Personalisation is a hot topic right now, in fact online giant AOL just invested millions into a personalisation company. But why is personalisation important to you and your customer? In this article we will cover the 3 ways that personalisation improves the customer experience, and as a result increases the likelihood that a customer will buy from your site.
In the 20th century (way way back) you would go to John, because he knew everything about cheeses, and Charles, because he knew which vegetables were in season. The typical high street experience was one where you actually knew the retailer personally. Because of this close connection, they would know what you want before you did. Their knowledge of the products would mean that you could trust them to help you as a consumer to make the decision of what to buy.
Online, when we enter a store, all of us see exactly the same as anyone else. We are recommended exactly the same products. Personalisation brings this familiarity and knowledge of the customer back to your store.
Roughly 60% of your traffic will bounce at the very first page that they visit, either because they have no intention to shop, or because they cannot find the right product soon enough. At Nosto we have found that some of the best performing landing pages contain elements that either recognise the customer’s previous visits to the site, or recognise which search terms they used to get to the page. Having personalised landing pages has decreased bounce rate by as much as 20% (Nosto Q4 internal data).
Everywhere we go marketers are consistently trying to influence our decisions. Which product they want you to buy in a supermarket. Which shoe is ‘hot’ right now. Which computer you are using right now. Many of your buying decisions were based on promotions and offers. But generally these offers are the idea of one marketer/merchandiser that decided that this is the right moment to push certain products. Wouldn’t it be more effective if this is actually based on your preferences?
Personalisation brings up those items that are highly related to your preferences as a consumer. Not only showing you the items that you are already looking at, but also those you may have never thought of. When you are buying a computer screen, would it make sense to buy a mouse and keyboard as well? Which ones will go well with it?
Until recently this meant that each merchant had to customise each individual page with appropriate recommendations. Personalisation has changed this, and allows you to take the guess work out of the recommendations. In fact, Nosto has found in split tests that automated recommendations are 14% more likely to convert than manual recommendations.
Plenty of websites have a great funnel from home page, to category, to product detail page, to checkout. What happens though if the customer wants to see more than one product before deciding? Think back at buying something of higher value in a high street shop. Are you really just looking to a product once? Maybe you’d like to fit a few pairs of shoes before buying. Maybe you’d like to feel a few photo cameras in your hand before deciding which one you like. You will switch back and forth between items before deciding on one.
The simplest, but one of the most effective ways that personalisation improves a customer journey is by adding bread crumbs of recently browsed items to the site. Both the Baymard Institute and Econsultancy highly recommend this to improve navigation.
So what can I expect from personalisation?
There are many players active in the personalisation field, and most will do things slightly different. It is very important that you really align your short and long-term goals with your personalisation provider. Our research into 500+ merchants has shown the following averages improvements through personalisation: +65% conversion rate; +20% average order value; +18% items per order. Customers in each vertical react slightly differently, you get the best results when you and the personalisation provider work together to understand your customers.
About the guest author
Coen de Heus has degrees from Erasmus University Rotterdam and Ithaca College. In recent years he has worked for ESPN and Amazon.co.uk before moving to ecommerce startup Nosto. Nosto is an ecommerce personalisation engine, its plug and play technology allows any online retailer to leverage the power of personalisation. Within Nosto Coen is responsible for Business Development and Partnerships in the UK. You can get in touch with him via email (firstname.lastname@example.org) or Twitter.