Just as a conductor coordinates dozens of musicians in an orchestra to create an experience greater than the sum of their individual parts, you as a marketer can design and deliver 1:1 personalized customer experiences by creating a memorable symphony using the right customer data-driven personalization platform.
To create a harmonious, melodic symphony called ‘Omnichannel-Personalisierung’ for your customers, you need to have a simple and structured process.
And, we’ve found that Simon Sinek’s concept of the ‘Golden Circle’ can work wonders in this regard.
Simon Sinek says in his theory of the ‘Golden Circle’, that it is important for all successful organizations to first focus on ‘WHY’ they want to do something, then ‘HOW’ they want to do it, and finally achieve ‘WHAT’ they want to achieve out of it.
Based on this simple yet effective framework, omnichannel personalization for D2C brands can also be viewed through the same prism. In fact, you can get a clearer understanding of ‘WHY’ omnichannel personalization is critical to your long-term business interests here.
Once you have taken a step back and understood your key business goals that can be impacted through your personalization efforts – ensuring that you are focused on the right areas; you can progress to the next two critical stages; i.e. the ‘HOW’ and ‘WHAT’ of omnichannel personalization for a D2C brand like yours.
How to create a harmonious symphony called Omnichannel Personalization?
The answer will always be in identifying your actionable customers.
Begin by answering this question – Who are your group of actionable customers that will relate to your key business goals and will be impacted by your personalization efforts, driving in profits ?
Use the simple PIE prioritization framework
Consider three criterias to prioritize which customer segment to choose: Potential , Importance, and Ease
Depending upon the key business goals and metrics you’ve decided to target and improve , choose the right customer segments by mapping these to key business goals.
Let us look at a few key business goals and see HOW they can be impacted by omnichannel personalization:
- Customer Lifetime Value (CLTV) : Customer Acquisition Costs (CAC) ratio
To maintain a healthy CLTV:CAC ratio, focus on improving your CLTV .
To achieve this, focus on the Potential customers who are driving in revenue by mapping their Importance – using the RFM analysis method;
Recency – How recently did the customer purchase?
Frequency – How often does he/she purchase?
Monetary Value – How much does he/she spend?
An , the technical Ease of tracking and recording these data points across all channels like , website, mobile app, email etc. to create a unified view of that customer.
- Customer Retention – Brand Loyalty
While you focus on improving CLTV, remember as a Direct-to-Consumer (D2C) brand you need to focus on building trust with your customers. You need to consistently show that you are a true D2C e-commerce brand that believes in catering to every customer’s relevant needs.
But having said that, it is important to – use the above mentioned RFM method to evaluate and prioritise your customers based on the PIE framework and then re-target those customers with your personalization efforts in order to increase Customer Retention.
This is an impactful and efficient way of doing it.
Let’s say there are 10 customers who have spent $500 on leather jackets in the last two months, you might know what exactly to show these customers.
While you might have solid merchandising or pricing strategies for that specific group, it represents a really, really small segment of your customers.
We are not saying that you shouldn’t target this segment, because there is an obvious Potential. But, this has to be weighed against Importance (taking size into consideration) and technical Ease (tracking and recording) of that group.
Just by increasing the repeat purchases for this group of 10 customers by 100%, notice that it is going to result in a relatively small impact on your ROI.
Remember: While you are figuring out how to identify your actionable customers to develop the most effective personalization strategies and 1:1 product recommendations, it is very important to keep an eye on the bigger picture – WHY you are doing this.
- Reducing Churn Rate
To be a true Direct-To-Consumer(D2C) brand you have to be efficient in identifying your Potential customers that are most likely to churn by giving Importance to valuable behavior like cart abandonment, the point in the journey where a customer drops off etc. and leverage on the Ease – by focusing on trackable data-points for these customers across all channels (website and mobile)
Once you have strategically identified your actionable customers, it is time to hop on the next connecting bus –
Understanding Customers, Better
As a D2C brand your power lies in knowing your actionable customer well.
Start by creating a Einheitliche Kundensicht. Capture diverse data points on every single customer. Ensure your data points are in accordance to the 4R Principle:
In accordance with the 4R Principle you need to track and focus on critical customer data points that will help you understand your customer better, like:
- Website Data: These attributes can be detected as soon as your customer lands on your website like geolocation, time of the day , dates, acquisition campaign source (social media, push notifications, email etc) , customer name, age, gender , device type and model etc.
- Offline Data : Purchase history from physical stores, recency and frequency of store purchase, customer category (based on loyalty programs), preferred modes of payment, etc.
- User Behavior Data: Any action that is taken by the customer when he/she visits your website. This user behaviour data can be broken down into three main buckets:
- Site-wide Behavior: Simple behavioral analytics such as number of visits to your website, average time spent on your website, visit recency etc.
- Page-visit Behavior: Data about specific page views for an individual visitor, such as which pages he/she has visited, number of pages visited, and the frequency of visits per page
- Deep Behavior: This considers in-page customer actions/inactions and the level of engagement for each individual visitor based on mouse movements, scrolling, inactivity, data-filled etc. This provides the most accurate indication of affinities, interests, and true intent
Once you have collected enough data to know your actionable customers well – put yourself in your customer’s shoes only then can you recognise the potential pain points, where they drop off in their journey, point of the journey where they are showing maximum engagement etc.
Referring back to Simon Sinek’s ‘Golden Circle’ theory we have covered the ‘HOW’ part of it. Now let us move to the ‘WHAT’ part of it.
What can you do with these insights, to deliver 1:1 CX at scale?
As a D2C brand, you need to focus on a holistic strategy to achieve a harmonious and melodic symphony called omnichannel personalization, powered by AI, for your customers.
Your holistic strategy should combine two efforts:
- Onsite Personalization
- Journey Personalization
Recognize that all your customers are unique, which means that their onsite behavior and journeys (paths to conversion) are different.
With the increase in digital adoption rates, especially due to the COVID-19 pandemic, customers can opt for more than one channel to interact with your brand – one customer could be active on email while another could be more responsive on your mobile app.
Catering to the Right customer (or segment) with the Right message or offer at the Right time using the Right channel is the need of the hour.
Don’t forget that in this competitive market landscape, where even your competitors are also pursuing the same goals – only the execution of an impactful, personalized omnichannel experience will aid in converting prospects into your loyal customers. And, turning loyal customers into brand advocates in the long-run.
Let us revisit a few key business goals and now see WHAT Omnichannel Personalization strategy can be deployed to achieve them:
- Customer Lifetime Value (CLTV) : Customer Acquisition Costs (CAC) ratio
What can you do to increase CLTV?
Focus on increasing two metrics – Average Order Value (AOV) and Purchase frequency
Personalize the navigational flow across the website
Providing tailor-made navigational journeys to every actionable customer based on behavioral data will help every individual customer reach their potential conversion event faster.
Let’s say based on historical data and onsite behavior you know that Customer A intends to buy shorts.
WHAT can you do with this insight?
Personalize dynamic website elements like banner images or Call-to-Action (CTA) buttons to show images of shorts and CTAs with targeted discounts or coupon codes.
This display of understanding Customer A’s intent will aid him/her in the buying process, ensuring conversion and building trust with your customer. Thus, leading to greater top-of the mind brand recall which will result in an accelerated frequency of purchases.
Notice WHAT Amazon does to personalize my navigation flow on their website. It recommends products for me based on my search and purchase history.
Relevant product recommendations
With a plethora of products available, finding the relevant product by browsing through your product catalog can become a major time-consuming issue for your customers, which hinders the customer’s purchase frequency and his/her intent to buy – affecting AOV.
This can be done through onsite personalization – by displaying relevant product recommendations on the home page banner, product listing page, product display page etc.
Leverage this further by doing an end-end journey personalization – rely on an intelligent AI-engine to send product recommendations and choose the Right channel for each individual customer. That could be:
This onsite and journey personalization will direct your customers towards what they intend to purchase; thereby increasing the Click-through Rates (CTRs) by almost 90-120% and conversion rates by 20-30%.
To gain a deeper insight, check How Smartech’s Advanced Personalisation Solution Helped Spencer’s Retail Increase Website Conversions by 7%
Now that you have understood ‘WHAT’ you can do to increase CLTV , let us move on to the next key business goal;
- Inventory – the largest asset for D2C brands
Deploy onsite personalization by creating 1:1 personalised boutique or storefront. Understand your customers better by tracking their onsite and cross-channel behavior and use this knowledge to cross-sell products across your inventory range. Thus, decreasing your month-to-month inventory holding costs.
You can reduce your inventory costs by 10% by reducing inventory distortion.
Orchestrate offline engagement by using journey personalization strategy. Send personalized – “Just for you” , “Trending” , “Best Seller” recommendation messages across email, app push notifications, or web push notifications.
Notice the tech giant Amazon cross-selling products!
Now that we have understood ‘WHAT’ you can do to increase return purchases , CLTV , AOV and reduce inventory cost ; Let us move on to gain deeper insight on ‘WHAT’ can be done to reduce churn rate.
- Increase customer retention
As a D2C brand it is important for you to recognize the ‘who’, ‘when’, ‘where’, and ‘why’ your customers are dropping off across their individual customer journeys.
Use this insight to send smartly targeted onsite personalized web messages on your website (based on individuals behavior on your website or previous search history) like – “Before you leave”, “Discount on your first purchase”, “Use this coupon code to buy your favorite boots” etc
Build a journey personalization strategy by curating personalized ads across Google, Facebook, and Instagram – at the right time. Thus , urging a customer to make that intended purchase. You can send “Your favorite boots feel abandoned” , “Only a few left” etc. emails or app push notifications to instigate a dormant customer to revisit your website or app.
Don’t sound like a broken record!
Now that we have traveled through the complete ‘Golden Circle’, it is important to note that an orchestra is considered great only when it can produce a rich, full, consistent, and well-blended sound. This doesn’t happen overnight. Relentless practice, consistency, and experimentation is required to find that perfectly blended sound.
Omnichannel personalization, when done right is like a perfectly blended music. Experiment and use A/B testing to find the right data points, the right combination of the dynamic elements on your website, the relevant journey personalization that would work for your customer…and in turn drive sales and revenue for you.
According to Forrester 89% of digital businesses are investing in personalization, in this competitive market landscape don’t fade away in the background like elevator music – be fit as a fiddle – and start today!
To help you perfect the art and science of AI-led omnichannel personalization for your D2C brand; we’ve put together a free and comprehensive e-book: Personalization Playbook: Reimagining Offline-to-Online Retail With D2C E-Commerce