We have established in our previous blog that businesses should treat their best customers, their prized possessions like royalty. Not all customers can be kings for a business in the current economic scenario. In this blog, we will explore how to effectively differentiate the best from the rest using CLTV (Customer Life Time Value) and why it is important for brands.
Being a camel to survive the harsh realities of the global economy is now essential for all businesses. The key to crossing the COVID-19 chasm would involve persevering through the tough times by modulating growth and creating sustainable business processes.
Just as a conductor coordinates dozens of musicians in an orchestra to create an experience greater than the sum of their individual parts, you as a marketer can design and deliver 1:1 personalized customer experiences by creating a memorable symphony using the right customer data-driven personalization platform.
To create a harmonious, melodic symphony called ‘Omnichannel Personalization’ for your customers, you need to have a simple and structured process.
There has been so much buzz about personalization that everyone knows that it’s a game-changer to stay ahead in the marketing game. The only problem is that marketers are facing a hard time deciding to add personalization technology in their marketing arsenal. Cost, integration, and complexity are some of the standard worry factors. In fact, 9% of marketers have succeeded in leveraging the power of Omni-channel real-time personalization fully. The rest of them are either trying to get their heads wrapped around personalization or are finicky about choosing the right platform.
Let’s accept it; advanced personalization is the only way to stay ahead in your marketing game! But sadly, only about 9 percent of marketers have been able to implement hyper-personalization strategy to improve their 1-to-1 customer experience and witness a 5 to 15% surge in their ROI. The rest of them are either just talking about it or struggling to find the right Omni-channel personalization tool.
Rich Relevance emerged as a popular Omni-channel personalization tool in Martech space. This San Francisco-based company provides personalization technology to large retail brands to help them individualize customer experience across the website, mobile App and in store. Rich Relevance offers an array of features to make your own rules and setting to truly personalize your site or App for every user. However, the tool isn’t intuitive (or easy to use) and takes a long time to integrate, which is a big decisive factor for marketers. The reporting level also needs to be at par when compared with other tools.
In 2006, The Time Magazine named “You” as it’s person of the year, in recognition of the way user-generated content (UGC) created by individuals and made available to a wider audience was changing the business world. As a result of the 2008 recession many things changed in the business world, but the supremacy of the individual gathered momentum.
D2C brands no longer had complete control on how their customers interacted with them. With vast amounts of user-generated content (UGC), consumers were able to obtain every detail of a brand’s offering as well as that of their competitors to make an informed purchase decision. This changed the world of marketing forever, marking the end of an era.
With this loss of control came the need and challenge for D2C brands to understand their customer’s needs, desires, expectations, where and when a customer prefers to engage etc. With content and information at the buyer’s fingertips there is no room for error, one misguided interaction can cause the customer to shift his/her attention towards competition who is also after the same goal – the execution of an impactful, personalized experience that will convert prospects into loyal customers.
This has led to the rise of The Omnichannel Strategy.
What is the Need of an Omnichannel Strategy?
An omnichannel strategy puts the customer and not corporate silos at the center of it’s strategy. A D2C brand that adopts this, acknowledges the fact that their customers can engage with them in multiple ways across multiple channels (website, mobile, social media, etc.) simultaneously.
This means the marketer needs to have a unified customer viewof every customer, in order to ensure customers have a seamless customer experience; blurring the boundaries across channels.
Necessity is the mother of invention
The COVID-19 pandemic has accelerated digital adoption among consumers. Which means D2C brands, like you, need to rethink your strategy.
Now more than ever, you need to focus on customer-centricity. Remember a missed inflection point has cost a lot for brands in the past like Kodak and Nokia.
What do you need to do?
Digital Transformation – is just the first stepping stone.
To ensure you regrow and sustain beyond this pandemic you need to deliver relevant, impactful, and cohesive experience to your customers across all digital touchpoints; leading to the dire need for Omnichannel Personalization.
Remember the times when seeing your name in the subject line of a generic email campaign seemed like a revolutionary advancement in digital marketing?
But today personalization is offering every individual customer a tailored experience based on his/her behavioral data-points, previous interactions, geolocation, demographics etc; that will give your brand a competitive edge in this increasingly crowded and tech-savvy marketplace.
A few questions you might have:
So, omnichannel personalization is customization?
Let’s define customization – the action of modifying something to suit a particular individual or task.
They sound pretty similar, right?
While they both achieve the same goal, the path to that goal is different.
Let’s look at a common scenario to understand the difference better:
You roll out a form to each of your customers where they can choose their preference in type of clothing, size, pattern, price range, etc. and then you send them a customized email for relevant products. This is customization.
Whereas, if you are using personalization, you would already know your customer’s choices. You would know that – Mary purchases from the Women’s section, prefers pant-suits in the price range of $100 – $150.
Using this data you can now send emails,web push notifications, and app push notifications informing Mary about relevant products even before she asks for it!
According to an Accenture Survey, 91% of consumers are more likely to shop with brands who recognize, remember, and provide them with relevant offers and recommendations.
So, personalization is leaning more towards segmentation/personas?
Let us look into this scenario to understand the difference:
Imagine you are a customer. You purchased a pair of running shoes. Based on this information you are segmented into a group of customers who purchased the same running shoes.
Let’s say the members of your segment group, a minor majority (let’s say 4 out of 10) purchased a watch as their next product, the remaining 6 out of 10 purchased various other products.
Based on this minor-majority data, the product recommendation would be a watch. Which means for this segment 6 out of 10 times the product recommendation was wrong!
This is where AI-based personalization makes sense. Every customer is seen as an individual and individual-level data is tracked like age, gender, device , geolocation, pages browsed, time spent on each page, product categories viewed etc. to truly know an individual customer’s interests and intent.
Don’t just think persona – think persona and behavior.
71% of consumers feel frustrated when product recommendations are based on impersonal segment data.
Omnichannel Personalization is good for your business
Inventory – the largest asset for D2C brands
Formost D2C brands, the cost of inventory is the heaviest expense item and what leads to the most financial woes. Obviously there is a direct correlation between inventory turns and a brand’s success – you sell more, you turn more inventory!
Imagine you are sitting in a restaurant and the waiter says “Your favorite pasta when paired with XYZ wine tastes the best”. This is classic cross-selling, let’s look at two views here:
Customer: Impressed and satisfied
Restaurant: Sold both pasta and wine, which means increased sales; more inventory turned.
With personalization, you can understand your customers better by tracking their onsite and cross-channel behavior and use this knowledge to cross-sell products across your inventory range. Thus, decreasing your month-to-month inventory holding costs.
You can reduce your inventory costs by 10% by reducing inventory distortion.
Customer Lifetime Value (CLTV) : Customer Acquisition Costs (CAC)
Paying to acquire users might sound paradoxical. But, unless you’ve created a viral marketing campaign that organically drives customers to your website – through strong word-of-mouth, you will have to invest a sizable portion of your marketing budgets into acquisition efforts. You will be waiting forever and a day by the time your marketing and advertising efforts catch up.
Your CAC is increasing!
Which means you need to increase your CLTV !
Improve your Average Order Value (AOV)and Purchase Frequency by providing your customers with personalized product recommendations based on an ideal price point for each individual customer, you can ensure an increased frequency of purchase.
Use your unified customer viewto choose the right customer and the right time to send personalized and meaningful relevant product recommendations to upsell a product. Thereby, increasing your Average Order Value (AOV) per customer.
You can send these recommendations across all channels: email marketing campaigns, web push notifications, app push notifications etc.
This will help you maintain a healthy CLTV:CAC ratio.
Customer Retention – Brand Loyalty
In an increasingly competitive landscape, building customer loyalty is one of the biggest challenges marketers face. And if they aren’t personalizing their customer experience they are missing a trick.
56% of online shoppers are more likely to return to a website that gives personalized product recommendations
A research by PWC uncovered 12% of online shoppers choose their favorite retailer because of personalized offers.
Aid product discovery – increase sales
Tailoring a home-page 1:1 to show relevant content and relevant products aids a customer in product discovery thus increasing sales by 7%.
You are losing a huge number of sales unnecessarily, when customers put products in their cart and drop out before completing their purchase.
Collecting real-time data from shoppers as they browse and if they abandon their cart can help you end them triggered personalized “cart-abandonment” emails to nudge them back to complete their purchase; thus increasing sales by 8%
Return on Advertising Spends (ROAS)
The average global CTR for digital display ads is just 0.17% which translates to fewer than two clicks per 1000 impressions.
The solution for this abysmal performance is personalised ads!
A research states that personalised ads can increase CTRs by 158%.
Ultimate Nirvana – Low costs, High sales!
Increase your ROI – a recent survey says brands have had $20 return for every $1 invested in personalization, that is nearly a 20X return!
Nike has stopped selling on Amazon – all of us read this groundbreaking headline. That was just the beginning – since then it has been setting benchmarks by evolving into a true D2C brand – investing on Omnichannel personalization and garnering a 3X increase in their sales.
Evolve into a true D2C e-commerce brand, see increased profits and higher ROI – Just Do It!
[ This is the first in a series of blog posts to help you understand “WHY you should” and “HOW you can” become a true D2C brand ]
The success of all the internet and E-commerce super giants Amazon, Netflix, and Spotify has proven the mettle of personalization. And yet, “there are only 9% of marketers who have completed the development of a hyper-personalization strategy, according to findings from Ascend2’s “Hyper-Personalization Strategies Survey Summary Report.” Most marketers are either just talking about it or haven’t done anything about hyper-personalization.
E-commerce platforms don’t have the benefit of a sales assistant who would accompany customers in their shopping journey in the Brick and Mortar stores. And this is indeed one of the biggest challenges that e-commerce platforms face today. The solution to this problem is Product Recommendation that would give your shoppers an experience similar or rather better than shopping in a physical store.
Here’s all you need to know about Product Recommendation to get you started.
86% of customers say that personalization impacts what they purchase, and one quarter admit personalization ‘significantly influences’ their buying decisions.
Personalization is something that has become critical to a brand’s success, regardless of the industry. Customers expect a personalized experience across all touchpoints including web, mobile, in-store, email and many more. To succeed in your marketing efforts, you need to understand how customers interact with your brand, and then customise their experiences across the journey.
Marketing budgets are the first to take a hit for businesses across the world with the economic slump as a result of the pandemic. While this is an unprecedented situation worldwide, brands shouldn’t be caught off-guard with their digital strategies. But shouldn’t digital businesses be spending more on digital marketing now with more netizens online? Yes & no. Getting more eyeballs for a brand doesn’t really translate into more profits overnight, and that is the key to survival during these tough times – profitability.
With each passing day, a little more technology is seeping into the ways world functions. Given the recent global happenings, embracing digital technology is increasingly becoming a necessity than an option. Considering marketing, it might be hard to exactly pin-point the time when the marriage of technology and marketing happened, but the MarTech Guru, Scott Brinker certainly revolutionized how brands looked at the role of technology in marketing.
Scott Brinker is widely considered as the chief evangelist of Martech, who helped kick start the conversation around marketing technology. Scott created the Marketing Technology Landscape, charting the growth of the marketing technology industry from a few hundred vendors to over 8,000. In 2014, he launched the Martech conference, where he serves as the event’s Program Chair. He is the man behind management.
Globally, there are about 3.5 billion smartphone users. It is no surprise that the mobile app industry is thriving. App usage and smartphone penetration is still growing at a steady rate, without any signs of slowing down in the foreseeable future.
A recent Deloitte survey discovered that an average American checks his phone more than 47 times a day, with an average of 4 hours per day on his phone. This was before COVID-19. Extended periods of self-quarantine have increased the screen time usage by 70-80%.
Remember the Matrix movie series where all the machines were automated and humans had to just plug themselves in? As far-fetched as it seemed, we are beginning to see automation in our everyday lives and cannot help but imagine if it could become all-consuming one fine day.
As scary as that sounds, our smartphones have become utterly indispensable during the COVID-19 lockdown and we have found solace with the ever-engaging WhatsApp Messenger, our savior ‘Neo’.
In-App messages can prove to be an effective communication channel to connect with your customers when they’re most engaged with your brand – in your app! And if you’ve Smartech SDK integrated in your apps, you’re in luck. We’ve recently introduced the ability to quickly create and deploy highly targeted and engaging in-app messages to your customers that are goal-oriented. We’re especially excited to notice that, in our initial limited release, we’ve seen our customers achieve an increase in:
Averageapp session time and CTR,
Response rates on surveys and forms (achieved using targeted incentives), and
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