Personalization is table stakes for email marketers today, but brands must go beyond basic personalization if they want to show a marked increase in KPIs like revenue.
How significant? A new in-depth report, The Value of Personalization Optimization for Retailers by The Relevancy Group, found advanced personalization can generate upwards of $20 of added revenue for every $1 invested!
“Consumers demand personalized, relevant experiences and react well to offers based on their previous purchase and shopping behavior,” The Relevancy Group says.
Almost 90% of marketers in the study use some form of personalization, such as first name. First name personalization is a good step toward more relevant and engaging email. It might even help you snag a few more opens, clicks or conversions.
Basic personalization is the first step toward building a strong personalization program, especially if your brand is among the 14% that don’t use it.
But basic tactics alone won’t help you generate a sizable increase in a significant KPI like revenue. For that, you need to move up to higher levels of personalization, The Relevancy Group says: “Retail marketers must improve email marketing efforts by utilizing advanced tactics to deliver rich experiences.”
From basic to advanced: 3 stages of email personalization
The Relevancy Group classifies personalization tactics into three groups: basic, purchase-based and advanced. They all have one thing in common – they use data to create a unique experience for each customer email. The differences are in the kinds of data used and their purposes in the email.
This is the foundation of all personalization. It uses first-name and subject-line personalization to catch the customer’s eye, stand out in the inbox and show customers they’re more to the brand than just a face in the crowd.
Pro: Basic personalization is popular because it’s a low-barrier entry and operates like mail-merge in direct mail. If you collect names, you can just match them to email addresses and drop them into subject lines or the email body.
Con: “These tactics … do little to move the needle and drive business objectives,” The Relevancy Group said in its report. If 86% of the marketers who are sending messages to your customers’ inboxes are using basic personalization, your first-name personalization won’t stand out the way they would have back when personalization was brand-new.
How to use it: This email from Celebrity Cruises uses first-name personalization to better effect in its general email because it includes its customer’s loyalty information as well as his first name in the greeting. That information can nudge a customer who’s close to a reward level or eligible for one to act.
This is the next step up in personalization, using CRM purchase data and an RFM model (recency, frequency and monetary value) to personalize subject lines and generate dynamic content within an email.
Retailers use this tactic to bring customers back to buy again, using tactics like upselling, cross-selling, next logical product, how-to advice and social proof (what others who bought that product also buy or consider).
Pro: Basing email personalization is more meaningful than relying on broadcast (one email to everyone) or basic segmentation (one email to some) because it reflects your customer’s behavior and encourages them to buy again.
Con: Marketers often find it hard to access the data they need to generate these personalized emails.
“Purchased based personalization should continue to be utilized,” The Relevancy Group advises, “but to leverage for maximum benefit, marketers should level up to Advanced Personalization Experiences.”
How to use it: This National Express email has everything a passenger needs: confirmation of the destination, the ticket number, location, things to remember, bus tracker and a prominent link to manage the trip booking.
These tactics use a set of rules and real-time data to deliver an experience that comes as close to a personal email as possible. These are some examples:
- • Live inventory data
- • Clickstream behavior
- • Offers based on message open time
- • Location at open time
Among these tactics, three stand out as the most effective:
- • Click-based behavior: The Relevancy Group’s report showed this tactic earned 9.8% more than first name personalization and 6.9% more than purchase-based personalization.
- • Inventory level: An email using live inventory data can include a message warning customers about low or sold-out inventory and substitute another offer. Emails using inventory data earned 10.4% more revenue monthly than purchase-based emails.
- • Real-time data: These emails generated an estimated $7 million of incremental revenue, or 17.4% more than purchase-based personalization.
Pro: These highly personalized emails are more valuable to a customer than even purchase behavior because they reflect what’s happening around the customer in real time. Besides the obvious lift for revenue, they can generate higher open and click rates, which improves deliverability and inbox placement.
Con: You need access to the data that drives this close personalization and an automation platform that can integrate this data with your email platform. But even that isn’t the barrier it once was, back in the days when this kind of technology was available only to the most advanced brands, thanks to Liveclicker’s platform.
How to use it: Boat Outfitters includes a vital service in its emails – real-time weather forecasts.
This email from the UK’s Tottenham Hotspur rugby team uses two great engagement tactics: the countdown clock at the top to build excitement about the next game and a fan quiz near the bottom to gauge fan sentiment and nudge fans to engage with the email.
Final note: Personalization is a spectrum
These three levels of personalization – basic, purchase-based and advanced – aren’t mutually exclusive. You don’t leave one behind as you step up to the next level.
Instead, build on each one as you improve your data collection and integration and move up to the next level. Name and purchase personalization is just as relevant, but now you can add more to it to make your emails more relevant and valuable.
It’s also important to let strategy guide your decision-making. Never collect data that you don’t plan to use, and have a reason for including that data in your emails. Otherwise, that data could be seen as irrelevant – or, worse, creepy.
Combining smart strategy with advanced personalization will help you build a stronger email program, one that generates more revenue for your company and gives your customers a more valuable email experience, one that will encourage them to keep opening and acting on your emails. Find out where your brand falls on the personalization spectrum in this exclusive analysis.