The Value of Personalized Marketing for Ecommerce

A well-executed personalized marketing program may resemble person-to-person conversations like those a shopper could experience in a brick-and-mortar retail store.

It is easy to recognize a genuinely good customer experience when you have it.

Imagine you visit a top-notch kitchen boutique in a posh shopping area. The inquisitive associate in the store helps you select an espresso machine, recommends espresso beans, and offers tips for how and when to clean and maintain the machine.

Then, a week later, when you come back into the store, the associate recognizes you, asks about the espresso machine and the beans, and genuinely seems interested in your answers and feelings.

This simple act of remembering who you are — in the sea of customers the associate sees daily — makes you feel like a valued customer. That experience makes you appreciate the store and the associate. So when she asks about your family, what you might be cooking tonight, or if you’ve ever tried a Scanpan CS+ skillet, it feels like a conversation with a trusted advisor, not like a sales pitch.

Like an associate asking questions in a store, businesses interested in personalized marketing need to think of data collection as a conversation.

Personalized Marketing

In effect, this conversation is personalized marketing. A textbook would define the term differently. It would say personalized marketing uses data analysis and digital technologies to provide new or prospective customers with individualized messages and product offers.

However, at its core, personalized marketing may be a conversation.

If the conversation doesn’t go well, the customer’s experience can be jarring. If you have ever received an email message from a retailer that starts with the line “Hello %%%FIRST NAME%%%” you understand just how damaging a poor conversation, a poor attempt at personalized marketing can feel.

This same sort of disconnect can happen between an advertising campaign and the transactional emails a customer receives after a purchase. A shopper who is drawn to a retailer because of the latter’s funny ad campaign may notice if it turns out that the brand’s email messages are bland.

The Calm App

“I am going to use one of our customers as an example; [it is] Calm, the meditation app,” said Garin Hobbs, director of deal strategy at Iterable, which makes a growth marketing platform.

“Most app marketers would tend to segment their audience in, probably, fairly broad swaths: those who use it for free; those who’ve seen the value to pay for premium,” Hobbs said, adding that this is not enough. Calm saw engagement rates fall significantly even after customers paid for a subscription. Customers were drawn to Calm from its ad campaigns but then experienced a disconnect.

“So let’s think about what might draw people to a meditation app, like Calm. You’d think meditation is a shared value. But different reasons draw each of us to it.

“One person might do it for stress relief or to reduce anxiety. Another might do it to have an opportunity to step away and unplug for just five minutes every day. It’s just finding that inner peace and the opportunity to come back to the center. That’s very different from stress or anxiety. A third person — such as an athletic-minded person who does a lot of physical training — because of the mental training aspect. A person might come to develop this new sort of intellectual habit. Then there might be a person who is adopting a more new-age lifestyle, and for whatever reason, he feels like meditation is a part of that. Finally, we might have someone looking for ways to feel more fulfilled and relaxed but might feel like meditation is a little crunchy. It’s for people who hide crystals around their house. I’m not really sure if that’s for me,” Hobbs continued.

“So now we have six different people who are all drawn to the common value of meditation,” Hobbs emphasized the word “value” with air quotes as he spoke. “But subjectively, there are vastly different things that drive them here.”

Give and Take

Here is the challenge. Marketers who want to identify what is driving each customer to shop and engage should ask questions like the inquisitive store associate mentioned above.

Some of these questions might come as part of an initial sale when a merchant’s ecommerce software collects a name and address. The give and take of conversation could continue in a welcome series. It might be as simple as asking a shopper if she prefers email messages or text or if she would rather use an app or the mobile web.

This conversation continues with each new purchase and new interaction. It is holistic because the conversation takes place not just in email but on the store’s website and in its app when a customer interacts with a customer service agent.

Ask for Clarification

Once a question is asked, or behavior is observed, it needs to be understood. If the customer’s response or behavior isn’t clear, clarify it.

There is an inherent risk in making a wrong inference. A business could cause the conversation to fizzle or, worse still, alienate a customer.

“If I see that somebody’s entire data history is purchasing men’s clothes, but all of a sudden I see a dress, what’s the significance of that dress?” Hobbs said.

“If we’re using straight inference, I might infer that it is either a gift for somebody else or it’s for themselves. It’s 2020, and we can’t roll the dice on questions like this. That dress could be for the customer, and you need to ask or discover that respectfully — in a way that makes the customer feel safe, that makes the customer feel like a desired part of your brand audience, but it also has to be asked in a way that is very genuine and authentic to brand values,” Hobbs said.

This might mean using polling on a merchant’s website, progressive profiling via email, or other ways to ask for clarification. It is not unlike how a good store associate might try to understand what is really important to a customer and what his or her motivations are.

Leading to Loyalty

“The field of competition for any category of ecommerce retail — goodness, for any category of anything — is extremely dense. The internet has created such an equal opportunity for anybody with an idea … to go out and compete with even the very largest brands. Consumers are absolutely spoiled for choice,” said Hobbs.

“Think about even just a single item, such as a Patagonia puff jacket. I could easily list off a dozen places right now where I could buy that same jacket at the same price and still get things like free overnight shipping. So what’s to draw me to one brand versus the other?”

“The real answer is two-fold: value and experience. And those two qualities are highly subjective. But as we think about how consumers interact with brands, value and experience are usually the qualities that matter. That’s what draws us. That’s what keeps us. It is less about habit and more about the many, many different psychological and physical things that go into loyalty and help create preference.”

An individual’s feelings and preferences influence a subjective view. And one of the best ways a merchant can discover those feelings and preferences is through the give and take of a customer conversation.