Common reasons why personalisation fails

Common reasons why personalisation fails

Customer Experience

Customers want to feel valued throughout every stage of their shopping journey

In a highly competitive marketplace, a great customer experience can be the thing that sets you apart – and today’s customer wants to feel important and valued throughout every stage of their shopping journey. To meet the growing appetites of your diverse global customer base, you can now personalise their experience at scale, delivering individualised recommendations to thousands of customers in real-time, anywhere in the world.

And why not? 

When executed well, personalisation in eCommerce delivers excellent returns. In its most simple format, personalisation is the process of tailoring an experience based on customer insight and behaviours – it’s the oldest trick in the book – to ‘know your customer’.

At the very least, it ensures that your offers are relevant to your customer and helps build a stronger relationship with your brand. Research from McKinsey found that brands that excel at personalisation deliver five to eight times the marketing ROI and boost their sales by more than 10% over companies that don’t personalise. 

 

Personalisation strategy

Report

Evolving Digital Commerce Report 2022

So, if it is such a winning strategy, why are there so many companies failing to embed a valuable personalisation strategy across their customer’s buying journey? The fact is that personalisation and site optimisation are complex challenges that can often deliver poor results. 

In our recent report, 74% of respondents across both retail and B2B said their organisations offer a personalised website and mobile app experience but acknowledge that implementing a good strategy is not without challenges.

In this article, we take a look at the most common reasons personalisation can fail and how to remedy the most common issues.

1. Our favourite shop should know us

Delivering personalisation that customers value

Essentially personalisation is about marketing your various services, and product offers to customers in a truly relevant way. Research shows that 40% of online shoppers leave stores because they get frustrated with the irrelevant offers and choices. Despite this, personalisation can often be seen as ‘fluffy’ and a one-dimensional brand exercise. 

Making the process truly valuable means you need to think well beyond offers and promotions. Personalised messaging, history and steering should flow throughout the entire omnichannel buying journey – from ads and suggestions, right through to fulfilment and delivery – on any device, through any stream, at any time. 

Advances in processing data mean we have the possibility of creating a deeper, more dynamic relationship with our consumers.

When done well, we (as consumers) may not even recognise how sophisticated the use of our data has become and take for granted that our favourite shops should ‘know’ us and what we like. For example, 55% of the respondents in our report area offering delivery preferences already selected and website landing pages as personalised elements on their websites - simple, but highly effective way to make life easier for your customer.

For example, supermarket giant, Tesco, has been using the data from their Clubcard for years. With this, they can collate information on every shop - showing returning customers effective product recommendations based on both their online and offline purchase history at all stages of their online shop. 

2. Right data collection and analysis

Data issues

Great personalisation is only truly valuable when it is built on excellent customer data and clear segmentation strategies. But that is easier said than done for some brands.

At KPS, the most common issues we see include:

  • Achieving a single customer view – You should be aggregating customer data from all of your customer touchpoints and giving a 360 view of your customer.
  • Disjointed data – Connecting the customer journey and adding personalisation at each stage is key to delivering an exceptional experience - so your data needs to be seamlessly interconnected too. 
  • No insights – Does your data tell you what you need it to about your customer. The questions it most needs to answer are: what content should we be creating, and which segments should we personalise to?
  • Messy data – Untidy data gives rise to errors and irrelevant information for the customer – making the whole notion of a personalised experience null and void.
  • Collecting useless data – Are all your platforms collecting the correct information to deliver the same level of personalisation across all points in the customer journey? You need to identify what data helps you target your customer at each step in the most valuable way. 

Get your data collection and analysis right, and you can deliver value in spades. Changes in trends and advances in data processing, especially around how data is stored and analysed, have given rise to the far more refined: 'hyper-personalisation' – and those who have mastered this, are already streaks ahead of the competition.

Personalisation : Netflix

To understand this concept, stop and think of the way Netflix works

Not only can they recommend the shows you like through their understanding of the most relevant filters, but they can also tell you in advance when shows are returning and make sure you don't miss when your favourite cast members feature elsewhere. 

They have taken that knowledge one step further - where they produce their own shows based on what customers like. For example, to decide on its flagship production, House of Cards, the brand analysed data about consumer viewing preferences.

That concept should be easily replicated in eCommerce – but only if your data is collected and used in the right way.

3. Deliver exceptional experience with AI

Manual work

To create that same, intelligent and ever-changing experience (mass customisation) for large groups of customers and yet uniquely tailor the experience to each individual, even sounds like an awesome challenge. It's certainly not one that can be achieved with manual work.

Even the most brilliant of data scientists will ultimately fail. There are simply too many rules to write, too much data to manipulate and too much content to create to ever handle personalisation at scale without AI.

Using AI, especially when combined with a CRM, brands can provide customers with personalised offers and services based on demographics, purchase history, historical purchases and browsing habits. Machine learning algorithms can run through large scale, constantly changing data sets and predict which products a user wants to see next. When used in combination, data insights and AI can help you offer relevant cross-sells, make recommendations, and show special offers at every touchpoint to increase the average order value.

We take it for granted now, but sophisticated AI has always been the secret behind Amazon's success - and let's face it, it's their influence on personalisation that now pushes all eCommerce retailers to work harder to deliver exceptional experience consumers expect as the norm. 

Personalisation touchpoints

4. Build customer relationship

No revenue impacts

When all is said and done, the holy grail of personalisation is ROI. If implemented in the wrong way, marketers and merchandisers will struggle to prove the direct value of personalisation. We've seen this time and time again - and as a result, companies abandon their efforts and favour other initiatives such as site speed. Although these features are important, but if personalisation is done right, it can be a lot more beneficial in the long run.

With the growing number of channels, communication tools and customer touchpoints to personalise, tangible revenue impacts from your efforts can become a challenge to prove. 

But when executed well, personalisation delivers far more than that.

In its most simple formats, eCommerce personalisation is how effective your website meets your customer's needs and how you build your ongoing relationship with them.   

 

So, to understand the true value of your personalisation strategy, you need to ask yourself:

  1. Does it save the customer time? - Customising messages and offers based on where your customers are in their journey will improve their experience. Ultimately, this limits frustrations that cause drop-outs and helps drive them to the buying stage in a shorter space of time.
  2. Is it boosting your conversion rate? - A solid approach to eCommerce personalisation can contribute to more sign-ups, improved lead generation, and if you generate accurate product recommendations, it converts into significantly higher sales volumes. 
  3. Has it improved customer interaction and relationships? - In learning more about your customers, you can directly meet their needs, interests and desires. Personalised experiences should always lead to more meaningful interactions, thus boosting your company reputation and the customer’s brand affinity.

Getting a strategy that works

At KPS, our history of working with large global retailers with a complex mix of data sources and diverse customer segments, has allowed us to become specialists in helping you personalise at scale and with agility.

Using a consultancy approach and understanding your markets, competition, and brand, we can effectively introduce personalisation across multiple touchpoints - completely customising the user experience, at any point in their buying journey, anywhere in the world and through any channel.

Want to know more? Join us for our webinar on 6th April 2022 or read our report, Evolving Digital Commerce, HERE.  

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