How Delivering a Personalized Experience Boosts Conversions

In Perth by Lachlan

“The usual?”

“Of course.”

We love it when our local coffee shop remembers our orders.

It’s a small gesture but experiences like these are why we love returning to our favorite places. It’s the kind of personalized touch that drives consumer behavior like nothing else. And it’s why more companies are increasingly taking the extra steps to deliver memorable experiences for their customers.

Take Starbucks for example.

Their coffee isn’t exactly top notch and it comes at a higher premium than other cafes. Yet Starbucks remains one of the most successful brands with the most loyal customers returning 16 times per month on average. What compels these customers then to keep coming back and part with their hard earned money?

Joseph Michelli (author of The Starbucks Experience) says that what makes Starbucks such a successful brand is its ability to personally connect with its customers. For example, the company trains employees to deliver personalized experiences from greeting customers by their name to remembering their orders. These little touches enhance the overall experience which in turn drives customer loyalty.

The principles that have turned Starbucks into a household brand are transforming how companies engage with their audience. One area in particular that has been receiving more attention in recent years is web personalization.

Here we’ll take a closer look at what web personalization is, how it boosts conversions, and how you can apply it to your own website.

 

What is Web Personalization?

In the early days of the Internet, shopping experiences were largely static. All visitors would see the exact same layout regardless of their location or where they last came from. This presents a conundrum as shoppers are likely to see offers or deals that are not relevant to their interests.

Now, sophisticated data collection and analysis tools have given rise to personalized marketing—the ability for companies to deliver individualized messages based on previous interactions.

Instead of the usual static content that are common with most websites, it’s now possible for companies to deliver a more dynamic shopping experience. It’s a more targeted approach that prioritizes the user and makes interactions more relevant. Both of which create an engaging experience that compels visitors to take action and return again.

A prime example of web personalization comes from Amazon, one of the early pioneers of integrating product recommendations throughout its site. Amazon uses data on previous purchases to recommend new items:

 

 

Just how effective are these recommendations for driving sales?

Data shows that 35% of the Amazon’s revenues is generated from its recommendation engine, resulting in billions of dollars in annual sales to the retail giant. This is just one example of how web personalization is used to deliver better shopping experiences.

Other examples include:

  •  Welcoming new site visitors based on their geographic location
  • Recommending new products from a category a shopper purchased from
  • Sending personalized emails that take shoppers to special landing pages
  • Offering discounts to items that are still in a visitor’s shopping cart
  • Displaying content that is relevant to the user’s interests
  • Allowing the creation of user profiles

Let’s take a closer look at several compelling cases of how online personalization can boost conversions for your business.

 

1. Turns Visitors Into Repeat Customers

It’s always a good feeling— the email that comes in when a new order has gone through.

Companies invest huge sums into acquiring new customers. While customer acquisition is key to keep a business afloat, in actuality the real value comes from repeat customers who come back again to shop. An analysis from SumAll found that returning customers made up between 25% to 40% of total revenues from stable businesses (even during economic downturns).

 

 

One of the best cases for personalization is that it offers an incentive for customers to return.

If returning visitors see the same content as on their first visit, their browsing experience will be more or less the same. But if you can customize that experience by displaying content that is relevant to their interests or educating them on topics related to previous purchases, you greatly enhance their second visit.

That kind of personal touch is what can mean the difference between one time shoppers and repeat customers.

 

2. Increases Visitor Engagement

Personalization extends beyond welcoming visitors back with their names or recommending certain products.

A unique and creative way to increase engagement is through content personalization. The idea is to deliver content that is tailored to an individual based on information you have. This can either be through previous interactions on your website (e.g. browsing certain categories) or through selections they choose.

An example of the latter comes from L’Oreal Paris:

 

 

Visitors are asked to select their hair and eye colors, as well their styles and interests. The contents of the page then dynamically change to match the selections:

 

 

In addition to content from selected categories, the page also displays recommended products. Personalized web design provides visitors with exactly the type of content that interests them, thus increasing engagement and reducing bounce rates.

 

3. Leaves a Positive Impression

It’s frustrating when you walk into a store and can’t find what you’re looking for. Fortunately, store assistants are typically only a short distance away to guide you in the right direction or answer any questions you might have. But you simply can’t get the same level of treatment when shopping online.

This explains why many consumers are often unsatisfied with their online experiences.

A study from Janrain found that nearly three-fourths (74%) of online users get frustrated when shown content that have nothing to do with their interests. It would be akin to walking in a store and being bombarded with offers that aren’t even remotely related to what you’re looking for. Another survey from AgilOne found that 79% of US consumers and 70% of UK consumers expect personalized experiences from brands they shop with.

Here are just some of the personalization features that shoppers appreciate:

 

Personalization Survey.png

 

Personalization helps to address the frustration that many online users experience on a daily basis. By delivering personalized content (as seen in the L’oreal Paris example), you ensure that your content is targeted and relevant to your visitors. In the process you leave a lasting and positive impression with your customers.

Bottom line: Personalization translates to more sales. A study from Econsultancy found that businesses that personalize their web experience increase conversions by 19% on average.

Here we’ll look at how to make personalization work for your business.

 

Customize Content Based On User Profiles

Everyone has different viewing preferences. Some people prefer action movies while others enjoy comedies or documentaries more. So it wouldn’t make sense to make browsing selections the same for all customers and doing so would actually compel them to choose a different service.

Netflix understands its target audience well. It lets users create profiles (even multiple profiles) and then recommends content based on previous viewing history:

 

 

User profiles is also one of the factors that has led to Amazon’s explosive growth. Shoppers are not only able to view and check their order status, but they also get product recommendations based on their interests right from the homepage.

As we have seen, that kind of targeting leads to increased visitor engagement and more sales.

 

Display Related Products

It sounds obvious in hindsight but displaying related products wasn’t always the norm. Even Amazon had reservations about this feature as it was believed it could distract shoppers and reduce conversions. But it actually had the opposite effect and was responsible for extraordinary revenue growth for the company.

In addition to displaying product recommendations, another strategy that works well is displaying related products. Here’s an example from Zappos:

 

 

Shoppers see products related to the one they are currently viewing further down the page. Here is another example from Amazon which displays related items depending on the product:

 

 

Both recommendations are relevant to the visitor’s interests. If a shopper is looking for a monitor, they might be interested in accessories such as cables for their devices. They can then either click through to the page for more details or they can simply add them all to their cart at the click of a button.

Displaying related or complementary products increases their visibility, which in turn means more to your bottom line.

 

Segment Content by Device

More people are accessing the web from smartphones and tablets than ever before which means that you need to also consider the user experience on mobile. A landing page may look great on desktops but can be cumbersome on smaller screens. Mobile users are often on the go, so they want simplified and streamlined experiences from their device.

Device type personalization considers the device that a visitor uses to browse a website whether from a desktop, smartphone or tablet, and changes the content accordingly.

One excellent case study comes from HubSpot. After noticing that conversions on landing pages were lower on mobile devices, the company took steps to simplify the layout and content to make it more easily digestible. Other changes also included shortening the lead gen forms.

 

 

Because of these changes, the company was able to increase conversions and reduce bounce rates for mobile users. Personalizing web experiences by device type can reduce friction and lead to better results.

 

Segment Audiences by User Behavior

Behavioral targeting is another powerful form of web personalization.

It allows you to define user segments and modify your website in response to certain behaviors. For example, you may want to make certain offers only available to new visitors as a way to entice them. Other examples that are commonly used in e-commerce include:

  •  Changing the site’s language and currency based on a visitor’s location
  • Showing different content based on the referring link (e.g. search or Facebook)
  • Segmenting products based on operating systems (e.g. software for Windows or Mac users)
  • Sending follow-up emails with a discount if a user abandons their shopping cart
  • Featuring products on the homepage based on previously viewed category pages

Tools such as Visual Website Optimizer allow you to segment your audience and personalize your content:

 

 

With behavioral targeting, you’re using data you know about your visitors to deliver a more personalized experience. Changes would only reflect on your website once certain conditions are met. The tool offers powerful capabilities you can leverage to take personalization even further.

 

Conclusion

Displaying the same content to all visitors risks creating a frustrating experience.

More consumers increasingly prefer content that is relevant to their interests. Personalization then represents the next step in marketing and is incredibly beneficial in numerous ways as we have seen. It leads to increased visitor engagement, provides incentives for customers to return, and leaves a positive impression—all of which translates to a better user experience and more conversions.