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8 MISTAKES IN PERSONALIZATION Delivering revenue through a better customer experience A Kibo eBook for eCommerce Professionals.

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Page 1: 8 MISTAKES IN PERSONALIZATION - Kibo Software, Inc · PDF file8 MISTAKES IN PERSONALIZATION Delivering revenue through a better customer experience A Kibo eBook for eCommerce Professionals

8 MISTAKES IN PERSONALIZATIONDelivering revenue through a better customer experience A Kibo eBook for eCommerce Professionals.

Page 2: 8 MISTAKES IN PERSONALIZATION - Kibo Software, Inc · PDF file8 MISTAKES IN PERSONALIZATION Delivering revenue through a better customer experience A Kibo eBook for eCommerce Professionals

© 2016 Kibo Software, Inc.

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It’s All About You

Building Loyalty

Personalization Defined

The Benefits of Personalization

The 8 Mistakes

Mistake #1 Living and dying by profiles

Mistake #2 Building your personalization strategy on rules alone

Mistake #3 Thinking like NASA

Mistake #4 Waiting for ‘one to one nirvana’

Mistake #5 Looking backward instead of forward

CONTENTS

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Mistake #6 Forgetting the power of search

Mistake #7 Thinking of personalization as an accessory

Mistake #8 Limiting personalization on your site

Conclusion

Let’s Recap

Learn More

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8 Mistakes in Personalization © 2016 Kibo Software, Inc.

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IT’S ALL ABOUT YOU

Your sister just had another baby. Nice. Now you’ve got a dilemma.If you go to your favorite eCommerce website and buy her that little set of onesies, you’ll never hear the end of it.

Because every time you come back to the site, you’ll be besieged by “Little Me Layette Sets,” bodysuits, blankets and tiny, reversible hoodies.

‘Honestly, folks, it was just a one-off. I’m still into Nirvana.’

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© 2016 Kibo Software, Inc.

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BUILDING LOYALTY

It’s not like it’s a new idea.The vision of personalized shopping experiences has been around for years. But for many online merchants, the promise is still far from the reality.

Clearly, something is holding marketers back from delivering the relevant, timely, highly personalized web experiences that all of us shoppers want these days.

This eBook is about these obstacles—and the things marketers like you can do to overcome them.It’s based on our experience in helping some of the world’s most successful online brands deliver highly personalized experiences by using our SaaS solutions built specifically for eCommerce.

The idea is simple: the more personal and relevant your interaction is with a shopper; the more engaged they will be on your site. The more engaged they are, the more likely they are to buy. The more they buy, the better your results. The trick is to engage in a way that recognizes the shopper’s intent, at any given moment. It’s all part of our personalization solutions. But more on that later…

We’re into the second decade of the 21st century. Why do so many retail websites still fail to establish a personal relationship with their shopper?

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© 2016 Kibo Software, Inc.

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PERSONALIZATION DEFINED

Let’s start by taking a look at what you know about your shopper.Most shoppers are first time visitors to eCommerce sites and are completely unknown. A small subset is known as they have spent some time on site in the past and engaged with products. The rare few are named customers who have a purchase history or maybe even a log in. Instead of treating everyone exactly the same, relevant personalization is about leveraging important clues about each visitor, what pages they visit, how much time they spend there, how they get there, the search terms they use to find items and for the named visitor, their past behaviors like recent purchases.

But to really engage a visitor, you must add an important dimension to the traditional personalization: context. While a profile tells you who is visiting, contextual clues tell you why they’re there now—an important psychological factor in customer engagement.

Traditionally, personalization has meant: Serving specific content to a web visitor based on the things you know about him or her.

45-65%Greater Engagement

with personalized recommendations.

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8 Mistakes in Personalization © 2016 Kibo Software, Inc.

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THE BENEFITS OF PERSONALIZATION

Increased conversion rates:However you define conversions—revenue, downloads, sign-ups—the right personalization will dramatically improve them.

Bigger orders:When they see what they want, visitors buy. And when you help them discover the perfect products and accessories—along with content and stories that explain them —they buy more.

Happier customers:When they find what they are looking for, shoppers feel satisfied. Happy customers tell their friends, make fewer returns, and come back to shop with you again. So the big metrics that drive customer lifetime value go up. Whether looking for a specific product or a piece of content, satisfying the shopper is what it’s all about. Whether it is B2C or B2B, a product or a content transaction—shoppers love satisfaction.

Typically, we see personalization improve average order values by upwards of 40% and conversion rates improve by 400-600% depending on retail segment.

Dan DarnellVice President of Product Marketing, Kibo, Inc.

Done correctly, personalizing your customers’ online experience delivers significant benefits that can be grouped into three big buckets:

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8 Mistakes in Personalization © 2016 Kibo Software, Inc.

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Here are eight of the top personalization mistakes and misconceptions we’ve seen repeated over and over again. Some may seem obvious;

others might be new to you. Either way, in this day and age, they are all avoidable…

THE 8 MISTAKES

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© 2016 Kibo Software, Inc.

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1 LIVING AND DYING BY PROFILES

Think about it:If you’re marketing effectively, a large proportion of your web traffic is new visitors; people you have no data on. But that doesn’t mean you know nothing about them. In fact, if you’re looking, you can pick up dozens of clues from each session. We call these contextual clues because they tell you what the visitor is trying to do—and they’re available to you whether or not you know the name, address and shoe size of the visitor.

Once you’re tuned in to clues about the shopper’s current intent, adding in any profile data available can be quite valuable. But use profile data alone and marketers run the risk of alienating shoppers by treating them as if they are only living in the past.

Understand IntentThink about the clues your web visitors send out as they click through your site—what terms do they use to search, what items do they engage with, what does the click path look like as they navigate from here to there? Now think about how you can leverage these even if you don’t yet know the visitor.

Most marketers think you need detailed profiles or segmentation to personalize. They’re wrong.

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8 Mistakes in Personalization © 2016 Kibo Software, Inc.

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2BUILDING YOUR PERSONALIZATIONSTRATEGY ON RULES ALONE

They multiply like rabbits.

Rule stacks start growing on day one and never stop. That creates a management headache that grows, too.

They clash.

As rules multiply, they start disagreeing with each other. These conflicts impede your ability to optimize site revenue and conversion rates.

Their uplift degrades.

Because of the above dynamics, the benefits of rule-based personalization tend to diminish greatly over time.

The best case scenario is where you take a machine learning system and ask it to optimize for the KPI you care most about and let it run. But not all organizations are quite ready to trust machine learning alone. So merchandising rules should always be available to be used sparingly for exceptions (like promotions), to hard-wire key business rules (like blocking licensed content from some territories), and to target visitors based on explicit profile data. But rules alone will seldom deliver the results that math-based machine learning systems provide.

The problem is that, on their own, personalization rules don’t work. Here’s why:They’re labor and expert-intensive.

Not every retailer can afford their own tech-lab and data scientists. We shouldn’t all have to grow our own personalization solution.

They go out of date quickly.

eCommerce is changing so fast that merchandising rules need constant tweaking and testing. Out-of-date rules inhibit conversion.

Many personalization tools are just digital rules engines. Rules like “If a shopper does this, then offer that” are created by experts who, ideally, understand both technology and the ins and outs of your business.

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© 2016 Kibo Software, Inc.

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3THINKING LIKE NASA

If that’s your approach, check your assumptions at the door.With today’s Cloud-based solutions, personalization is usually deployed quickly, requires some, but not much support from IT, and in some cases, comes with a simple, intuitive user interface so that your merchandising teams are effective immediately and able to deliver measurable ROI within 90 days.

First-generation personalization solutions were like first-generation CRM tools. Designed for the power user with a heavy dose of IT support required, personalization 1.0 was not ready for the fast paced world of eCommerce today. Times have changed and personalization

solutions either work with you to accelerate your time to productivity, or they die. If it’s all about increasing revenue, conversion, engagement and average order value, then empowering the merchandiser without heavy IT lifting is job number one.

The Power of DataThe best guide for accurate personalization is the thousands of shoppers that have already visited your site. Machine learning systems ask “What did likeminded shoppers do? What was their intent? What products or content helped them to fulfill their need?” This data is directly absorbed into the models and algorithms of a big data platform to predict relevant personalization. It is rocket science, but it feels more like magic.

A lot of eCommerce executives think personalization is a massive exercise requiring a big IT implementation, an overhaul of people and processes, and of course, a new eCommerce platform.

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8 Mistakes in Personalization © 2016 Kibo Software, Inc.

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4WAITING FOR ‘ONE TO ONE NIRVANA’

Patterning is so much more than tracking clicks.The sweet spot for understanding intent is to focus in on what people are really engaging with. Paying attention to the patterns of shopper engagement activities like page views, dwell times, mouse movements, scrolls and video views gives you a ton of insight into what your shoppers are really looking for. These insights accurately predict new visitor behavior and offer an experience that is feels personalized from their first

click. Tracking these activities also offers priceless intent clues —as long as you can detect and act on them in real time.

Responding to these micro-behaviors while the session is still live is where the real uplift comes from personalization. Waiting for a purchase so you can adapt the next visit is too little, too late. Using predictive modelling, personalization capitalizes on real shopper engagement patterns and delivers content or products tailored to that shopper before they ever have a chance to click away.

Many confuse personalization with treating each shopper uniquely: one to one. It’s a nice thought, but actually really hard to do. The truth is, people are more alike than we think—it’s our patterns that make us unique. That’s why aggregating shopper pattern data delivers a personalized interaction that feels genuine to each shopper.

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© 2016 Kibo Software, Inc.

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5LOOKING BACKWARD INSTEAD OF FORWARD

If you’re using your experts to analyze thousands of web sessions, slice and dice the data, generate insight and create rules to capture that insight, you’ll never be as responsive or as profitable as you need to be. How will you understand what your customer needs today if you are only looking at what they wanted last week? It’s time to get over the ‘insight lag’ that plagues so many digital commerce initiatives.

Be here now.Instead of getting experts to analyze spreadsheets and look for patterns, the system itself should harvest insight from all the micro-behaviors taking place on your site—right now—to determine intent and deliver the best content for each customer in the moment.

Just as importantly, your personalization solution should dynamically monitor the results and automatically improve over time. There’s just too much data for humans to track these days. Let the machine learning and big data systems do the tracking and your rock star analysts and merchandising pros focus on adding value at a much higher level.

Data analysts and merchandisers who understand eCommerce are worth their weight in gold. They also tend to cost their weight in gold—and for good reason.

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8 Mistakes in Personalization © 2016 Kibo Software, Inc.

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6FORGETTING THE POWER OF SEARCH

By augmenting your basic on-site search, marketers start to understand product affinities better and improve overall site navigation.Does your site refer to that black clutch as a handbag, a pocketbook or a purse? Probably not, but your shoppers do. On-site search should help you to make a logical pairing between shopper vocabulary and your product descriptions.

Find-ability is a critical element of a great customer experience:Whether on the web or on your site, if customer experience is important to you, don’t forget the power of search.

Valuable InsightAnalyzing your on-site search activity is a powerful guide for SEO and search marketing. Understanding how people search on your site can help you discover new keywords, improve paid search reach and boost natural search performance as well as helping your shoppers to find what they are looking for easily and in their own language.

Search is one of the most powerful intent signals any user can transmit both as they navigate to your site, and while on your site. But most websites (and many personalization platforms) ignore it completely. It’s a simple concept: the search terms shoppers use should be a primary driver of the content they see. Whether it’s natural search or pay-per-click, the search term is a big, bright, neon sign that says, “I’m looking for X.” To ignore it and serve up generic content is well, opportunity lost.

A strong homepage with key features like clear product categories and helpful on-site search are essential to ensuring that customers who land on any given page can find exactly what they are looking for.

Must-Have eCommerce Features, Forrester Research, Inc., March 10, 2016.

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© 2016 Kibo Software, Inc.

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THINKING OF PERSONALIZATION AS AN ACCESSORY

eCommerce growth continues to surge and great retailers are taking advantage of this trend to grow revenue and profitability. A big ingredient? Investing in initiatives that improve the customer experience like better product detail pages and personalization.

From improved layout and photography, to more compelling product and content recommendations, the product detail page is where conversions happen.

It’s that relationship thing.Relevant, engaging content keeps your shopper on your site longer. And, when that content meets the need of that shopper, believe it or not, they get this great feeling of satisfaction. It’s almost like winning at a game of Concentration. Thoughts like “I found it!” and “I solved my problem!” go through their mind and at the end, they have you to thank.

Take this powerful psychology and marry it with a really well designed product page and you have the beginning of a lifetime customer relationship. The combination works so well, that savvy eCommerce execs deploy personalization as broadly as possible across all of the touch points where they interact with shoppers. Personalization is now so ingrained and expected by shoppers that it is a modern day necessity.

You wouldn’t dream of running your site without a powerful eCommerce platform right? If conversion is important to you (and revenue, and engagement and CTRs) then personalization should be at the top of your to do list if it isn’t already.

62%One retailer saw greater

engagement rates climb when they added recommendations

to product detail pages.

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© 2016 Kibo Software, Inc.

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LIMITING PERSONALIZATION ON YOUR SITE

Great retailers know that there is a lot of psychology involved in effective marketing. Creating affinity to your brand, making the relationship personal and capitalizing on shopper impulse—these are time-tested tricks of the trade. The best personalization strategies use what you learn from all of your shoppers—known or unknown—to make personalized recommendations in each interaction—from product detail pages, to category pages, cart pages, the home page and even landing pages so that each visitor finds relevant products and content.

Shoppers see you as a single brand regardless of how or where they find you. Be sure your personalization approach covers all of the bases—mobile, email and onsite.

Your website is where shoppers from all parts of the globe and all walks of life can find you. Why not treat them like the loyal customers you hope they become from minute one?

8The ability of this solution to intelligently introduce our customers to relevant products across our ever growing assortment made Kibo a superb choice to augment our internal expert recommendations.David Markle, Director of Site ExperienceHayneedle.com

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© 2016 Kibo Software, Inc.

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CONCLUSION

Think automation. Think real-time.

Think responsiveness.

Think fast, light deployment.

Think patterns and predictability.

If we only leave you with one thought, it should be this: serving customers’ immediate needs always pays dividends. Today’s eCommerce marketplace demands that you identify customer intent fast, deliver a satisfying experience to your shopper and respond more effectively.

You’re ready to improve your eCommerce personalization. Whatever you do, don’t repeat the mistakes of the past.

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© 2016 Kibo Software, Inc.

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LET’S RECAP

We’ve also seen that eight common mistakes are holding eCommerce professionals back from harnessing the power of web personalization:

Over-relying on profiles – instead of actual intent.

Depending only on rules – instead of being guided by like-minded peers.

Thinking everyone is special – instead of seeing how we are really more alike.

Mis-using your experts – instead of automating the task and freeing them to add real value.

We’ve seen that web personalization can strap a rocket to your conversion rates; keep buyers coming back for more; and drive improvements in all other channels. But only if you do it right.

Making personalization a second class citizen – it’s expected by your shoppers, so move it to the front of the line.

Limiting personalization to the PDP – it’s a site wide expectation, so deploy it wherever you can.

Some of these may sound obvious, but in our experience with more than 400 website deployments, they’re still incredibly common.

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© 2016 Kibo Software, Inc.

Kibo empowers retailers and branded manufacturers to achieve optimal performance of B2C and B2B commerce through

unified consumer experiences. With more than 40 years of innovations, Kibo provides a complete omnichannel commerce

platform delivered with the lowest total cost of ownership and the fastest time to market. By leveraging Cloud technologies,

individualized buying experiences, and true enterprise scale, Kibo enables you to reach higher peaks of sales and consumer

loyalty. No matter the challenge, Kibo powers your success.

To find out more about Kibo, call 877-350-3866

or visit our website at www.kibocommerce.com

LEARN MORE

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