By Matt Pigott - June 13th, 2016
To get personalization right, consider what wine.com and Room & Board are doing
The human eye can distinguish more than 500 shades of gray, a computer screen 256. According to the X Window Systems tally, 101 shades exist. Which highlights that from white to black and vice versa, there are varying levels of detail to consider. Most marketing strategies only focus on a few. When it comes to personalization, however, it’s vital for marketing professionals to understand the subtle shifts of light and dark, identify the increments and assign to each one a meta tag.
How much granularity is genuinely useful will, for every brand, be a subjective concern. Too many labels can generate data overload and confused responses. Too little and there’s nothing to work with. Marketers that venture deeper into their customers’ preferences, and, using dedicated software get the balance right, will be better positioned to deliver a meaningful response and succeed in achieving personalization at scale. In short, for dedicated marketers, relevant and detailed data is the whetstone upon which their competitive edge can be sharpened.
To get it right, go deeper
The reason personalization has become so important is that traditional advertising is, in a hyperconnected world, beginning to flounder. At best it’s a dated communications method. At worst a blunt tool for banging down doors, irrespective of who’s behind them. Basic segmentation for targeted marketing isn’t a robust enough solution either. Crudely appointed demographics, while providing a useful starting point for brand-customer relationships, must be further developed if they’re to be of value. Many marketers stop at the basics: name, zip code, date of birth, etc, then dream of having a more meaningful relationship with their customers. Meanwhile, companies such as Adidas, wine.com, and Room & Board forge ahead, building systems with algorithms that turn data into marketing gold.
Using feedback data to gain a deeper understanding of its customers and improve the relevance of its responses, this online wine retailer gets granular with meta tags that trigger inspiring suggestions for shoppers at its online store. Instead of an over-reliance on widely searched words such as red, white, and rosé, in an effort to further refine the relationship it has with its customers, wine.com has added more delicate references: smoky, flinty, crisp, sharp, bold, dry are just some of the descriptive words that spring to mind. In doing this, the brand has managed to differentiate itself significantly from other companies in the sector. By building a list of descriptive words and integrating them with its system, ready to tag browsers and buyers who pick them, wine.com puts itself in an ever-strengthening position to drive more and more meaningful future recommendations. At the same time, it has added an element of pleasant surprise for customers unknowingly in need of an online concierge.
Room & Board
By combining siloed information from the online and offline parts of its business, then running the amalgamated data through a new system, the furniture retail company made some surprising discoveries about its customers. One was that many were disappointed that their own rooms never looked as complete as those on Room & Board’s website and in its physical store displays. With the help of the system’s intelligent learning algorithms, the company responded with a strategy that ensures customers receive regular ‘room completion’ recommendations. Following the purchase of a sofa, for example, customers next receive automated, tailored and targeted emails suggesting other items...a specific lamp to match that sofa, a suitable rug, cabinets, wall hangings...all within two months, to help the customer complete their vision.
The interesting part is that those added ‘sales’ are more a by-product of better service provision, not a brazen drive to simply sell more. The company’s new approach worked. In the first three months of implementing the new customer-centric strategy, Room & Board had boosted the average value of its orders by 16 percent, and its ROI by almost 3000 percent!
Profile and profit
What’s interesting about this is it shows that brands that take a more taxonomic approach to their customers, as in their opinions, choices and tagged preferences, increase sales almost by default. Dynamic personalization such as this, that helps customers make informed purchasing decisions, is fast becoming the digital equivalent of having a knowledgeable, real life salesperson advising on products. The beauty is, the advice is customer generated because as people browse and buy, good systems will learn and deliver recommendations with ever-greater accuracy. Additionally, the information they provide doesn't leave the building with the sales people.
October 2017, New York
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