Personalization is the next big step in the evolution of digital retail marketing, right?
You’d think so, based on how many big-time retailers are absolutely crushing it with personalization. Retailers such as Netflix, Amazon.com, and Target.
But for every business kicking their sales into overdrive with personalization techniques, there are many more still searching for answers. According to CEB’s B2C Marcomm Personalization report, 74% of marketers using digital personalization say their results have been marginal at best. Despite this, they expect to increase their personalized marketing communications from 12% to 56% in the near future.
The lesson here? Most retail marketers recognize the value of personalization, even if they’re struggling in their implementation. And they’re going to keep trying – and upping their spend – until they get it right.
If your retail business is one of these – or if you’re just starting to personalize and you want to avoid some pitfalls – here are 11 reasons why your personalization efforts might not be working the way you want them to:
1. You don’t have a clear strategy
Why are you personalizing communications in the first place? What business objectives are you hoping to achieve?
Some companies skip this part completely. They know personalization can improve results, so they dive right in. They feel they can make it work with a mixture of imitating what they see along with trial-and-error. What they fail to account for is the negative effect of personalization done wrong. In other words, poor implementation can detract from your results rather than improving them. So even if you’re doing well in some areas, your overall success might be bogged down by others.
The simple solution here is to develop a plan. Know exactly where you’re going to personalize and what measurable results you expect to see. And create a long-term strategy, too. What’s your vision of personalization in the future? How will it transform your business and the way you interact with customers?
2. Your messaging isn’t natural
You can’t just add <firstname> in front of a subject line or message and expect it to sound like a friendly greeting. Too many personalization efforts fail to address that using someone’s name is awkward if it’s not done right. Building – or even acknowledging – a relationship needs to affect your entire message, not just the greeting. The tone you use, the word choice, the level of familiarity… all of these play an important role in how your message is perceived – and whether the recipient acts on it or not.
3. You’re scaring customers away
Yes, too much info can be a bad thing. Customers want targeted offers, but they’ll become uncomfortable if they feel you know too much about them. Retailers who “tip their hand” by showing how much data they’ve collected are more likely to drive customers away than to strengthen their relationships.
Customers expect you to know their name, contact information, and purchase histories. Anything else gets a little creepy, from their point of view. That doesn’t mean you shouldn’t learn everything you can about your customers that’s relevant, of course. It just means you should use that information without making it obvious you have it.
4. You’re focusing on short-term instead of long-term goals
Personalization is a long-term game. It’s about building a relationship with your customers, learning their choices and patterns, and using that information to:
- Increase your marketing effectiveness
- Transform the way you interact with them
- Improve your overall value from each unique individual perspective
If you’re just using personalization to bump your email open rates by 10%, or some other similar metric, you’re missing the point.
5. You’re not obtaining the right data
Many personalization efforts focus on name, contact info, and purchase history. And while that’s a good start, it’s not enough to transform your customer experience.
This CEB study showed that while 76% and 66% of marketers collected demographic and purchase data respectively, only 32% collected psychographic data and 22% collected any offline consumer behaviors. If your objective goes beyond improving sales a point or two, these are just some of the different types of data you’ll need.
6. You don’t have the right analytics
It’s one thing to collect all that customer data. It’s another to know what to do with it.
For example, take the numbers we discussed in the previous point. Of the demographic data collected, only 47% said they used it in personalization and only 8% used it to personalize in real time (e.g. displaying an individualized offer or product page). Of the purchase data, just 49% used it for personalization and 11% used it in real time. The psychographic and offline data were even less likely to be used at 16% and 13% – or 6% and 3% real time – respectively.
As you can see, many companies are struggling to use their data effectively. But if you subscribe to Netflix, if you shop on Amazon.com, if you’re a member of Facebook… you’ve seen how real-time customer data can be used to great effect.
You can do that, too. But you’ll need the right analytics to sort through, categorize, and even make inferences on all that data so you can create a meaningful plan.
7. All talk, no listen
Too many companies collect “just enough” information and then deluge customers with personalized offers. They stop listening to what customers have to say, or how their responses change over time.
If you truly want to change the customer experience, you need to accept that your relationship will evolve and adapt over time. You’re never “done” collecting data, because once you stop listening, the relationship is over. All your hard work will evaporate the moment a customer feels like you’re just playing the numbers.
8. Too much tech
You need some fairly sophisticated technology to implement your digital personalization programs, especially in real time.
The danger here is in relying too much on that technology. Technology is just the framework. Your communications and interactions should always appear human and genuine. Where some companies fail is in spending too much time tweaking their technology and not enough time developing messages with real human warmth and emotion.
Consider the “suspension of disbelief” used by the entertainment industry. Personalization is like that. Deep down, most customers know everything is computer-generated and automated, but as long as it feels personal, they’ll go along with it.
9. Focusing on the message instead of the experience
Your message is very important, of course. And failing to craft the right message will derail your personalization from the very start. But communication shouldn’t be the only thing you focus on. Real transformation comes when you focus on how to modify an individual customer’s experience.
10. Your data is not properly integrated
Just because you think you have a 360-degree view of your customer, doesn’t mean it’s true. In an article that looks at accuracy problems in personalization data, InformationWeek cites a combination of internal, external, and deduced information that can lead to data errors. In these cases, “they think they have a 360-degree view of the customer but they may have a 180-degree view instead.”
Getting all your systems to communicate smoothly and share their data is easier said than done. But the cost of losing customers from poor targeting can be much higher.
11. You lack consistency
This happens when personalization occurs as a series of unrelated events rather than a complete strategic plan. One department might send out a personalized email saying all the right things, then another sends a message sounding like retail spam. Sometimes different systems will store different variations of names and demographics that can make your company appear inept. And sometimes your “targeted offers” aren’t targeted properly, making the customers feel like you really don’t know them at all.
Once you’ve started down the road of personalization, you need to understand you’re creating an expectation on the part of the customer. Not every communication needs to be personalized, of course, but they do have to be consistent, or the “suspension of disbelief” we mentioned above is lost.
Personalization the Right Way
Personalization is important in the retail industry today, and will be even more so if you want to remain competitive tomorrow. DecisionPoint specializes in mobile retail solutions that can help put the “personal” back into your online sales. For more information on how our packaged and custom-built enterprise mobility solutions could transform your business, call us today at 949-465-0065.