Putting Personalization into Context
Personalization is now table stakes in the world of retail, where it is a key tool in optimizing the customer experience. But to provide true value, it’s important to remember that while shoppers appreciate personalization, it’s only one part of an even more important factor for them — relevance.
Michael Cohen, General Manager, Zero Gravity Labs
The business world is increasingly enamored with personalization. From marketing and customer experience, to basic product/service positioning, the thought of providing individualized experiences to increase engagement or build loyalty is compelling, and the most forward-thinking companies are already investing in the practice.
In the data-rich world of loyalty, we have the opportunity to help retailers understand their customers on a fundamental level. With the right data science, layered onto purchase patterns, browsing habits and other individualized data, we are getting closer and closer to the ability to put the right offer in front of the right individual at the right time — every time. The idea of highly-personalized communications is also appealing to consumers, who are willing to share their personal information, as long as it will be used to enhance their shopping experience.
Every company should work toward some level of personalization, but as they head down that path, it’s important to keep in mind that while shoppers appreciate personalization, it’s only one part of an even more important factor for them — relevance. Yes, shoppers respond well to personalized messaging. But, if you push your personalization efforts beyond the bare minimum and commit to creating true contextual relevance through highly-relevant messaging, recommendations and offers for your customers, their level of engagement (and loyalty) is almost certain to increase.
Before you can elevate your marketing to be personalized and relevant, you need to first understand who your customers are. To do this, you should be considering all of your customer data, including demographics and shopping behavior. Once you’ve developed an understanding of who your customers are, step two is personalizing their experience accordingly.
There are many well-established methods for personalizing the customer experience, such as addressing message recipients by name, promoting products that are similar to their previous shopping habits and offering sales or specials based on a demographic. Personalization should also apply to how you communicate as much as what you’re saying. This means contacting shoppers via the channels they’re most active (Facebook, Instagram, email, etc.).
In the retail category, a personalized customer interaction might mean identifying a person who has browsed a particular product on your website but hasn’t purchased it, then following up with an email to gently nudge them with a discount or loyalty incentive. If you are a grocer with enough data to know that a shopper purchases a rotisserie chicken once a week, usually on Monday, this could even mean sending an email or a mobile push message on a Monday morning that incentivizes them to repeat the purchase.
Once personalization has become part of the strategy, marketers must take a third step: analyzing a myriad of factors that have nothing to do with what they know about a consumer’s shopping habits to create contextual relevance for the shopper. Information on their location, the time of day, communication channel or even the weather are all available (mostly through mobile). Tailoring communications to contextual data points can lift a lightly personalized communication to one that’s far more meaningful, creating the sense that each message is designed for just one recipient.
For example, what if the previously mentioned rotisserie chicken purchaser typically shops on the way home from work, but for some reason is at (or even near) the store at 10 a.m.? The prompt to purchase chicken at that time in the morning suddenly feels less relevant, especially if their next stop is work. By considering factors like location and time of day, you can switch gears to serve up a more timely and meaningful prompt or offer that incentivizes buying something that could be kept in a car or enjoyed at the office, like fresh-baked cookies. The message remains personalized to a product they buy on a weekly basis, but now your communication is highly relevant and more likely to increase the customer’s attention to your messaging. It also increases the likelihood they will take action based on it.
A great example of a brand that uses contextual data to create relevance is Ritual, an app that simplifies ordering takeout. When users place an order, Ritual references their location data to calculate how long they’ll need to travel to the restaurant. If the estimated prep time for the order is shorter than the travel time, the restaurant is automatically prompted to hold it until the customer is closer, guaranteeing hot food every time. They also take note when you’re in a new location, offering restaurant recommendations based on your previous orders.
Prioritizing relevance in addition to personalization is a great way to ensure the right message is being received at the right time. When a message is truly relevant, it’s much more likely to incite action. Smart analysis of behavioral data and contextual factors can also help avoid inaccurate “personalization,” like an email recommending a product based on a single gift purchase.
Personalization has become table stakes in the world of retail, but it is just one piece of the puzzle for improving the customer experience. Yes, shoppers expect a more personalized experience from their favorite brands, but generic personalization isn’t enough if it doesn’t ladder up to true relevancy. For that, you need to deliver the right message to the right person at the right time via the right channel. It’s not easy to perfect, but if you remember that personalization is only the first step of relevance, you have taken the first step to providing true context to your communication.
Zero Gravity Labs is the innovation arm of LoyaltyOne, focused on the changing face of loyalty and customer experience. To learn more, contact Michael Cohen at firstname.lastname@example.org