We know that the potential for retailers is enormous when it comes to personalisation. Happy customers mean happy retailers. But of course, it’s not all black and white. We sat down with Silpa Haria, Head of Digital Marketing & MarTech at Latitude, to discuss how and why brands and retailers should implement omnichannel personalisation to better target the right customers, in the right channel, with the right product, at the right time.
Let’s talk ROI. What’s the impact of retailers investing in personalisation?
Almost any type of media can be personalised with the technology and capability available today. When businesses have the data and it fits their goals, they can personalise everything from homepages to email copy, recommendations to loyalty discounts, sales funnels to personalised videos. A more personalised experience should deliver improved returns.
Let’s look at examples of the real ROI of personalisation. At Latitude, we utilised next best offer models to deliver personalised offer communications to customers, which achieved 33 percent growth in spend YOY.* According to a recent McKenzie report, personalisation can influence buying behaviour across the customer lifecycle, with 76 percent of consumers more likely to consider purchasing from brands that personalise.¹
Seventy eight percent of consumers are more likely to make repeat purchases from companies that personalise and are more likely to refer friends and family to companies that personalise.² Furthermore, between 5 percent to 25 percent of revenue is driven from personalisation, with companies that put first-party data at the heart of decision making deliver the highest percentage of returns.³
It might sound daunting and complex to deliver personalised experiences, but this is where a phased approach can help prove ROI. At a bare minimum, retailers can start by looking at how to improve online conversion rates through running ‘test and learn’ programs. In terms of complexity and capacity, personalisation can be implemented to varying degrees, depending on where it will create a richer experience or nudge the customer to take the next action. Modern technology can enable retailers to layer personalisation through the value chain, improving the ROI as the efforts scale.
For retailers who think it’s out of reach, where do they start?
Some retailers may have a limited understanding of personalisation, or the expertise and capability required to undertake these initiatives. They might view it as something they can’t effectively execute quickly. This could stem from a lack of understanding of the platforms,
processes or people required. Today, SAAS (Software as a Service) products are available to implement small personalisation exercises for small to mid-sized retailers with prebuilt automations within weeks, at a fraction of the cost of bespoke systems. It’s important for businesses to remember that personalisation is part of the journey, not the beginning. There are a lot of basics that can be done with very little cost – for example, leveraging behavioural data to tailor parts of the online experience to make it more relevant to a user’s needs. There is a lot they can do with insights that are in the Digital Analytics platform to inform optimisation of the customer experience or conversion to drive incremental value. Try to leverage existing customer data to drive personalisation of products or offers across your digital properties and communications channels before embarking on complex data integrations through multiple internal and external sources.
It’s also about taking a holistic approach. Businesses offering personalisation in one channel might end up offering great customer experience in that channel and a sub-optimal experience in another. A holistic approach ensures great customer experiences across any touchpoint during that customer journey. This requires collaboration of product development, marketing and operations, including fulfilment and customer care.
For many retailers, there’s a clear connection between product and customer when it comes to personalisation. But ‘right time’ and ‘right channel’ is still something retailers aren’t getting right. How do these four elements come together and how can we do better in this space?
Most retailers start personalisation at the product level, presenting relevant products or offers to a group of customers with a clear path to purchase or increase the customer’s basket size. Retailers find it easy to implement this because product recommendation features can be easily bolted on to popular eCommerce platforms. Product or offer recommendations within one channel work well if the customer journey is linear. However, the traditional linear sales process has changed drastically over the last few years. Today, purchasing journeys move fluently across multiple channels, from online to offline and back again. The average number of visits to a website before sales conversion has increased significantly.
It is therefore important for retailers to understand all the customer touchpoints and utilise the data, insights, and platforms to orchestrate one-to-one communication based on where the customer is in their journey. This is also where content and timing become critical, where the most relevant communication and action is presented to the customer in the channel, they choose to interact in. Start with analysing your data to understand which channels your customers use. Use technology platforms to connect and unify the customer data. Build out your customer journeys and content requirements across each journey. This will enable you to start communicating using the most relevant content based on your objectives and the customer pathway, whether it is in external channels such as media or your own digital channels. Integration across your owned and external channels will enable you to start a conversation in one channel and pick it up in the next channel the customer interacts in.
It is a journey, so start small. Focus on high impact areas that align with your key goals and continue to build from there. As you scale, you can get more sophisticated in the conversations you are having across all touchpoints.
How is personalisation evolving? What’s next (for personalisation and for Latitude!)?
Advances in technology continue to enable businesses to have access to more data and better tools to deliver on personalisation and improve customer experiences.
Advanced analytics, artificial intelligence and machine learning capabilities can be leveraged to deliver more accurate personalisation. This has been an area of focus for Latitude for some time. By understanding relevant interactions within our aggregated customer data and using machine learning to analyse patterns and artificial intelligence to build relevant offers for specific customer groups, we can create more relevant experiences across our ecosystem. We will continue to build out our foundations of scaled Omnichannel personalisation to allow us to achieve our vision of right customer, right channel, right time, right message!
Visit https://bit.ly/personalisationwhitepaper to access the Latitude whitepaper, Customer Hyper Personalisation Marketing: A targeted marketing approach to identify the Right Product for the Right Customer in the Right Channel at the Right Time.
*. Latitude November 2021 campaign, leveraging Next Best Offer model (benchmarked against similar campaign in November 2020, without the application of Next Best Offer models)
¹. https://www.mckinsey.com/capabilities/growth-marketing-and-sales/our-insights/the-value-of-getting-personalization-right-or-wrong is-multiplying
³.Use technology platforms to connect and unify the customer data. Build out your customer journeys and content requirements across each journey.