The Benefit of Product-Focused Personalization—And Why You Should Be Doing It. - Lift361

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The Benefit of Product-Focused Personalization—And Why You Should Be Doing It.

By Ed Higdon. Posted in Insight

September 23, 2017

Raise your hand if you think that embarking on a personalized customer communication journey is expensive, time-consuming and requires infrastructure that you just don’t have.

Well, you’re not alone.

It’s true, there was a time when personalization was reserved for retailers with the deepest pockets, but the truth is, it’s within your reach.

Your Customers Want You To Understand Them

In today’s hyper-connected world, customers want very specific things from their favorite stores. At the top of that list is personalization. Nobody really enjoys receiving a barrage of irrelevant product emails or postcards with offers that they might only use a couple of times a year. They want you to understand their preferences and habits and deliver offers and products at just the right time. At a time when large retailers get written off by many in the media as impersonal behemoths, personalizing your communications actually turns your retail outlet into more than just a store. You become a valuable service to your customers.

But What If Your Resources Are Limited?

It’s a fact that most retail marketing departments are continually asked to do more with fewer resources. This means many marketers have simply written off personalization, citing seemingly insurmountable roadblocks like:

  • Lack of internal resources
  • Budget constraints
  • Lack of buy-in from leadership
  • Limited data collection

The good news is this: you can actually achieve personalization with the resources you have, the data points you’re likely already collecting, with the budget dollars you currently have available, and you can prove ROI to leadership to get their buy-in.

How To Leverage Your Existing Resources To Lift Sales Through Personalization

How can it happen? Let’s examine a case study of how one regional retailer achieved personalization and a lift in sales without breaking the bank. The key, as you will see, is product-focused personalization.

First, the retailer pulled a list of their 100 top-selling items. Next, the retailer’s email list was separated into two test groups. One would continue to receive the general emails and the test group of 1.2 million names would receive personalized emails. Once customers were randomly assigned to the groups, the Lift361 team ranked the top 100 products by relevancy for each person in the test group using buying history data.

The last step was crafting the messaging. There was little additional work required on the marketing team’s part because they had maintained a robust digital library around those 100 top sellers and their existing email platform simplified the crafting of the messaging.

The result? The retailer saw a 1.75% sales increase from the personalization and a 1.5% increase in customer spend per name mailed. In this case, that added up to approximately $44K in incremental sales.

Now, imagine what other efforts could be done to drive a 2% lift in sales? Simply by mining the data already available, successful retailers could see up to a five- or even six-figure jump in sales.

The Key Takeaways

The bottom line is simple: if you want to personalize your communications, improve relationships with your customers and lift your sales and margins; those goals are within reach. You don’t need a library of 100 products like the retailer in the above example. You can use the top 5 products, or even your top product categories to create personalized messages.

The key to making it work is scoring your company’s top items against the buying habits of your customers, which many successful retailers already have that data available. Most email CRM systems have the capability to create dynamic content, which means that it really doesn’t require any investment in new resources.

With the right approach – and the right partners, you can start realizing the ROI of true personalization.