Many brands shape their digital customer experience based on localized data. But Eric Hansen, CTO and founder of SiteSpect, says that true personalization depends on a diverse collection of data.
Having worked with office supply giant Staples on boosting their digital CX, helping to increase engagement by 114%, SiteSpect discussed with FierceRetail the technology and strategies needed by today's retailers in order to develop truly personalized digital experiences.
FierceRetail (FR): What is a "must know" when it comes to personalizing the online experience?
Eric Hansen (EH): Retailers need to know what makes their customers tick—what drives them to engage and, ultimately, make a purchase. The best way to accomplish this is through consistent testing and data analytics tactics that help to not only collect needed insights but identify new opportunities for a retailer to grow and evolve. The more granular retailers can get in understanding their customers, the better. So, when a retailer tests their website or mobile application, they need to think about data collection like creating a mosaic. They are not going to craft a detailed image of their customers with just one or two tile colors. To get a sharper image, retailers need to collect a wide range of data—including where customers are from, what device they are using, what time of day and year they tend to purchase or visit the site and more. With such a detailed picture of the customer, retailers can implement better-targeted customer experiences.
FR: What do you think are the biggest challenges for online personalization?
EH: One of the biggest challenges facing retailers is a siloed organizational structure, meaning everyone is instructed to stay in their lanes and work toward their own specific goals. When it comes to customer experience, this means that IT has its own set of goals, which differ from, and can conflict with, the marketing team's particular goals, which also may tangle with the sales team’s incentives. As you can see, this becomes a mess of warring factions that can get almost as heated as Game of Thrones.
Everyone needs to come together around the customer experience. When it comes to personalization, each department has a unique line of sight on the customer and what makes them “click.” Departmental collaboration is key for bringing together these different views to create a more holistic picture of the customer.
The other issue retailers struggle with is making assumptions about customers based on generalizations or stereotypes. Assumptions cannot be the basis for a plan of action. Thanks to Moneyball, baseball teams can no longer get away with signing a tall pitcher because, “all tall pitchers throw hard.” When it comes to customer experience however, this type of thinking is still a struggle, with too many businesses heedlessly insisting on making decisions based on assumptions rather than quantifiable data. This becomes a big problem when considering personalization, which has to be supported by detailed data that unearths the nuances of the customer journey.
FR: What are some tips to starting out when it comes to small changes that can really make or break the online customer experience?
EH: E-commerce never rests—there are no more “regular operating hours” and retailers need to adjust their strategies to ensure they’re open for business 24/7/365. Accomplishing this starts with continuous testing. Every retailer tests, but it has to be a constant thing—they always have to have their finger on the pulse of the customer. Customer habits and preferences are always shifting and brands can’t get caught on their heels. If retailers are going to compete in the digital age, they need to know their customers and be agile, delivering an experience that aligns with customer needs.
One size does not fit all—a website is not a website is not a website. With the proliferation of smart devices, customers now use a brand’s site differently based on how they are accessing it. The college student using their smartphone to order textbooks will have different habits and needs than a parent looking for high school textbooks on the same site using a desktop computer. It is critical that brands can identify the differences in habits and behaviors, and use this insight to tailor the experience.
Building on these two themes, when it comes to collecting customer data, retailers should be casting a wide net. Sure, some data ends up offering little value, but the only way to find that out is by digesting it and seeing what can be learned from it first, rather than discounting it from the beginning. Often times what seems insignificant at the time of collection ends up being vital down the road for understanding a big shift in consumer habits. “Know thy customer” is the first commandment of smarter digital optimization, and brands can only do that if they have the right information.
FR: Why did Staples first approach the SiteSpect team?
EH: The Staples team approached SiteSpect several years ago when they knew it was time to get their online business goals supported by world-class technology. As a pioneer in A/B testing for digital properties, we perfectly fit Staples’ needs at the time. Staples wanted to accomplish a number of things—but first and foremost, they were focused on breaking down the silos in their customer journey and uniting departments around the shared goal of streamlining the customer experience to drive revenue. Additionally, Staples wanted to find a way to make failure acceptable and productive so that they could find more efficient and effective ways of adapting to the ever-shifting e-commerce landscape.
FR: What are the results of the partnership thus far?
EH: Over the years, as e-commerce has taken off as a strategic imperative for large retailers, Staples has increased their use of the SiteSpect portfolio of solutions and made our technology platform a “staple” in their marketing technology ecosystem.
Staples doesn’t break out specifics for particular metrics by tool—while SiteSpect has been a trusted advisor, Staples has seen increased conversions and improved ROI. For example, during a recent six-month testing campaign, Staples saw a 114% engagement lift and final purchase conversion lift of 15%.
FR: What were some lessons learned from the Staples experience?
WH: Our relationship with Staples allows us to learn together every day. The digital optimization world has significantly developed since we began working together, including advancements in audience segmentation, personalization and advanced analytics.
Our work together has reinforced the importance of testing the entire customer experience and accounting for risk. During our work with Staples, they saw an ROI risk avoidance of 492%, which translates to more than $1 million. The only way to innovate is to try new things—so much of business today is learning to innovate intelligently, taking risks and minimizing the effects when they don’t quite hit home. Being able to avoid risk is not just a benefit for business innovation, but a financial benefit as well, ensuring the company is able to continue to grow and shift to the changing dynamics of the market.
FR: Retailers collect so much data. Which data is important to personalization and which is not?
EH: Data relevancy is so particular to each retailer’s unique situation and their customers that it is hard to make blanket judgments. In fact, where the rubber hits the road is really not the data itself, but the tools that digest and organize the data. It’s better to cast a wide net and collect some incidental data as long as the tools are precise and smart enough to categorize it properly and glean insight. From years of experience, we have learned that it is the seemingly insignificant data that slips through the cracks that really hurts retailers in the long run. The last thing a business leader wants to hear at a board meeting when asked how they failed to identify a particular trend in consumer habits is “well ... it did not seem important at the time.”
FR: Anything else you can tell retailers about online personalization in 2017?
EH: If retailers want to not only survive but thrive in this retail climate, personalization must be one of their top priorities. For all the talk of Amazon wreaking havoc on the retail industry, they still have weak spots—areas in which retailers can challenge their dominance, and personalization is one of them. If retailers can gain a better understanding of their customers and what makes them “click,” they hold the key to better conversion rates and an increase in revenue.