The continued and considerable rise in market fragmentation has seen an increased need for retailers to employ precision marketing in order to maintain their current revenue and also grow their businesses. This trend is markedly impacting the way retailers are utilizing real-time personalization and behavioral data to increase customer engagement and ultimately improve revenue.
Most businesses today understand that their website visitors expect to relate in much more personalized ways through the online interface, so to increase engagement and conversions, the overall user experience must constantly be enhanced. In fact, over 90% of in-house marketers acknowledge that website personalization is critical to their current and future success (source). Predicting future behavioral patterns of the target audience may have an impressive impact on the bottom line, and that’s exactly where real-time website personalization technology comes into play.
One of the important aspects of any personalization engine is the ability to collect enough data. Basically, the more data you collect, the higher the accuracy of your data-derived insights. Data sources usually include on-site behaviors, but also third-party information such as social signals and online surveys among others. As a retailer, you can affect a substantial positive impact on your visitors’ experiences, and therefore on the growth of your business by collecting their behavioral data and then tweaking your site content based on your resulting insights. Such behavior information can include purchase history, similarities, pursuits, and demographics.
Utilizing Behavioral Data
Personalization technology utilizes deep data mining and machine learning capabilities to help retailors tailor their pages to individual users’ preferences. The key is to be able to analyze raw data to define and optimize the journey of individual customers. Data mining is a continuously evolving process that applies complex machine learning algorithms to analyze large amounts of data for the purpose of finding patterns, correlations and insights, and it’s used in personalization engines to analyze the past and current behavior of users.
Today, behavioral analysis and customer targeting solutions have become a commodity. Online retailers and advertisers are increasingly using behavioral targeting to enhance marketing strategies, leading to more effective off-site or on-site campaigns and promotions. One of the most common and valuable products of behavioral data utilization is the conclusion of strategic insights obtained from the meticulous, automated data mining process, followed by their dynamic packaging for personalized recommendation elements. Many eCommerce sites take advantage of this technique to develop highly personalized product recommendations for their online visitors.
Picking The Right Personalization Solution is Key to Success
Few technologies are capable of delivering the necessary real-time analytics and experiences in terms of technology, creative execution and integration of data, so picking the right behavioral targeting and personalization solutions, as well having as a solid, strategic marketing plan, are key to achieving success.
Data-driven marketing practices are on the rise. In fact, more than 40% of U.S. marketing professionals said they increased spending on data-driven marketing during 2014, according to a study published by Direct Marketing Association and the Winterberry Group. Yet, while effective data analysis can provide the means to achieve rapid growth and create a data-driven marketing machine, one of the key findings of the study “The State of Always-On Marketing Study”, conducted by Razorfish in collaboration with Adobe, was that over 75% of marketers fail to use this behavioral data in their customer segmentation analysis and targeting solution execution.
While developing your customer personas still begins as a creative process that can take weeks or longer, the right personalization technology can perform quantitative segmentation in real time that can be used to substantiate and deepen your intuitive assumptions, thereby helping you to engage with the most valuable consumers to your business.
For example, looking at data measured across Dynamic Yield’s client base showed that only 5% of a site’s visitors contributed nearly 50% of its total revenue, while over 75% contributed almost no value. Here, analyzing the persona attributes of the top converting segment is crucial toward implementing personalization to target that segment, and this is where a progressive and cutting-edge personalization engine can help identify and target these audience segments. For example, if some customers always view your offers during the day, yet consistently convert only later in the evening, that information can be applied to target them with more attractive offers during those high-converting time slots. Of course, the next step would be to understand the why behind this particular segment’s conversion behavior. Perhaps the time of day influences the customer’s ability to execute the conversion, or perhaps to share an offer with a spouse or close friend. If your data consistently shows that a conversion follows a social signal of some kind, the offer can be adapted to reflect consumer frame of mind and thus strengthen your relationship the buyer. By profiling and segmenting customers and visitors, marketers can effectively target and deliver uniquely tailored content to increase engagement and ultimately improve conversions.
What’s more, state-of-the-art Software-as-a-Service (SaaS)-based personalization solutions have resulted in the dramatic progression of effective audience segmentation far beyond classification based on demographics alone. These advanced segmentation processes can now collect and analyze huge amounts of data, including user interests and preferences, behavioral and past interactions, such that the time needed to assess, engage and direct consumers to act has diminished remarkably. Thus, retailers now have the ability to both understand their customers’ rationales as well as to adapt their digital marketing strategies to connect with them successfully.
At the highest level, your personalization technology is the central tool that links together behavioral data collection, analysis, and customer segmentation to directly impact and enhance the creative process of constructing buyer personas, producing insights that you can test and optimize in real time. As more retailers learn to adopt personalization technology into the workflow, consumers will benefit from more relevant experiences, which will increase both conversions and revenue.