Welcome to the world of ecommerce personalization. In this insightful blog post, we delve into the art of crafting customer delight through personalized experiences in both B2B and B2C ecommerce. As we explore the profound impact of personalization on conversion rates, shopping cart values, and repeat customers, you'll discover why it's not just a trend but a necessity for long-term success in the digital landscape.
What is Personalization in Ecommerce?
Personalization is the latest of the B2B and B2C buzzwords, but what does it mean, and is it hype or the real deal? If it is the real deal, how does an ecommerce site leverage personalization to benefit the customer experience?
Personalization is not a new idea; it’s been around as long as ecommerce has been. However, with each passing year, it becomes increasingly critical to customer experience and retention. According to Salesforce research, 57% of customers feel that personalization is critical to a successful customer experience, with 50% of B2C customers indicating they would look for alternate shopping engagements. While that 50% number of B2C customers switching shopping engagements for a personalized experience sounds daunting, it gets even worse when viewing B2B customers. Regarding B2B customers, 65% felt likely to switch to a different ecommerce store if their company was not treated as a unique organization.
The Benefits of Personalization in Ecommerce
Given how critical personalization is to the user experience, there are several ways that this will translate into key ecommerce performance metrics and digital marketing engagement, if leveraged accordingly.
Considering this research, personalization is not just the latest in many ecommerce buzzwords. Rather, it is critical to any ecommerce site's long-term growth and success.
Higher Conversion Rates
No matter which KPIs an ecommerce engagement may have, one of the ultimate goals is to drive customers to the bottom of the sales funnel and complete the sale. In most cases, this sale is completed online, but in the B2B space, there is also the possibility that a sale will be closed via an offline engagement that was initiated online.
The type of role in an organization may also influence what defines a completed sale in the B2B engagement. A buyer in an organization may be responsible for submitting a new order, thus defining their definition of a completed transaction. Still, for an accounts payable role in an organization, the definition of a completed transaction would be paying open invoices via the B2B portal.
Immediately, an opportunity presents itself to personalize the customer experience in the B2B setting by using a user role within an organization to customize the user experience. Tailor the homepage to the user role by presenting the accounts payable user an engagement designed to get them to the invoice payment section of the B2B portal as quickly as possible. While at the same time, presenting the buyer items related to the category they are in charge of buying for, as most enterprise organizations have multiple buyers broken down into areas of ownership. Overly complex workflows lead to a decrease in customer conversions. The workflow is streamlined by personalizing the experience to meet the function the user is trying to accomplish.
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Increased Shopping Cart Value
Using past shopping habits of customers buying like items, providing a list of items a user may need when purchasing the item they are currently looking at is beneficial. Anyone who has visited a drive-thru will recognize, “Do you want fries with that?” or “Would you like to make that a meal?” Years of collected data have shown that customers are more likely to add those additional items to the food order when prompted to make the purchase. It is no different in both the B2B and B2C ecommerce space. Cross-sell and up-sell are the “would you like fries with that” of the ecommerce experience.
Determining what items add value to larger primary purchases is straightforward, using manufacturer recommendations and past shopper behavior. The manufacturer recommends replacing the hoses of a washing machine when purchasing a new unit. New hoses are the “fries.” A B2B example of this practice would be an electrical supplier recommending wire nuts or connector knockouts for bulk wiring purchases.
Using personalization to create a more customer-centric experience. Marketing in ecommerce is essential to both new and repeat shoppers. The advantage of shoppers who have already purchased or signed up for an account is that additional data can be used to provide targeted messaging to engage that customer.
Repeat business has a lower acquisition cost with a higher conversion rate than new customers. New customers are critical to a business's ongoing growth, but costs are five times higher than retaining current customers. Therefore, maximizing customer retention is the foundation for providing recurring revenue for maintaining business operating expenses and building a budget to capture new customers.
Personalization can drastically improve customer retention by providing targeted messaging, exponentially increasing repeat customers' already higher sales funnel conversion rate. Customers want to feel like the ecommerce store they are shopping at understands their purchasing needs and helps facilitate them by providing a more efficient and personalized shopping experience. Brick and Mortar locations get to know their regular customers by name, and this personalized experience of feeling like they’re valued customers encourages repeat business. B2B and B2C ecommerce businesses can replicate this experience by providing relevant content to those repeat shoppers. The benefit of online shopping and the valued shopping experience is a recipe for turning customers into repeat ordering brand advocates.
Practical Examples of Personalization
Numerous customer personalizations can be put in place for B2B and B2C that range in complexity. In much the same line of thinking as an accessibility or SEO plan, personalization is a marathon, not a sprint. There are several common starting points that any ecommerce engagement should employ for its personalization foundation.
Curated Product Listings
While not a feature of many ecommerce platforms out of the box functionality, several popular search engine options integrate with an ecommerce platform that provides the ability to boost or bury products based on segmentation. This would allow the presentation of good / better / best sections for on-page product displays.
The homepage is the gateway into the customer shopping experience. However, often, it will have a generic hero banner, featured product listing, and other relatively general product recommendations. The homepage's goal in B2B and B2C should be to move the client deeper into the shopping experience. A banner and product selection directly related to the customer's interest facilitates that experience faster instead of the customer having to search the navigation for a category relevant to their needs.
In B2B engagements, a customer's role should be considered for personalization on the homepage. The call to action for an Accounts Payable user would be a list of open invoices, while a Purchasing Manager should be presented products relative to their specific channel
Another homepage opportunity is to present any items that are known consumables related to products the user has purchased in the past.
Relevant Related Items
The product details page represents a compounded opportunity to take the personalization data already known about a user and combine it with product data in three distinct areas:
- First is a straightforward cross-sell opportunity. Earlier in this article, an example suggested accessories or installation hardware related to the product being viewed. This is a call back to an example of recommending hoses to those customers looking to purchase a washing machine.
- Second, the opportunity is up-sell. Recommend products like the product being viewed but have an increased feature set, margin, or other operating cost considerations. Combine product quality and operating considerations into a good / better / best recommendation.
- Finally, review what customers bought when viewing the item using customer shopping data. Cut down the amount of browsing a customer has to do as part of the experience and direct them straight toward the items most often purchased when shopping for like items.
Enhanced Email Marketing
Personalization within email marketing campaigns has a track record of success. Targeted marketing typically achieves a much higher penetration rate than broad marketing. Both have a place, but targeted marketing will have a better ROI.
- Abandoned cart emails are a good starting point for personalization. Recent reports by several email automation platforms have placed abandoned cart emails as having roughly a 10% recovery rate. Recovery of 10% of sales that would have normally been abandoned moves this type of personalization from a nice-to-have to a must-have. A common mistake when sending abandoned cart emails is to include a discount for completing the sale. This method will force customers to abandon their carts and wait for the discount email. Instead of capturing lost sales, the outcome will be reduced margins and increased abandonment.
- Reminder notifications regarding consumable products. While pre-pandemic, many B2B engagements used “just in time” inventory, which has changed in a post-pandemic world to be “just in case” inventory to smooth over fluctuations in the global supply change. Using past customer shopping history and the expected average burn rate of consumable products, an email can be sent to customers on an automated schedule to serve as an inventory check reminder. This personalization can be used in a B2C setting as well. For example, a customer buying pet food and has indicated they have two cats will have enough data points to reasonably calculate when they would be running low and need to reorder. Beat the competition to the punch and remind the customer where they purchased food last.
- Targeted product announcements or sales events. The easiest customer personalization to implement is to segment customers to send targeted promotions or new product announcements based on their past purchases or specified interests.
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Metrics for Ecommerce Success
Personalization is an ongoing process that requires adjustments and improvements as time goes on. Complying with metrics from heat mapping, customer relationship management (CRM) software, business intelligence (BI) tools, and web traffic analytics can indicate performance improvement opportunities and drive a long-term ecommerce improvement strategy using A/B testing. It will not be enough to track the following metrics as a single combined data point; these metrics should be broken down further to show which personalization segments are performing and which ones can be improved.
- Conversion Rate: Monitor changes in the conversion rate, specifically looking at the conversion rates of personalized content or product recommendations compared to generic content.
- Average Order Value (AOV): Evaluate whether personalization leads to higher average order values. If customers are recommended more relevant and higher-priced products, AOV should increase.
- Customer Lifetime Value (CLV): Determine if personalization efforts improve CLV by encouraging repeat purchases and increasing customer loyalty (e.g., the number of repeat customers is increasing, and their average cart value is higher than non-personalized).
- Cart Abandonment Rate: Before implementing personalization, mark the current cart abandonment rate as a baseline. Refine cart abandonment emails via A/B testing on least a monthly basis to start. As mentioned earlier in this article, beware of conditioning customers to abandon carts to leverage better deals.
- Cart Recover Rate: Based on several marketing reports, a 10% recovery rate is a baseline. This number may not be valid for every B2B or B2C ecommerce store but should be the starting point when determining if an abandoned cart strategy is working. This number should be further tailored to account for variations within a specific industry (e.g., large B2B purchase items that require capital expenditure investment will have a lower capture rate than a B2C engagement).
- Customer Engagement: Analyze customer engagement metrics, such as time spent on site, page views, and interaction with personalized elements, to determine which points of personalization are performing and which ones need to be revisited.
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The Competition is Already Using Personalization to Gain an Edge
According to a recent Salesforce ecommerce market report, 68% percent of B2B and B2C ecommerce stores use personalization to drive the on-page customer experience. Going one step further, the same market report indicates that 57% of online businesses use that data to drive personalization in other marketing, email, and merchandising channels.
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Boost Conversions with Ecommerce Personalization
In short, personalization in a B2B and B2C ecommerce engagement has a low entry investment point. Still, it is an ongoing process that must be nurtured and grown over time, as with any marketing effort. The benefits of personalization have a proven track record of success in terms of customer growth and retention. Personalization is quickly moving from a nice perk of an ecommerce engagement to a requirement with today’s average customer. Now is the time to build a personalization strategy because the competition will likely already have one.
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