Personalization has long been one of the holy grails of marketing, but the pendulum seems to be swinging back in the past couple of years. As personalization has proven challenging for many marketing teams, some companies are giving up on this coveted tactic.

Gartner recently predicted that 80% of marketers will abandon personalization efforts by 2025 due to low ROI and tedious customer data management. Which, however, is a shame. Because when implemented well, personalization is a powerful growth lever for ecommerce businesses.

In this article, we’ll look at some of the challenges of ecommerce personalization – and 5 steps to a successful personalization strategy.

Related Reading: Ecommerce Personalization: Benefits, Tactics, And Best Practices

Why Would Marketers Give Up Their Super Power?

Admittedly, successful personalization in ecommerce marketing is no easy feat. There are numerous challenges, and making it work requires thought and effort from the marketing team. Let’s look at some of the difficulties that are putting marketers off this (when done right) very profitable path.

Data Issues

Data collection, data management, and data interpretation are significant challenges for most digital marketing teams. A lack of unified data, and a lack of understanding when it comes to data interpretation, are two common culprits that often make personalization efforts fall flat. With no one internally who can manage and interpret the vast amounts of data, it becomes impossible to make use of it.

Too Much Manual Work

The more you personalize your customer journey, the more rules you will need to create. And the more rules you create, the more unique content you will need for each scenario. If there is no strategic and thoughtful approach to this from the get-go, the content needs can quickly spiral out of hand. And after a while, some marketers find that the effort is not worth it. The remedy here is to think before you act, and plan your content creation in a streamlined way.

No Impact on Revenue

Even though the benefits are intuitive to most marketers, many marketing and merchandising professionals struggle to prove the direct value and ROI of personalization. When there are insufficient structures and processes for measuring marketing impact at different touchpoints, it becomes difficult to show if and how personalization has moved the needle.

As a result of these challenges, many companies are now abandoning their efforts to personalize the customer experience in favor of investing in site speed or other more easily measured initiatives. This is, however, very unfortunate. The impact of a well-implemented personalization strategy can not be overestimated, and most marketers know this in their gut.

Below are some numbers to show what that impact can look like:

  • According to Bloomberg, marketers see an average increase of 20% in sales when using personalized experiences. 80% of shoppers are more likely to buy from a company that offers personalized experiences.
  • In a Forrester study, 77% of consumers have chosen, recommended, or paid more for a brand that provides a personalized experience.
  • In Twilio’s 2021 State of Personalization Report, 60% of 3,000 consumers surveyed stated that they would become repeat buyers after personalized shopping experiences, which is a big jump from 44% in 2017. And, maybe even more telling, half of the respondents stated that they’re less likely to make repeat purchases from retailers after un-personalized experiences.

Related Reading: 5 Keys To Building An Exceptional Ecommerce Customer Experience

Personalized Ecommerce Works – When Done Right

So, the numbers tell us personalization works. And the reason it works is that consumers are people. And people like to feel known, seen, and understood. People also don’t like to waste time on things not relevant to them. And while there’s been a lot of focus on data privacy these past years, research actually indicates that consumers are very ready to share their data to gain better experiences.

For example, almost 70% of the respondents in the Twilio survey said they want brands to know more about them, even if that means they have to share more personal data. And other studies have found that 73% of B2B buyers prefer personalized experiences, similar to those of B2C ecommerce. And yet, in the Forrester/Bloomreach study, only 22% of B2B customers say that their most recent online experience was personalized to them. This means there is a massive opportunity for the B2B businesses that do succeed in personalizing their customer journeys.

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5 Steps To Succeed With Ecommerce Personalization

Okay, so we’ve concluded that personalization works. But also, that it can be tricky and that measuring its impact presents a challenge. What does it take then, to succeed with this endeavor, and reap the rewards of a successful personalization strategy? How do you use ecommerce personalization to increase sales, drive recurring revenue, and build brand loyalty?

There are several different approaches to this, but they all start with one fundamental mindset shift. If you haven’t already, now is the time to step into the shoes of your customer. For personalization to be successful, it needs to be 100% customer-centric, and you need to look at every aspect of the buying journey through a consumer lens.

1. Stop Focusing On Your Goals (What? Yes!)

The way to successfully implement personalization is to stop focusing on your goals – and start focusing on your customers’ goals. What are your customers looking to achieve, and how can you help them achieve it as quickly and smoothly as possible? This is the essence of personalization: the aim to understand, in-depth, the needs, goals, and aspirations of your customers.

It’s about allowing every potential customer to connect with your brand when, where, and how they prefer. And it’s about helping them reach their goals at every stage in the customer journey.

2. Identify Your Target Audience

Once you have the consumer lens on, start by understanding which customers you’re trying to serve. To do this, you will need to thoroughly analyze your segmentation and targeting data to identify your most valuable customers and their preferences. Based on this information, you can then go on to create target profiles and start matching customer shopping experiences to individual expectations across touchpoints and channels.

3. Define Your Objectives and Set Your Strategy

When you’ve identified your target audience and know the profiles of the customers you are serving, it’s time to define your objectives and determine your personalization goal metrics. Based on those, you can start building your strategy and set the foundation for the actionable next steps.

4. Choose The Right Technology

When you have your customers identified, your objectives defined, and your strategy in place, it’s time to start looking at technology. What tools and platforms will you need to create truly personalized customer experiences?

The foundation of all ecommerce personalization is data collection. And for successful and meaningful data collection, you need to understand:

  • what data points to track.
  • who you are tracking and why
  • when you track data (which most often is in real-time)
  • what tools and platforms to use for data collection

This is not as easy as it may sound. There’s a wide array of tools on the market, and evaluating them to find the right ones for you can feel like a daunting task. Getting this step right will be crucial for your success onwards, but many businesses end up not finding what they need or investing in the wrong things. According to a Forrester survey, as many as 53% of digital experience professionals say they lack the right technology to personalize experiences.

5. Leverage AI and Machine-Learning

All best-in-class personalization platforms are driven by artificial intelligence and machine learning. These technologies allow you to track on-site and customer data points in real-time. Vaimo works with partners who can help you deliver these personalized shopping experiences to meet your customers where they are.

Nosto, a partner of Vaimo, analyzes customer behavior, learning their likes and dislikes, and enables automatic personalized product recommendations, triggering emails, pop-ups, and Facebook ads in real-time, for each individual shopper. This results in happier customers who buy more and have longer lifetime value.

Related Reading: What Is An Ecommerce Technology Audit?

One Platform–Or Many Integrated Tools?

There are many different personalization tools and technologies available on the market, and they can be combined in a number of different ways. Which is the best alternative for your company depends on the size of your business and on where you are on the personalization maturity curve. Your personalization technology stack may consist either of one single platform or a set of different and integrated personalization tools. If, for example, you have sufficient budget to afford a platform like Adobe’s Experience Cloud, you may not have to worry about investing in other tools, as all you need is most likely included.

However, you may prefer a more customized setup catering to your specific needs. And even established businesses often choose to go with several different providers, where each is an expert in their niche. Examples of tools that can be combined into a custom tech stack include:

  • Product recommendation engine
  • Dynamic pricing software
  • Intelligent site search
  • Conversational commerce bots

When choosing a solution for your ecommerce personalization, there are different routes you can take. You can opt for self-service software, such as Google Optimize. You can choose to work with an agency. Or, you can go for a managed solution that gives you access to both the technology and the human resources, including account managers, designers, technical engineers, and digital consultants.

Whichever option you decide to go with, make sure that your personalization provider will provide the following features:

  • Customer data capture
  • Customer segmentation
  • Real-time optimization
  • Rules-based and predictive personalization
  • Testing algorithms
  • Multiple channels
  • Seamless integration with your ecommerce technology stack.

How Vaimo Can Help

If you’re looking to design a personalized customer journey, our team is here to help. We can work closely with you through all of the steps we’ve outlined above, to take your ecommerce customer experience to the next level. Reach out today for a consultation and learn more about the work we do.

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At Vaimo we help brands, retailers, and manufacturers all over the world to drive success in digital commerce. Reach out to us if you want to hear more about how we can improve your customer experience strategy, go to market plan or explore how technology can enable success.