Personalization is no longer a luxury reserved for the big players in e-commerce. While Amazon continues to lead the way, a personalized shopping experience has now become an expectation for the savvy customer. And, with a plethora of automated tools  available, it has never been easier for retailers to employ big data in their quest to deliver personalized content.

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

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

Retention marketing often trails behind acquisition efforts. Marketing budgets generally prioritize 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.

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

1. 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?

After plugging in a personalization tool, a wealth of invaluable data will follow. Analyze 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 behavioral metrics such as their browsing history, average order number or value, and purchase history.

Snapshot of customer data. Taken from Bunting personalization software dashboard

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 personalized content.

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

2. 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 behavioral metrics, keep your customers informed about offers pertaining to the products they love, and make sure they’re quick to know about new releases. Recent research shows that for 78% 0f customers, offers and promotions are only effective when tied into how the customer has previously interacted with the brand. Show them the ‘trending’ (ie. the most viewed or purchased that day/week) products of their favorite 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 personalized 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.

Tailored content on home page - taken from Bunting personalization software
Tailored content on home page – taken from Bunting personalization software

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 personalized 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 repeatedly shows that segmented emails can seriously increase revenue when compared to generic messages.

3. Reward

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 personalized behavioral 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.

Free delivery lightbox - screen shot of Bunting personalization
Free delivery lightbox – screen shot of Bunting personalization

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 personalization, it is easier than ever to effectively retain customers through a targeted approach. The opportunities afforded to the digital marketer by personalization are endless. Experiment – an effective personalization 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.