Targeted Personalization and its impact on Conversion

Many a times during my various meetings with the clients who are planning to go online, one of the biggest questions that I am asked to clarify is “What is Personalization? Why is everyone talking about it? How is it going to help us?” I usually end up giving examples of how personalization works and how it will be beneficial, without getting too much into the technical details of how it will be actually implemented. In most cases, apart from the few skeptical ones, the response I get is “Really? Wow! Can we do that?”

Since Personalization is not something that can be covered in a simple and straight blog article, I am going to try and explain it through a multi-part article, each one touching upon a few benefits and how they all work together in the real world.

Customer Engagement

Let us take the example of a retail store where we imagine a prospective buyer coming and browsing through the store, not really shopping, but just looking around. The first question that we will ask is why he is here and try answering them.

  1. He is here because he is trying to buy something.
  2. Someone recommended this shop to him
  3. He had some time to kill and was just browsing around (or)
  4. He was just passing by and saw something interesting in the shop window and stepped in.

There could be many more reasons, obviously, but for the sake of the keeping it simple, let us use the above four only.

If the answer to the question is “a)” or “b)” above, the chances of converting him to a customer or closing the sale as a new customer is very high. He probably knows what he is looking for, and the sale will probably boil down to price and liking. If the answer to the question is “c)” or “d)” above, then the chances go down drastically. Not many customers who are killing time do more than window shopping. There might be a slightly better chance of a sale going through in the case of “d)” as something did interest the prospective buyer.

It, however, goes without saying that if the whole shopping experience of this prospective buyer who falls into the “c)” and “d)” categories is made more attractive and engaging, by adding a bit of personal touch, sharing some tidbits of information about his hometown or something similar, the chances of closing the sale starts going up. There are still pretty high chances that the prospective buyer is going to walk away without buying anything and the probability of him coming back to the store is almost next to nil, unless he lives in the vicinity or went away very impressed with the products showcased. What, also, needs to be noted, that in a typical retail outlet, where there is a good amount of foot traffic, profiling such a buyer without any information, understanding his needs and applying the personal touch related to those needs becomes next to impossible.

Now, let us imagine this exact scenario in an online store. Suddenly, the possibilities become endless once we know that a prospective buyer has come to our online store. Taking the above example and applying to the online store, we can now go about giving complete and dedicated personal attention to those who fall under the categories “c)” and “d).” What enables us to give this personal attention are the following parameters.

  1. We will know if he is visiting our online store for the first time.
  2. We will know how they reached our site i.e.,, either through a search engine, or through some referral link from social media, or through a recommendation link sent by us to one of our customers etc.
  3. We will know what they are browsing on our site, what products they are looking at, what categories interest them.
  4. We will know from which location they are coming from, and in some cases, more detailed information if we are hooked into Google analytics and the person browsing is willing to share such information.

Using these above parameters, most ecommerce platforms allow you to build a personalized and engaging experience for the customer. Here are a few ways on how we can personalize the experience for the customer and help in the overall conversion.

If he is a first time visitor, we can popup a dialog to ask them to register their email address and offer an instant discount coupon that they can use. By sharing his email address, we will be able to send him offers and promotions to entice him to visit our online store again.

Targetted Personalization

If he has come through a recommendation, we can offer him as well as the referring customer a special offer. This offer can be very personalized for the referring customer as we know what the customer has been spending time looking at. For example, the referring customer may have been looking at a particular product more than a few times, even maybe added the item to his cart, but then removed it during the actual checkout. We can put up a special offer by clubbing that particular product at a lower price with another product, thereby, enabling the customer to purchase the product that he originally wanted to. He would now be a happy customer who will refer more of his friends to the online store.

If the prospective buyer even after registering and browsing did leave the site, just like the retail outlet, we can still reach out to him with special offers and promotions to entice him to return to the online store. Based on what products he has browsed in the online store during his last visit, any promotions or offers on those products can be emailed to him to entice him to visit the online store again.

If the visitor is from a particular location, we can then offer him a recommendation on what people from in and around the location ordered or what products they browsed. We can also suggest other products based on the current trends on that location. For example, if snow is expected in the next few days, some warm clothing, snow tires, firewood etc. can be recommended.

Conclusion:

While most sites look at complex things like speed, graphics, imagery etc., not a lot of time is spent in trying to understand the profile of the visitors and their shopping experience. This leads to heavy bounce rates and order abandonment causing irreparable damage to the brand itself as well as unforeseen loss in revenue, making the Return on Investment (ROI) much lower and increasing the Total Cost of Ownership (TCO) of the online store. The benefits of giving a personalized engaging experience for customers will go far in paving the way to a good conversion rate and increasing the Average Order Value (AOV).

That concludes Part I on how targeted personalization can help in conversion and keep them engaged in our online store.

How many of us have walked into a store and looked at a product and come out without buying it because there was no one to discuss the product and its features with? In Parts II & III, we will cover how it can help in enticing customers to come back and visit the online store. We will also cover how the biggest disadvantage in a retail outlet can be converted into the biggest advantage in an online store.

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