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Personalisation: the key to customer retention?

Author's avatar By Stephen Tucker 05 Oct, 2015
Essential Essential topic

Personalisation is no longer a luxury reserved for the big players in e-commerce

While Amazon continues to lead the way, a personalised shopping experience has now become an expectation for the savvy customer. And, with a plethora of automated personalisation tools available, it has never been easier for retailers to employ big data in their quest to deliver personalised content.

There is overwhelming evidence to suggest that personalisation is now a crucial component of an effective digital marketing strategy. Websites employing personalisation are likely to see higher numbers of conversions, AOVs, and improved customer loyalty. And yet, there is still a large number of retailers who are stuck in the personalisation slow lane, who are yet to fully explore the opportunities offered by targeted segmentation.

In particular, there is one often overlooked area in which personalisation can be incredibly effective - customer retention.

Retention marketing often trails behind acquisition efforts. Marketing budgets generally prioritise the latter - an odd decision, I believe, considering 80% of your future revenue will come from 20% of your existing customers. 40% of marketers focus on finding new customers, while not doing enough to keep their existing customers happy. Furthermore, 82% of companies agree that retention strategies work out more cost-effective in the long run.

Personalisation, I believe, is now a crucial element of effectively retaining customers. In this article I’ll run through some ideas and tips for employing personalisation to keep your customers happy, engaged and converting.

Use data to segment your most valuable customers

It is crucial to know your customers. With retention in mind, who are your most valuable customers? Who are your most loyal?

After plugging in a personalisation tool, a wealth of invaluable data will follow. Analyse it and use it. This will allow you to segment customers according to characteristics which are relevant and pertinent to your business. When considering retention, look at transactional and behavioural metrics such as their browsing history, average order number or value, and purchase history.

An effective way of using this data is to segment your visitors according to when they last purchased. Customers can then be targeted in various ways, depending on how long ago they converted. If a customer is approaching the end life of a previously purchased product then target that user for product replenishment, or try to re-engage a user who has been inactive for a while with personalised content

The data will show you who your most valuable customers are - these guys should be rewarded and enticed to stay loyal.

Keep them engaged

Keep in mind the objective of retention marketing - to keep your customers engaged and interested in your brand and products. Using your behavioural metrics, keep your customers informed about offers pertaining to the products they love, and make sure they’re quick to know about new releases. Show them the ‘trending’ (ie. the most viewed or purchased that day/week) products of their favourite brands.

Determine where your customers will interact with your content, and target accordingly. The landing page is a great space to do this - engaging users with relevant content and personalised product recommendations as soon as they land on your site should ensure a more satisfied customer more likely to return. Remind them of what they previously viewed on their last visit. Seriously consider how the space on each page they visit is used - split test to see what works.

When it comes to re-engaging customers, segment customers by their last visit. A great way to re-engage these valuable customers is by email. A ‘we miss you’ email or a tailored version of your newsletter with a personalised message and recommendations is a great incentive for users to return. In addition, give customers the option to have their abandoned carts saved and emailed to them - a great way to re-target customers later, as well as collect email addresses for users without an account. Research shows that segmented emails can increase seriously increase revenue when compared to generic messages.


Do you know who your VIP customers are? If not, analyse your data to find out. As mentioned, these guys should be regularly rewarded. However you choose to do this, the trick is to make these customers feel special - they need to know they are valued, and personalised behavioural targeting is one of the most effective means of doing this.

Targeted offers, of course, are very effective, but consider other options, too. Free delivery is a great way to reward as it is an area of importance to customers - abandoned shopping carts are often attributed to unexpected delivery costs. Free delivery has shown to entice customers to remain loyal.

Be creative when thinking of other ways to reward customers. Previews of new product lines relevant to their preferences are a great way to make shoppers feel valued. Consider what works well with your business - examples being invitations to events, free samples or tutorials.

In conclusion, retention marketing is often overlooked, however, since the advent of personalisation software, it is easier than ever to effectively retain customers through a targeted approach. The opportunities afforded to the digital marketer by personalisation are endless. Experiment - an effective personalisation tool will allow you to run multiple tests and see what works well. Get to know your users through data analysis, then engage, target and reward - you might be surprised by the results


Author's avatar

By Stephen Tucker

Stephen Tucker is the Smart Insights Expert commentator on personalising online customer experiences. A former fraud victim turned entrepreneur, Stephen brings over 10 years e-commerce experience to the website personalisation industry. He is the founder of Bunting, an easy plugin app that increases sales of growing businesses with dedicated web personalisation technology. You can connect on LinkedIn and follow on Facebook or Google+.

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