Creating an effective personalization strategy does not happen overnight. There are many factors that you must consider to build a better and more effective customer experience. The right strategy will fall into place once you get to know more about your customers. Continue reading and find out how to build an effective personalization strategy for eCommerce businesses.
Defining Personalization Strategy
Personalization in eCommerce is a strategy that aims to provide meaningful personal experiences in an eCommerce site. Over the years, there are different personalization techniques used by successful businesses.
Here are the following personalization techniques:
- Providing dynamic content
- Creating relevant product recommendations
- Offering specific deals
The offer depends on the customer’s browsing behaviors and actions, purchase history, personal data, demographics, and more. Personalization strategies rely mainly on what customers prefer.
This is a technique sought by business owners who want to keep shoppers engaged and those who wish to bank on the customer’s previous purchases. When done correctly, personalization can increase sales and eventually improve conversion rates.
Is Personalization Strategy Right for Your Business?
If your business deals directly with customers, then yes, personalization should be a part of your eCommerce strategies. Personalization will make your customers and would-be customers feel more welcome.
Your customers will more likely take on offers as these match what they need and what they are looking for. With the careful thought of a personalization strategy, you can build a good long-term relationship with your customers.
If you’re still unsure if a personalization strategy is best for your business, consider these questions:
- Do you have enough customer data?
To come up with workable consumer data, you must have a large audience segment. A larger group is perfect and should be focused on the visitor’s device, location, single-visitor behaviors, and if ad campaigns attract those.
But if you haven’t started categorizing your customers and visitors, you must begin by clarifying your data and segmentation. Usually, these must be done before you start going into personalization strategies.
- Do you have access to resources for personalization?
Are you working alone with first-time entrepreneurs, or are you working with a team that can help you with your personalization strategies? Maybe you are getting ready with personalization tools to start your plan?
Are you ready to go with a team that will help you with experimentation or a team that can evaluate your personalization strategies? Finally, do you have enough resources to keep updates to your segments? Remember, these will soon multiply as soon as you enhance your testing.
You will soon be very involved with personalization, and thus, you need specific resources. You must also be able to sustain your segments and other variations. Along with managing your business, personalization will take a lot of your time. Thus, you must learn to deal with procedures and implement a clean and systematic process for personalization.
- Do you have a process to validate personalization?
Take note that personalization is all about coming up with a hypothesis and then testing these hypotheses. This is about your assumptions regarding your segments and the best approach to relate to these segments. Remember, theories are just assumptions and will need to be validated.
The best personalization technique is a process that will help you get insights about customers and then validating these. A structured strategy is needed to validate these insights, making sure that these will help your customers and, eventually, grow your business.
Steps on Building an Effective Personalization Strategy
Ecommerce personalization is crucial in building trust with your customers. However, most companies skip this step and rely on algorithms instead. Although algorithms are critical in growing an online business, it pays to have a personalization process so you can create relevant and compelling content.
Some businesses also rely on marketing tools that make use of data collection plus AI. However, these result in a fragmented buying experience and less than the desired expectations. Therefore, personalization in eCommerce is not just about getting data and working with algorithms. You need a time-tested process, actual people to get data or content and systems.
- Conduct research
Similar to an A/B test, doing research helps find out all critical segments. If you’ve already done CRO, then there are a lot of research materials you can use. It is also likely that you have data from experts, various departments, and analysts representing your customers.
Research data along with internal information can identify qualities about your customers that will help you with segmentation. For instance, if you own a children’s clothing company online, then you may have these hypotheses about your customers:
- Customers are mostly stay-at-home moms.
- Some of the customers are looking for affordable children’s clothes.
- Most customers take advantage of coupons, discounts, and sales.
Taking from this example, you should start with data-supported divisions rather than personalizing customers to a segment. Also, it would help if you prioritized segments according to the expected value and how easy or how hard they are to implement.
When you’re done with classifying your segments, it’s now easy to list the various customer experience you want each of them to have. Again, considering our example, you may list some of your plans to offer discounts, sales, and deals to customer segment 3. You may also list down new clothing ideas and designs ready for customer segment 1.
- Create a hypothesis
Now that you’re done listing expected outcomes per segment, it’s time to check each one with data. If you have previous purchase data and analytics, these are enough to start your test.
Start with cluster analysis of the three-segment categories: stay-at-home moms and deal seekers. You’ll find out that there are three clusters of customers, not just two, as some customers behave like other buyers in some ways. Meanwhile, some segments that don’t fall in the data clusters should not be included.
And according to the results you gathered, your children’s clothing company will test the three clusters. Customers will be classified depending on their buying behavior and the products they check out online. A/B testing may be done in one segment.
- Come up with a test
Testing starts with selecting a channel, and the best one will depend on the tools and systems in place. You may need a web developer’s help, or you can do it yourself if a good eCommerce platform handles your site.
Usually, a great place to start is email, as this platform is not affected by caches. You may have only limited information to create good content, and thus, you begin to compose an email that targets your first cluster. As results come in and yield good revenue, you may start to test the other segments through email as well.
More results will yield more data from potential customers. Data will need to be classified and combined to create a general idea of how their segments affect email marketing.
Now that you know which segment works with a specific channel, you may repeat this first test using other media. You can combine different segments to come out with more relevant information. Finally, it is also easier to identify trigger behavior as the established product traits are now available using email.
- Run more tests
You can’t stop now. Once you’re done with the first test, it’s time to start testing on other channels. Take the one that yields best and start from there. Consider the various segments and try these using different media.
Besides testing your segments using email, you may also consider re-arranging your products according to your segments. For this strategy, you may ask for website developers to help you out.
- Combining your segments
Once you find out that multiple segments work with your tests, combine segments to produce a more personal experience for your customers. Combining categories plus brands usually strike a good deal for consumers.
Going back to the children’s clothing online business example, combining segments should work like children’s clothing at home at discounted prices or the latest coupon codes.
It’s now evident that your future tests will become more complicated as the variants will increase. But, this is necessary to come up with compelling content to achieve personalization. Many eCommerce tools can help you with combining segments; however, tagging and working with used content is essential. You may need to consider changing how you create content.
- Your trigger behavior
After segmentation and considering segment behavior, you can now make assumptions on how customers browse and view it as meaningful or non-meaningful content. Should a customer check on four toddler clothes, two of these are high-end brands while the other two are more affordable brands, what could be the target for this customer?
The target may depend on what the customer prefers when it comes to clothing brands. If this customer chooses to use premium brands, you must target him with premium branded clothing and clothing accessories. You may target this premium brand-customer through various and multiple channels to ensure that you capture his attention.
- Create a more personal approach
You may have noticed that you have not just come up with segments, but you have combined segments and learned how to trigger customers’ buying behaviors. This is when segmentation has successfully transformed into personalization. Now you’re ready to go to the next level and use personalized data about your customers.
You can start by using personalized recommendations such as your recommended products for a particular customer. Next time the customer visits, he will be surprised about how personalized the product lists are. This makes it easier for him to pinpoint what he needs.
Fine-tuning data will help you further without losing recommendations. You now have products to offer for a specific segment. You may now apply the same product recommendations to similar customers.
Personalization is just a part of a bigger and brighter picture that involves marketing optimization. All the information you gathered from testing will inform your future segments and help you create personalized emails and messaging.
The information that you get from personalization testing will help you form a future hypothesis. Never underestimate insights that you gather during your personalization tests are not just for your current segments but also prove worthwhile for future ones. Consider that the best approach to personalization is to gather insights to validate tests.
Take these to come up with hypotheses and, eventually, your overall optimization/personalization strategy. Don’t worry if you feel overwhelmed at this point; most first-time eCommerce business owners and entrepreneurs are. However, don’t let this affect your goal of creating an effective personalization strategy.
Let this inspire you to take your business to a whole new level of customer relations.
Learn more about personalization strategies at Rocketium.