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Retail marketers’ reality check: Your communications are actually failing, and yes…it’s personal

Posted by David Quigley on June 26, 2013

Many retail marketers say they know everything about their customers. I recently had a conversation with a CMO for a well-known store who said, “We do demographic, geographic, age ranges, household incomes; we do segmentation and post ads on Facebook and tweet at least 10 times per week. We combine that with the information we collect in our loyalty program as well.” The list of buckets seemed to go on and on.

I don’t doubt that retailers know a lot about their customers and spend mega dollars to gain those insights. But by not optimizing the use of that information, retailers are missing the mark on one key component. And here comes the “ouch,” it’s personalization to the customer.

Consider this—a recent study notes that 70% of customers expect retailers to be specific in their communications. That’s specific to the individual customer, not simply an ad or a promotional event that is sent to everyone.

Of those customers who expect personalized communications, 77% want tailored messages based on past purchases and preferences. In fact, 54% of customers would consider ending their relationship with a retailer if they were not given tailor-made, relevant content and offers”. Retailers have been so busy trying to keep up with social trends or the next big idea or chasing competitive activity that they miss the mark on how to truly engage their customers. It’s getting personal…literally.

Today’s technology dictates that retailers have to be more engaged with customers at every touch point. It’s estimated that over 80% of customers make a purchase decision before ever leaving their home. So how do retailers make it more personal?

Integrate personalized customer communications; omni-channel, multichannel, cross-channel, whatever terminology description you prefer to use, the fact is retailers must use multiple channels simultaneously to engage customers on a more personal level. There are many areas to consider when taking things to a more personal level.

Here are a few suggestions:

Personalized Email

A recent study shows 2 out of 3 retail customers want more personalized communications, and personalized email is the most preferred method. Capturing email addresses as early as possible is essential to the success of customer interaction. Sending an email with just an individual’s name is not sufficient. I receive at least 12 emails each week from retailers. Many have no personalization or just my first name in the title sentence. Then they are simply an email version of the most recent ad, sale or event that is also promoted to the general public. Most of them do not show products or content that is important to me.

A personalized retail email should contain dynamic content specific to the individual customer’s behavior and activity. Retailers should consider triggered email campaigns to help with communications. Automated marketing with dynamic variables gives triggered email a unique ability to tailor content and drive specific customer action. We recently ran a test of an email personalized with specific customer information versus a slightly more general email. Personalized information drove a 36% higher click-through rate than the general email.

Social CRM

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According to HubSpot, approximately 46% of online users count on social media when making a purchase decision. By employing data and targeted mechanisms, social media can be transformed into a customized, behavior-based channel. That is the premise of social customer relationship management (SCRM). SCRM uses social media marketing services and techniques to enable retailers to communicate and engage with customers. It provides a platform for creating meaningful ongoing dialogue with customers, and most important it is a measurable form of social media marketing.

The SCRM philosophy is behavior-based and measurement-oriented. It is predicated on determining which activities are generating engagement and leveraging those measurable learnings to inform and integrate with other areas of marketing communications.

Let’s examine the fact that 90% of customers consider reviews to be an important part of their decision-making process; however, fewer than half of those customers have ever completed an online review. The ones that do, 77% were more likely to write a bad review. With SCRM, retailers can respond to reviews with posts, comments and emails. Over 50% of customers believe that company responses to reviews are as critical as the reviews themselves.

Another area for SCRM is to engage repeat customers who have low returns with personalized email or direct mail and encourage them to write a review or post comments. Encouraging product reviews, responding to customer posts and comments, re-tweeting customer tweets and sending personal messages to customers are all some of the small but important factors to engaging customers on a more personal level with SCRM.

Personalized Direct Mail

In today’s hyper-connected world, does direct mail still work? Yes, it works, and very well. But today, direct mail seldom works alone. Direct mail should be considered as part of an integrated strategy for retailers, with each element serving a deliberate purpose and objective for each channel.

Recent mailings have shown anywhere from 40% to 70% of direct mail respondents will be driven online. That’s why true integration between offline and online components is essential. Once your direct mail has enticed prospects to go to a landing page or PURL, it’s essential that their online experience starts where the direct mail left off.

Direct mail can be part of a triggered campaign relating to purchase activity. For instance, if a customer recently purchased a product but did not buy the warranty or service term plan associated with it, a personalized direct mail piece gives a perfect opportunity for another touch point. Personalized direct mail can also have an amazing impact when executed with special content for the individual customers receiving them—a special invitation for an exclusive in-store event, for example.

There are many more areas retailers can focus on when engaging customers on a more personal level.

In my next article I’ll be discussing integration with loyalty programs and how retailers can evolve that activity. This should serve as a guideline for retailers to assess their marketing activities.

Hopefully these retailers will come to the realization that customers want them to make it more personal. And it needs to happen before the chance is gone and the customer no longer retains the retailer in consideration. Now that would really be making it personal.

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Topics: Retail Industry

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