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September 11, 2019

Build the most effective personalisation strategy

Henrik Feld-Jakobsen
Henrik Feld-Jakobsen
Head of Strategy & Consulting
Frame (9)

Personalisation is the talk of the eCommerce town. But it can often be difficult for businesses to know exactly how and where to start on their personalisation strategies. In this article, we'll be introducing you to our Five Levels of Personalisation framework to help your business develop an appropriate roadmap for future success. 

 
Here's what we'll be covering:
  • Why is personalisation important? The benefits of personalisation for eCommerce success.
  • The business challenges of starting on—and keeping to—a personalisation journey.
  • Vaimo's Five Levels of Omnichannel Personalisation

Providing a personalised, unified and seamless experience is something that companies with a digital offering strive for.

Numbers also prove that those who manage to offer such experiences increase order conversion, average order size and customer loyalty:

  • After a consumer has a personalised shopping experience 44% will likely to become a repeat buyer — Segment
  • 53% of marketers say ongoing, personalised communication with existing customers results in moderate to significant revenue impact – DemandGen
  • Marketers see an average increase of 20% in sales when using personalised experiences – Monetate
  • When asked to prioritise one capability that will be most important to marketing in the future, 33% of marketers answered: “personalisation” – Adage

The power of personalisation is clear to see. 

 

The ego-centric user — why personalisation is important

Apple gave us the iPhone. And with it, a tool that was so easy to use that anybody that was able to point and move a finger would be able to use it. It set the precedence of an era where user and customer experience have become of utmost importance to get attention and be ahead of competitors. And we as users are becoming more and more used to companies that: don’t waste our time, remove all friction for us, and make it as relevant as possible.

Day-to-day examples:

  • When I watch Netflix on my phone, I can instantly pause and pick up the same episode on my SmartTV (seamless experience across devices)
  • If I use Uber, I don’t even have to know the street name where I am — or take out any cash or credit card
  • Both Android and iOS (if enabled) will automatically learn my routines and help me with traffic information before I get in the car
  • Any map software will put me in the centre of the world, making everything adapt to my location

.. and the examples continue. This is what we are used to, without us thinking about it anymore. This changes our expectations of any digital interaction and experience.

This makes us lazy, impatient and more annoyed by any experience that is either slow, non-relevant or difficult. This is for the same reason that eCommerce psychology (subconsciously guiding the user for a specific choice) and nudging is working very well in all digital platforms. It’s clear that we don’t like to think.

 

Why many fail at delivering a great personalised experience

So why is it that not every retailer, brand or manufacturer delivers this experience? One simple answer is complexity. The unified experience does not align with how we build our companies. Internally, channels are separated, and departments are specialised into competence areas with profit & loss, separate performance indicators and different strategies. But the biggest challenge for most remains in integrating and creating an interconnected IT infrastructure where data flows seamlessly across systems. Because of organisational and technical reasons, many get stuck at the early stages of their personalisation efforts.

Examples:

  • The retailer that is only offering you online personalisation, but not taking your in-store purchases into account because of the lack of quality of ERP master data
  • The manufacturer that offers strong forecasting capabilities provided by sales reps, but doesn’t offer the same insight in the eCommerce platform due to a lack of integrations and a unified data model
  • The brand that offers onsite recommendations on the eCommerce platform, but doesn’t include any data from interactions with specific promotions or products in newsletter campaigns

There are many things to do right to master the discipline of omnichannel personalisation. But understanding what to do, when, can help to align your efforts and let you progress in stages. Like training from couch to running a marathon, you want to have a clear understanding of your efforts and return on investment when you progress towards your goal.

We have found that many become inspired going to conferences or getting engulfed in hype and marketing. While most can resonate with the “why” and the importance, only a few can translate it into a “what” and “how”. For executives and programme managers, this means that understanding the pragmatic step towards the vision of omnichannel personalisation seems difficult and sometimes impossible.

For this reason, we have digested our years of pragmatic experience with the “what” and “how” to the framework of the Five Levels of Omnichannel Personalisation.

 

The Five Levels of Omnichannel Personalisation

This framework can help you to understand where you are today, and how you can progress to the next level.

 

Level 1 - No personalisation

You don’t do any automatic personalisation in any of your digital channels. Most likely you are sending out bulk campaign offers and your content and products are one fit for all.

 

Level 2 - Single-channel personalisation

You’re able to serve products, content or experiences tailored to your customers based on behaviour or intent. Most decide to use a ready-out-of-the-box solution with very easy add-on personalisation capabilities. Some email service providers also offer you to personalise emails based on demographic information.

Most of these easy-to-implement tools can be quite efficient but mainly hold their own data and intelligence within their system, creating silos of information. This means that user behaviour and insight don’t get transferred from one channel to another.

Despite not being out-of-the-box cross-channel integrated, starting to personalise product, content and search recommendations are proven to have a strong return on investment.

Example platforms:

 

Level 3 - Multi-channel personalisation

At this level, systems start to be integrated, opening up data silos. Some personalisation tools or email service providers try to collect data from more channels to get a more unified view of user behaviour. Bridging the information across channels can be valuable to create a better and more relevant experience. If you as a user click on a specific product or banner in the received newsletter, this information is highly relevant for the onsite personalisation.Understanding your onsite behaviour can also make email automation easier, and make sure whatever offers you receive are as relevant as possible — moving away from one-campaign-fits-all send-outs.

Example platforms:

 

Level 4 - Omnichannel personalisation

Serving an omnichannel experience requires all your channels to be able to access and attribute data to central user profiles, gathering both behavioural and transactional data. If you’re a retailer, that means that the store personnel might be able to pull out the customers’ latest purchases (regardless of channel), or that the onsite personalisation tool knows what you as a customer bought the last time you went to a store—getting a better understanding of your preferences.

If you’re a distributor or manufacturer, it could be that your field sales have insight into what intent the customers have shown on the eCommerce platform and that this might show that the customers want to expand into a broader assortment.

Companies that are successful in omnichannel personalisation have a personalisation strategy with a clear understanding of what data is relevant, and how that data drives better experiences and greater customer insight.

Example platforms:

 

Level 5 - Unified personalisation

The holy grail of personalisation is to have a centralised view of the user and be able to serve predictive personalisation. Predictive personalisation requires high data quality and a unified data model across systems.

To deliver unified personalisation, it’s necessary to have a central view of the user that both obtains and feeds information to all systems that hold customer information.

For most, this means implementing a DMP (Data Management Platform) to be able to centralise information from 1st (owned data), 2nd (data collected as a result of cooperation) and 3rd party (data delivered by data providers) data.

A DMP will also allow you to activate your data into new channels. For example, by understanding what channel, behaviour and served experiences drive your most profitable customers, you can use this insight to target similar audiences on your social marketing channels.

A well-implemented DMP gives you unlimited insight and power as a business to analyse and act on your customer data in a data-driven way. Most DMPs also apply machine learning and AI to help you turn the amount of obtained data into actionable insights.

Be aware that implementing a full DMP can be both expensive and difficult. And before mastering the basic steps of personalisation, it can be difficult to understand and define how a DMP can drive the best value for your company.Example platforms:

I hope the Five Levels of Omnichannel Personalisation can help you to navigate your organisation in how, what, and why you should develop a personalisation roadmap.

Book a 15 minute intro call to get additional advice from our strategy experts

At Vaimo, we have extensive experience in guiding our customers in a pragmatic and platform-agnostic way to succeed with personalisation. Reach out to us for a consultancy meeting to learn how we can help your business incorporate personalisation for maximum eCommerce success.