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From Catalogs To E-Commerce: Using Personalization To Deliver Customer Loyalty

  • Written by  Emre Baran, Qubit

0aaaEmre Baran QubitIn Venice in 1498, publisher Aldus Manutius created a catalog of the books he was printing.

15th century Europe was going through a publishing revolution. The invention of the Gutenberg press and movable type in the mid-1400s opened a world of mass printing. By the end of the century, there were 417 presses just in Venice — one of the major printing centers — and the output of the western European printing industry had reached twenty million volumes.

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With a (comparatively) immense range of books available, the catalog must have been a helpful marketing mechanism to Manutius. This was an industry, a new medium, skyrocketing. And Aldus Manutius, whose business was the new medium, used this new medium to better serve his customers and his business.

So that was (possibly) the first catalog, ever. And from there, catalogs went on to become mainstream for centuries.

Why did catalogs work so well?

  • They combined a comprehensive list of available products with product information and pricing.
  • They made all this information available to customers in an easily accessible and convenient way.
  • They also established a two-way relationship between vendors and customers, spreading a single transaction out into several different interactions: sending the catalog; the mail-order purchase; delivering the product; and then, next month, quarter or year, sending the next catalog.

The Decline Of The Catalog And Rise Of The E-Commerce Web Site

The rise of the Internet and the emergence of the web site signalled the end of the catalog’s dominance of customer-convenient retail. And now, e-Commerce is ushering in seismic change for brick-and-mortar stores.

There’s a familiar metaphor of a web site as a brand’s shop window. But that’s not quite big enough. Approximately 90% of today’s e-Commerce web sites are not too far away from simple and ancient catalog businesses. The web site is convenient for your customers, combining your product catalog, price list and order form. But it can do a whole lot more.

The “more” that the web site can do (which the catalog cannot) are the little relationship touches writ large. A salesperson might send out a catalog with notes and tabs “This range is brand new,” or “these would go really well with the X you bought last month…” but producing an entirely different catalog for every single customer (or even customer group) is cost-prohibitive in the world of print. Similarly, it would be ridiculous to alter the layout of a brick-and-mortar store and (for example) hide away all the clothes in the wrong size for each new shopper to walk through the door.

But on the web site, personalization becomes possible at scale.

This is because it impacts every element of a brand’s business and affects every stage of the customer journey. The web site isn’t just a channel for customer acquisition teams, it’s also a tool for teams whose remit is customers’ retention and ensuring their ongoing engagement.

But modern consumers have high expectations when it comes to their relationships with brands. They expect to be remembered, to have their preferences catered for, to be valued. Otherwise, they won’t come back.

Personalization And Loyalty

Approximately 70% to 80% of customers are one-time purchasers, only around 20% repeat, according to our research. And, just like the Pareto principle dictates, these 20% of customers drive the top 80% of revenue.

For many brands, loyalty and retention are the biggest issues. That’s where personalization really can play a major role.

Personalization is about getting the right message in the right place at the right time, to the right person. It’s entirely contextual. Web sites give you context: you know what customers do on your site, and when. You can see their preferences. Then, you can use that insight to present a visitor with new and relevant information that they want and can use. Personalization is also about having the sort of relationship where visitors trust brands to give them relevant experiences.

But most importantly, personalization is about trust. It is about building a relationship where customers are happy to share their preferences and opinions, and for brands to use that insight to curate experiences, across the entire customer journey. And that includes post-sale.

Brands can use personalization to turn that post-first-purchase period into the pre-next-purchase period. To deliver great experiences and customer service, to become habit-forming and delightful for customers

Top tips for implementing a great personalization strategy include:

  • Collect relevant data points according to your business goals and customer journey.
  • Make sure you take the time to understand your data, create hypotheses and test them.
  • Have a way to use the data in real time (at the right time, the right place and with the right message).
  • Set metrics for how you will measure success.

How Do You Create A Personalization Program Built On Trust?

A personalization project is about freeing up data and putting it into action.

Segmentation is an intrinsic part of personalization, and what makes it scalable. When you’ve got the tools to tailor how you treat one group of people, the marginal cost of curating experiences for the remainder is trivial. Given this, brands should look at creating a meaningful segmentation strategy. Then, you can look at delivering personalized experiences that are tailored to each customer group.

Like the Aldus Manutius catalog, it’s about brands being able to serve their customers, and their businesses, better. About providing all the information customers want, in a contextual, relevant and convenient way. About building two-way, ongoing interactions.

And for that, you need the data points that tell you when and where to act: insight into what your customers want, and what they like. What’s next on their customer journey, and what’s relevant at that stage. With all that in hand, you can then customize the experience. That means the message, the interactions, the types of social proof, the recommendations algorithm…everything you do can be based on customer context and delivered at the right moment.

In luxury retail, for example, you might show VIP visitors customized pages with the VIP phone line displayed prominently, or an invitation to an upcoming exclusive event with their favorite designers. In health and beauty, you can target purchasers with reminders that, based on their last purchase date their foundation is running out, and prompt them to reorder.

The best salespeople understand purchaser signals and buying behavior. They also check in at the right time, checking in on customer satisfaction, making upsells a service: “The new season’s collection is now in, there are some pieces which…”. They recognize and remember customers, making each one feel special. They do more than sell products, they sell positive emotions and happy memories.

That’s the goal of personalization, and what marketers need to achieve through their e-Commerce web sites. That’s when customer interactions become relationships, and when consistent experiences, delivered over time, create trust and loyalty.

And In The Future?

Modern e-Commerce web sites don’t look a great deal like early catalogs, but the format is still pretty similar: lists of products by category. The next big revolution is likely to be inspired by social media, transforming how visitors discover products, making it more organic, arranging them by visitors’ (predicted) interest, rather than their type. The future is customer-centric, and brands must make sure their top priorities for personalization are to build trust and create loyalty.


 

Emre Baran is a co-founder and CTO of Qubit, the leaders in marketing personalization technology.  Prior to founding Qubit, he was a senior product manager at Google working on AdWords and AdSense products — building large scale artificial intelligence and analytics systems to scale and automate operations. And prior to Google, Baran was the co-founder and CTO of Yonja.com, Turkey’s largest social network.

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