload their custom CRM data sets into our platform to power experiences. When our clients launch an email campaign to target at risk VIP users, their content on site can then reflect and mirror what users were seeing in their emails. The at risk VIP user will land on site, and be received with a welcome layer acknowledging them and reminding them that their exclusive offer will expire in 24 hours. In this way, by simply using data that exists across other channels, you can already guarantee a more seamless journey.
Quickly identify and target users
On top of CRM data, with the vast amount of information Qubit collects and tracks, our clients are really starting to make waves with their customer experience. When a user lands on site the information is already endless: you can know where they are located, where they are coming from, what time of day it is, how much time they are spending in certain sections… the list goes on. If you then combine this data with our prior existing knowledge of other users, you can easily identify what segment this user falls into.
If you know a user is coming back onsite for the third time this week and has recurrently browsed the ‘What’s New’ areas, it won’t take you long to know whether this user is displaying the same behaviour as other bloggers. If this user is a blogger, you should be showing them the latest arrivals when they come on site, because that is what they will want to see.
Segmenting users based on their behavioural history and then looking for on-site actions to react in real-time allows you to personalise the end to end user journey.
Marketers often view personalisation and segmentation as something tremendously complicated, requiring huge investments. This cannot be further from the truth. Data-driven personalised experiences are not only possible but are now expected by today’s customers. It is the key to transform your acquisitions into enduring customer relationships.
Big thanks goes to Stackla for hosting us at their event. If you'd like to learn more about how Qubit powers leading ecommerce businesses to deliver highly persuasive personlisation at scale take a look at our segmentation and personalisation capabilities, or drop us a line at [email protected]