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Five Steps to a successful Personalisation Strategy

It all sounds simple enough, especially for those organisations that have achieved highly sophisticated online optimisation over the past couple of years. But there are brands and companies that haven't yet reached that peak of personalised marketing, and that haven't yet perfected and optimised the digital customer experience.

So how, then, can organisations that are still struggling to achieve personalisation and deliver that essential individual customer experience actually achieve their goals? According to Maxymiser, there are five steps to successful personalisation, as follows:

1. Make Personalisation a Strategic Objective
   Personalisation is not a tactical activity; it is a key competitive differentiator and of strategic importance. It is therefore essential to pull together the right cross-organisational team, with the right senior stakeholders, to support an effective personalisation strategy. While this can be a challenge, growing numbers of businesses are restructuring around a customer centric business model - as highlighted by the emergence of the role of Chief Customer Officer. As a result, gaining the required top level commitment is becoming easier.

   However, organisations should also learn from the strategic optimisation teams built over the last couple of years - creating a coherent team of UX, analytics, web design, marketing, as well as merchandising and product owners was essential to success. Using the central optimisation team as an engine to drive the personalisation activity is an excellent starting point.

2. Understand the Business Objectives of Personalisation
   There are three common reasons for embarking upon personalisation: get more customers to transact; get them to transact more often and get them to spend more each time they transact. Every organisation needs to determine its personalisation objectives up front in order to set the Key Performance Indicators (KPI) and metrics that will inform the success of the strategy.

   These objectives need to be further broken down in detail across product and service lines and then prioritised to create a very tangible personalisation strategy that the business can buy into and will drive bottom line business benefits. For example, a company may prioritise a reduction in return rates caused by customers buying the wrong size; or improving conversion by reducing the time between first visit and first purchase.

   Demonstrating that personalisation will help to deliver the commercial business plan is an essential element of success.

3. Build Strong Data Foundations
   Personalisation is a data driven and scientific discipline. Organisations have to ensure the right data sources are in place in order to identify and prioritise the best areas for personalisation. This requires a combination of static offline segmentation data from CRM systems, purchasing and loyalty information from transactional systems, session information and real time behavioural data.

   With a strong blend of historic and real time information, organisations can understand the profile of a visitor and the context of current behaviour in the session, information which supports both effective segmentation mining and deep analysis by the optimisation platform.

   Different data sources will feed into different segments. For example, a "Just Browsing" segment will be defined by cyclical journeys, high page count and short time on page; while "Brand Loyal" is defined by purchase history, page view history and branded search terms; and "Deal Hunters" can be defined by multiple savings and response to merchandised offers.

   The art of personalisation is to drive real value and bottom line impact from this data.

4. Know Your Audience and Extend It
   The majority of businesses have some form of customer base segmentation driven by criteria such as age, gender, preferred purchase category and frequency of visits, creating a 'known audience'. Building on these known attributes is the first step to iterative personalisation activity. For example, retail has had a one-size-fits all approach primarily focused on females, which has resulted in lower conversion rates for male customers. A simple redirect based on gender to either the women's or the men's page can both validate and capitalise on existing customer data.

   In addition, it is now possible to use automated software to identify the 'unknown audience'. Visitors can be automatically grouped together using multiple attributes from the hundreds of possible ones and rank them based upon business value. This is a sophisticated way of identifying unknown segments that can then be targeted with new experiences to drive incremental revenue for the business.

5. Execute Personalisation
   A large part of success in business is driven by successful execution. There are a number of different techniques that can be used in a complimentary manner to execute the personalisation strategy; therefore, the important thing to grasp at the outset is the overall approach to be taken. It is fundamentally important to use Multivariate Testing (MVT) to optimise the chosen personalisation strategy and prove through data driven decision making what variant of the personalisation to implement.

   Rules based personalisation is a good starting point but this fast becomes too complex to manage. For example, simply targeting known customer segments with different homepage banners. Extending that model using algorithmic personalisation enables an organisation to optimise the content presented based on both the customer's previous interests and current online activity. "Deal Hunters" could be targeted with low stock and potential savings messaging, while "Brand Loyal" customers can be targeted with exclusive brand stock or early notification of new stock arrivals.

"Successful personalisation is already a key competitive differentiator and this will only further increase in importance over the next 12 to 18 months. There are multiple component pieces to successful personalisation. To succeed, organisations need to have a strong foundation of data, align insight into customer behaviour, have a clear personalisation strategy, optimise it through proven testing techniques and leverage automated software to deliver real time personalisation," concluded Keating. "To deliver effective personalisation, organisations need to manage it as a continual, strategic process not a one off project."

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