We continue the conversation between Colton Perry, VP Channel @ Dynamic Yield and Randy Kohl, Digital Marketing Director @ Gorilla Group. In this second installment Colton and Randy talk about leveraging loyalty, the pain points of creating personalized experiences, and how Google is competing with Amazon’s Alexa and Echo. Read part 1 of the interview.
If less than 5% of site visitors are now driving more than 90% of revenue, how can ecommerce marketers optimize conversions for that crucial 5% contributing to their site’s KPIs?
Colton Perry: That is a great and timely question. I was just reading a study from Retail TouchPoints and it was amazing because they talked about this concept exactly, being a missing link in how we connect or use personalization for customers. And they surveyed a number of retailers, and out of the ones they surveyed only 13% said that they are able to identify their most profitable customers. That is unbelievable to me. But I think about how we should be doing that and there are lots of ways through the data that we’ve collected.
If you are integrated like Dynamic Yield is, ultimately it is the catalogue and the cart, or you are also able to onboard data from other sources like offline sales or the POS. There are many ways we can leverage personalization to engage with those most loyal customers. We can think about things like specialized VIP offers for example. You almost think about it in a way of gamification, but how do I, on an average order or a total lifetime value perspective, go ahead and identify and make these specialized offers available using technology like dynamic yield?
When I think of my most loyal customers, they are also great brand advocates and ambassadors, so when I have someone who is very engaged when shopping with me, can I use personalization to urge or encourage, or gamify the ability to have those customers share their positive experiences with the brand added to other channels? There are lots of things like that. We can think about how do we make people aware of special events for sales that make them feel special.
Randy Kohl: To add onto that a little bit, one thing is to treat known customers like known customers. An example of this is when you are visiting a website, we all have done this, and you get the email site uplink within a few seconds of landing on the homepage, regardless if you bought from them never or 100 times. And really, if you know your customers, give them a chance to login or use whatever technology you have implemented to present that personalized experience and not have everyone come in as if they’re a new customer when they may be a very loyal customer. I think that is a turn off.
People want to be empowered today, and I think that the customer is in control in a lot of cases. So by having that be a part of the overall experience it is a great way to generate more revenue from some of the best customers. But I guess even at the bigger picture, even if 5% penetration is the standard I would say that brands need to look beyond that because even if they hit the same 5% of customers over the long term, it won’t be sustainable. Eventually you run the risk of running the well dry by going back to the same people over and over. So use the personalization tools you have. Find those customers that haven’t bought yet and guide them to purchase.
What are the main barriers keeping ecommerce brands from delivering on true, omnichannel personalization?
CP: I think everybody would expect me to say technology, being on the vendor side, but I think there is an over investment in marketing technology. And there are a lot of great platforms, tools, and technologies out there. There is also a smaller subset that actually has been able to crack more of that omnichannel problem. What I do find is that there is, definitely from the technology side, an exaggeration of capabilities out there among that lot. But there are some great technologies out there and what is holding people back is that rationalization, your omnichannel, cross channel, whatever your definition of it is. But the ability to act in the moment with not only websites or mobile apps or email or display… and just doing this in an orchestrated, elegant, and integrated fashion.
The barrier to the execution is how teams on the brand’s side are actually organized and structured. They are not set up to work in a collaborative manner. Again, the same retailer I was referencing that I met with in Boston last week literally asked for guidance on how to set up a governance model, because to them, the quote was, “It represented an entirely new way of working and collaborating.” So how do you actually piece together, when we think of acquisition marketing, for people that are charged with search and email. Then another team is charged with affiliate and display. And you have an ecommerce team that is just working day-to-day to solve their own problems and they all are not collaborating.
So they are ultimately working in a much more tactical function, whereas an acquisition marketing team might want to be doing things in email but they are going to drop traffic off at the doorstep of the website, and then maybe the ecommerce operations team is going to do what they are going to do from there. So I think it becomes much more of how, to date, teams are working in silos and they are just not used to collaborating or thinking about these cross-functional programs around personalization.
RK: That’s absolutely correct. My first note was actually siloed organizations. And I think a lot of it, especially when we talk about omnichannel, are companies out there where the physical retail leadership and the digital ecommerce leadership are separate entities. They are driven by different metrics, so the physical store managers and marketing people want to drive same store sales while ecommerce (leadership) obviously wants to drive sales through that channel. And they’re not necessarily compensated across a general growth strategy. There isn’t enough collaboration between them. I think that’s a huge problem.
We do see an overreliance on marketplaces. And not that this is anything against Amazon and selling products there, but there seems to be a short-term focus on selling through Amazon and counting that as a win. When if you are looking to build relationships over the long-term 99% of retailers and brands do not have access to that customer data. You do not have the ability to remarket to them. Or to personalize. So when they do come to your website the next week or the next month you don’t have that data to work with. Which I think is something that is holding them back over the long term.
The last thing that came to mind is that there is so much data coming in from email, social, websites, and so on that it is just a lot of information to process. And there might be a bit of analysis paralysis. Just too much coming in and not knowing what to do with it. That is really holding [many brands] back. With a crawl, walk, run philosophy just get something started vs trying to make it perfect from day one.
As Amazon continues to disrupt retail and ecommerce, forcing companies to raise their game and lower their price points, how can companies use personalization to compete?
CP: Again, such a great and relevant question that we can look at in so many different ways. I think that competition on price by itself is nothing but a race to the bottom. It is just the wrong way to think about it. Really, the way that we should be looking to win customers’ hearts and minds is through experience. That’s how we think about it. We should be always thinking about the customer being empowered to shop with the brand, when and how they want to, on their terms. At a higher level, we need to be equipped to anticipate and meet their needs or expectations in real time across any digital touch point.
To add onto the thread about Amazon, if the customer ultimately wants to purchase through Amazon and we want to do that from a marketplace perspective, we need to be able to do that. But Amazon is also always held up as a bellwether, if you will, of customization and leveraging data. So I think brands have to be equipped with the same tools, mindset, and abilities to go ahead and be as engaging and relevant to their customers as they can in the moment. And have more of an experimentation mindset and the willingness to go and find the things that are going to work or resonate. And also leverage machine learning capabilities of platforms as well to achieve scale.
RK: Those are great points. One thing I think flew under the radar a couple of weeks ago was Google announcing their shopping actions services, which is basically their counter to [Amazon’s] Alexa and the Echo, where they are now offering shop by voice. They have partnered with some of the top retail brands including Target, Walmart, Costco, and 1-800 flowers, just to name a few, offering a universal cart that they will tie into retailer loyalty programs. So, to me this is the other side of the vice and is a real threat to mid market brands and retailers. Again that is where personalization comes in.
Customer experience is key, but we know that Amazon does everything well around making sure they have the right price, the right service, great shipping, so ‘good enough’ is not good enough anymore. and my mandate is for brands to take the data they have, take personalization technologies like Dynamic Yield, and then uncover the peaks in a customer experience that you could offer that go beyond the basics of good service and an overall smooth digital experience.
Reward customers for being your customer in ways that they don’t expect. These are going to be memorable in the long term and in turn these are what really is going to drive people to come back, versus that next sale or blog post that might resonate for a few seconds. Doing something unexpected for customers with the data that you have can be something that lasts a lifetime. And I really encourage all brands to think about how they can incorporate memorable moments into their customer experiences and really make that a part of our DNA and culture.
I always say best practices are a race to the middle. If you are at the bottom, maybe that’s good enough. But for everyone else, that’s not just going to cut it. You need to think bigger.
Checkout the full interview on SoundCloud.