Personalized product recommendations may help shoppers discover products or services more quickly and boost ecommerce sales conversions.
There are, perhaps, a few possible definitions of personalization. For some, “personalization is about engaging customers using technology in ways that mimic how we would do it if we were face to face,” according to Jeannie Hopkins of Hubspot, who wrote about personalization in a May 2011 blog post. Personalization can be thought of as something akin to an intuitive sales clerk learning about a customer’s needs and preferences over the course of one or more conversions. The more the clerk understands the shopper’s situation and desires, the better job that clerk should be able to do suggesting products or solutions.
Personalization is one of the most interesting and important areas of ecommerce marketing today. Since it promises to help online merchants better serve shoppers and, thereby, create lasting customer relationships that are good for both the shoppers and the seller.
This article describes three strategies for helping small or mid-sized online retailers just getting started with personalization.
1. Build Long-term Relationships
Personalization should be seen as a way to improve a shopper’s experience. Its aim, like the intuitive clerk described above, should be to take what it knows about the shopper and offer relevant help in the form of better search results, specific product recommendations, or even product descriptions that help the buyer.
While proper personalization will almost certainly improve the merchant’s sales conversions, it is important to avoid the temptation to focus on single sale results rather than actually servicing the shoppers. As PetFlow co-founder Alex Zhardanovsky put it, “the Holy Grail is having a customer for life, and having that customer buy from you repeatedly.”
So what might this strategy look like when applied to a site? According to a recent finding from PredictiveIntent, a personalization-firm headquartered in the United Kingdom, “up-sells” perform about 20 percent better than “cross-sells.” Up-sells are when a site recommends a similar but more expensive replacement for the product the shopper is currently looking at. Applying the “build long-term relationships” personalization strategy may mean that a retailer shows some customers cross-sells not up-sells because that is what’s better for the customer regardless of what is better for the bottom line.
2. Actually Personalize
Personalization experts use the term “crowd wisdom” to describe data collected about a retailer’s overall user trends. Crowd wisdom provides insights that can be applied when the site does not know anything about a new visitor, and while this data can be useful, it as not related to individual needs or desires but rather trends and generalizations.
Using the phrase “People who bought this also bought” isn’t personalization, wrote James Doman, marketing manager for PredictiveIntent in an email. “Better technology enables retailers to gain a better understanding of the individual.”
For an example of real personalization, consider a returning shopper who searches for golf clubs on two consecutive visits. During the first visit, the shopper looked at the product detail page for three drivers. On the second, visit when a search results page is displayed, the top three items are those previously viewed items, personalized for the individual shopper.
3. Engage in Real Time
It may be true that the more a merchant knows about a particular shopper the better that merchant will be able to make recommendations or customize the shopping experience. But do not let that be an excuse to wait to begin interacting with shoppers in a personal way. Rather merchants should seek to engage shoppers with personalized interactions in real time.
Doman offered an example of real time personalization. Imagine that a shopper has been browsing through several pages of mens’ jeans, even adding a pair or two to the shopping cart. Now that same customer searches for “blue t-shirts.” Don’t show that customer womens’ shirts at the top of the search results list, but rather try to personalization the right then, based on behavioral information from the current session.
Personalization is a powerful marketing tool that may help online retailers build better, long-term customer relationships, improve shoppers experience, and improve sales conversions.