How to Plan and Manage an eCommerce Website Personalization Strategy

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E-commerce has grown into a saturated market. Nowadays by the time visitors have landed on your eCommerce website they’re likely to have seen similar products to yours in a number of different styles, varieties and prices, and all being offered by a multitude of different brands. 

So how can you differentiate your website from your competition to better engage and convert visitors?

The answer is  website personalization. Along with website personalization, you also need to pay attention to email personalization as the recipient feels more connected and willing to do business with you in the future, as revealed by Elluminatiinc.com. Especially in eCommerce, implementing a personalization strategy enables your brand to create a much more meaningful experience that is highly relevant to your visitor’s needs at any given moment. 

When it comes to eCommerce, implementing a personalization strategy enables your brand to create a much more meaningful experience that is highly relevant to your visitors needs at any given moment. Not only that, it can anticipate their wants, resolve their pain points, and reflect their behaviors and values.

Despite website personalization being an incredibly powerful tool, research from McKinsey indicates that around only 15% of eCommerce retailers have implemented successful personalization strategies. 

The reason for this is that most businesses fail to plan a clear strategy that includes in-depth analysis capable of identifying who their customers really are and what they truly want. 

So in this guide, we’ll do just that. By the end you’ll have a clear understanding of why your site needs a personalization strategy, what essentials your strategy needs, and finally how to plan, implement and manage your successful eCommerce website personalization strategy.

3 Reasons Why Your eCommerce Site Needs a Website Personalization Strategy

Online shoppers now have so much choice that their priorities have changed when it comes to selecting which brand to purchase from. 

Shoppers now seek tailored and relevant communication above all else, which means they’re willing to share more and more personal information to brands if they believe it will be in exchange for a higher quality experience. 

It’s this exchange of value that brands can leverage to enhance their customer journeys, convert visitors to shoppers and build long-term relationships capable of transforming shoppers into loyal customers: Three factors which are all essential in achieving financial business objectives.

Here are the three key reasons why eCommerce brands should priorities personalization in 2021 and beyond:

1. Ecommerce Personalization addresses evolving customer expectations

The digital age has exacerbated the need for convenience and context. As consumers we expect everything to be instantaneous and we expect the brands we shop with to cater to our specific needs as well as reflect our values. 

This is where the power of personalization comes in. Personalization enables brands to create contextualized, relevant messaging and create offers that are exclusive to each buyer persona. 

In practice, that means a website can display different offers to different customers based on their interests. For example, tailoring messaging that advertises football related discounts solely toward football fans, as opposed to showing them to skiing fans.

2. Website Personalization increases customer satisfaction

There’s a reason why Spotify and Netflix have a joint satisfied customer base of over 450 million, and it’s because they offer personalized services. Spotify will put together playlists based on a listeners tastes and preferences, whilst Netflix will learn a users favorite genres and suggest relevant TV shows or movies based on those preferences.

Customer satisfaction surveys undertaken by Gladly and Reflection revealed that customers have begun to value personalized experiences ahead of speed, and suggested that consumers receiving those personalized experiences felt more engaged with a brand, leading to higher numbers of loyal customers and brand advocates.

What does that mean for your eCommerce website? The more relevant you can make the experience, and each customer touchpoint, the more likely consumers will be to purchase from you through feeling engaged and connected with your brand. 

And it’s easy: Ecommerce websites can do this simply through learning user behavior and then suggesting relevant products based off of previous interactions.

3. Ecommerce Personalization drives conversions and sales

Personalization strategies which are scalable have been proven to help grocery brands increase their sales by 2%, and the number only increases further for other retailers. Research from McKinsey also revealed that personalization directly yields a 5-15% uplift in revenue. 

Further, personalization strategies which directly intertwine with overall marketing strategies have been proven to cut customer acquisition costs by up to 50%. That makes them a powerful tool capable of driving businesses to meet their objectives. 

The 3 Essentials of a Personalization Strategy

Ecommerce Segmentation

A strong website personalization strategy will cultivate a strong personalized experience capable of delivering long-term success and high ROI, but in order to develop one that lays the foundations of success it needs to meet two criteria and contain three essential elements.

Firstly, a personalization strategy must be data-driven and include insights from both external and internal environments, as well as having clear goals, smart objectives and defined KPIs (key performance indicators).

Secondly, its roadmap should be clear, specific and include factors such as audience segmentation, campaign ideation, prioritization, orchestration and optimization.

Lastly, it should contain the three below essential elements:

  1. Data

Personalization strategies are powered by data. That means that in order to deploy a successful personalization strategy, you need to collect rich data. It doesn’t matter if you’re a pure eCommerce website or an Omnichannel retailer, you’ll have data you can use to your advantage.

Rich data is data that is capable of identifying who your prospective and existing customers are, where they’re from, what their background is, what their values and beliefs are, right down to personal level details such as their hobbies, pain points and interests.

To gain these insights into your target audience, you can use these methods:

  • Website analytics tools like Google Analytics to learn where your visitors reside, which devices they use, which pages they visit, how much time they spend on your website, which pages are high converting, etc.
  • Behavior analytics tools like Hotjar to get a visual representation of which areas of the website visitors focus on, how much time they spend on pages, how they convert, and why they bounce.
  • SEO tools like Ahrefs or SEMrush to discover which keywords drive organic traffic to your page, and to reveal content that will resonate with your prospective customers.
  • Social listening tools like Hootsuite to monitor what your customers are saying about you or your competitors on social networking sites.
  • Primary data opportunities like interviews, research data, quizzes. 
  • Secondary data opportunities like industry reports, third-party surveys, white papers or research studies.

    2. Insights

Data alone won’t help to flesh out an actionable website personalization strategy. It’s the insights you draw from analyzing, grouping, filtering, sorting and visualizing the collected data which can do that. 

To gain insights into their business performance, eCommerce businesses should utilize these channels:

  • Their Website: Businesses can evaluate things like how much traffic the website is generating, from where, whether visitors are new or returning, which pages are popular, etc.
  • Their Email Marketing: Even in simple email tools like ConstantContact and alternatives, businesses can assess the avg. email open and click rates, the time of day their audience seems most engaged and their average email conversion rate.
  • Their Social media analytics: Businesses can determine factors like where the majority of their followers are located, whether they’re city-dwellers or suburban, what their ages, genders, and occupations are, as well as things like which posts get the most likes and which have the highest CTR.
  • Their Paid marketing activities: Businesses can analyze their average ad click-through rates, how much it costs to acquire a customer from paid advertising, and even whether traffic has a higher AOV than those coming from other media channels. You can use an ads manager to manage, optimize and create your Google Ads, Facebook Ads, Microsoft Ads, Instagram Ads, & Twitter Ads on the go.

Insights are powerful because they transform data into something which is actionable and which can lay the foundations of a personalization strategy capable of facilitating effective, personalized targeting.

For example, say your data reveals that a customer X bought Particular Product Y six times in the last month. Once you’ve analysed that initial dataset, it might reveal that the product purchased is a healthy energy drink. This then provides accurate insight that the customer likely leads an active lifestyle and is health-conscious.

Now that you have that insight, it can be leveraged to personalize their shopping experience by recommending other products, services or downloadables like recipes which are designed to be health-conscious and support an active lifestyle.

    3. Goals, Objectives and KPIs

Without set goals, objectives, and KPIs you will have no way of knowing whether or not your website personalization strategy is working. To define these, here’s a quick overview: 

  • Goals are statements of things you ideally want your strategy to achieve.  
  • Objectives are concrete steps that can help achieve the goal. They should follow the S.M.A.R.T criteria (Specific, Measurable, Actionable, Realistic, and Time-bound).
  • Key Performance Indicators (KPIs) are specific measurable values, or metrics, which will indicate the progress toward achieving the businesses objectives.

To easily determine your goals, objectives and KPIs you can use the following formula:

Based on [INSIGHT], I will [OBJECTIVE] as measured by [KPI] to achieve [GOAL].

For example, “Because Product Page Y experiences 90% bounce, I will improve the product page design and measure the click-through rate of CTAs to increase conversion rates in my eCommerce store.”

The 5 Steps to Planning & Managing Your eCommerce Personalization Strategy

Now we’ve got a general understanding of the basis of a successful personalization strategy, it’s time to put that into action and build a roadmap capable of delivering meaningful and personalized experiences.

At the end of these 5 steps you’ll have a deployable strategy with inbuilt management features, which will enable for easy tweaks along the way.

Step 1: Segment

Building a personalization strategy without audience segmentation is impossible. Segmentation enables you to identify groups of consumers that share common characteristics, and then enables you to target those groups specifically with tailored messaging. 

Failure to segment will result in messaging that is generic and devoid of the relevant engagement your strategy should be delivering.

Use these parameters to start segmenting your audience:.

  • Demographically: Segmentation based on personal information like, age, gender, income and occupation.
  • Geographically: Segmentation based on physical geographical location. 
  • Behaviorally: Behavioral segmentation based on website interactivity, purchase history and frequency, etc. 
  • Psychographically: Segmentation based on personal values, hobbies, interests, opinions, etc
  • Acquisitional: Segmentation by acquisition channel and/or marketing campaign. 
  • Technographic: Segmentation by customer use of technology, i.e device.
  • Firmographically: Segmentation by industry, including the number of employees, the net revenue, etc. 
  • Algorithmically: Segmentation by automated segment discovery or predictive targeting.

Your market segmentation will vary in complexity depending on where you are in your personalization journey. 

For example, for those new to a strategy the easiest way to segment would be by location or demographics. Later on, to achieve higher relevancy, that could be expanded to include geographic, demographics, behavioral attributes and psychological characteristics.

Step 2: Brainstorm 

Once you’ve got your initial audience segments, you can begin to get creative! Now you’ll need to brainstorm campaign ideas that are relevant to your groups. Some ways to get started are:

  • By offering relevant and related product recommendations on checkout or product pages.
  • Adding real-time social proof elements such as reviews or videos to product pages. 
  • Showing interactive elements like spin-to-win popups to new website visitors to promote an exchange of value.
  • Inviting return shoppers to fill out surveys that ask specific questions relating to their experience.
  • Showcasing progress bars toward loyalty incentives like discounts or exclusive pre-sales.

Step 3: Prioritize

Once you’ve got some campaign ideas, you’ll need to sort through them to identify the ones that are likely to bring in the most value in the shortest amount of time.

To prioritize, use one of these methodologies: 

  • PIE framework: The most popular prioritization method includes three variables: P for Potential, i.e how much improvement could be made on product pages. I for Importance, i.e how valuable is the traffic visiting the page, and finally E for Ease, i.e how complicated will the work be to implement. 
  • ICE score: The ICE method also considers 3 variables: Impact, i.e what will the impact be if my idea works, Confidence, regarding the level of confidence that the idea will work and Ease, regarding how easy it will be to implement. 
  • PXL model: The PXL method asks questions. Examples include: Will the change be noticeable in under 5 seconds? Do the changes add or remove anything? Will a test run work across pages that bring in high traffic? 

Step 4: Design and Deploy

Step 4 is the most crucial step of them all as it’s where your personalization strategy will begin to take shape. There are now an abundance of on-site messaging tools including embedded forms, pop-ups, overlays and sticky bars, which means it’s up to you to find the one that will fit the message you’re trying to convey.

For example, a navigational campaign on the homepage could be implemented with a sticky top bar. A time-bound promotion would then enable a countdown timer to be installed on the top bar to instill urgency. Likewise, If the goal was to minimize product page abandonment, implementing real-time social proof like social media likes, reviews, or testimonial videos could help to begin building trust.

There is no one size fits all personalization campaign as each strategy is bespoke and will be tailored to individual KPIs that are designed to achieve set objectives.

However there are best practices to follow that will make the setup of your personalization strategies easier. One is the 6-W framework:

  • Why: This question should already be answered by the set goals and objectives of the campaign. 
  • Who: This is the customer segment that will be targeted with the personalized campaign.
  • What: What is the campaign about? i.e a flash sale or offer.
  • When: The timeframe in which your campaign runs and ends.
  • Where: On which channel will it be running? i.e if it’s the website, which pages will it appear across? 
  • How often: The frequency in which your customers will see the campaign during their sessions.

Step 5: Test, Measure and Optimize

Once your personalization strategy is deployed, it’s time to measure that it’s working and generating ROI (return on investment). To do this, you’ll need to run various tests such as A/B testing or multivariate testing to get an in-depth understanding of your personalized campaigns.

Data-driven approaches to personalization strategies which help you to quickly identify which campaigns are valuable and scalable, and which need closing or tweaking.

In Summary

Personalization strategies are a tool used by a plethora of online brands because they help to create relevant experiences capable of building solid loyal customer bases, and boosting revenue. Now that you have your own strategy outlined, it’s time to take advantage of personalization and use it to grow your business.