Many marketers are stuck in the personalization slow lane. Personalization is no longer a luxury reserved for big players like Amazon but is an expectation. So marketers who want to keep up with the competition must employ a personalization strategy. The good part? It's easier than ever to get on board with personalization. A number of tools exist that will amass customer data for you and provide you with opportunities to tailor your customers' online experience.
But there's one area where personalization can have impressive effects -- customer retention.
Retention marketing is often overlooked. Marketing budgets usually prioritize acquisition -- an odd decision, considering 80 percent of your future revenue will come from 20 percent of your existing customers. Furthermore, 82 percent of companies are in agreement that retention strategies work out cheaper and more cost-effective than their acquisition efforts, and yet 40 percent admit to not worrying enough about retaining customers.
Personalization is the answer. Customers are bombarded with marketing messages and want to see personalized content relevant to their interests. Furthermore, 75 percent of marketers report personalization positively affects customer retention and loyalty metrics, according to Forrester Research.
With this in mind, here are some tips on how personalization can be used to retain customers -- by keeping them happy, engaged and converting.
1. Segment Smartly
When you plug in your personalization tool, a trajectory of data will follow your customers. You should segment your data according to relevant and pertinent characteristics for your business. This is as important when considering retention. In order to segment smartly, you need to consider transactional and behavioral metrics such as average order number, browsing history and purchase history.
For example, customers can be segmented according to when they last purchased. Target users differently, depending on how long ago they purchased. Target a user for product replenishment, or try to re-engage a user who has been inactive for a while with personalized content.
Analyzing your data will allow you to build customer profiles, analyze their journeys and evaluate how valuable they are to your company. Within your segments should be a VIP segment -- a group of high value customers who should be engaged and highly rewarded for their business.
2. Engage and Re-engage
Once you have your segments created according to appropriate data, engage those users through a targeted, personalized approach. Remember that the aim of retention marketing is to keep customers engaged and interested in your products.
One way that can worked well is re-engaging users through email. A personalized newsletter with content which is directly relevant to the customers' interests is a great way to redirect users to your site. A "we miss you" email with an incentive to return can also work well. A highly personalized message is far more likely to resonate with the customer than a generic one.
Of course, email marketing is not always an option, depending on the data available. A good personalization tool will provide you with a number of ways to target the user while they are on your site. The landing page is a great place to engage the user with relevant products and content as soon as they land on your site.
3. Reward Your Loyal Customers
Do you keep your most loyal customers happy?
Your VIP customers should be rewarded for their loyalty and enticed to remain loyal. Targeted offers are, of course, effective, but there are many other useful ways to make shoppers feel special. Consider previews of new products relevant to their interests, invitations to events, free tutorials -- whatever works well with your business.
Free delivery is another effective way to keep customers happy. A survey into online shopping experiences revealed that deliveries and returns scored the lowest in terms of customer satisfaction. Furthermore, abandoned shopping carts are often attributed to unexpected delivery costs.
However you choose to reward your valuable customers, remember to keep it personal -- relevant to the things they love. The results will be well worth the effort.
Customer retention is proven to be crucially important, but is too often not given due importance and investment. A good personalization tool can revolutionize your retention strategy. If you are new to the personalization game, experiment. Be creative. Remember that the long term effects of personalization are more effective than short -- watch your conversions grow over time and see your customers' life cycles expand. Enjoy the ride.