Lia Grimberg is the Principal and Consultant at Radicle Loyalty, a Canadian consulting firm that helps brands build meaningful long-term relationships with their customers. Lia has a radically different approach to help organizations build loyalty programs and unleash their data to better understand the customer and create personalized marketing communications, and to drive specific KPIs, such as retention, engagement, frequency, and larger baskets. With 20+ years in loyalty, Lia honed her loyalty and marketing skills during her corporate career at companies such as The Bay, Loblaw, LoyaltyOne, The Home Depot, and American Express in Canada.
In Part One of this Two Part Series, Lia Grimberg raised the question that is being voiced by many CMO’s of her team these days “We need to make good on our promise to personalize our marketing. How are you going to make this happen?” In that first installment, Lia shared guiding principles to get personalization right and now continues in Part Two here to go deeper into the topic of Personalization, including a set of “how-to” steps that will make most CMO’s very happy.
We are facing a significant gap in customer expectations versus reality in personalization, as 85% of brands believe they’re offering personalized experiences, while only 60% of customers seem to agree. Perhaps the issue lies in the definition of what brands and customers consider “personalization”.
How do you know whether you are delivering on customer expectations of personalization? To gauge your personalization performance, let’s assess where your organization stands on the following continuum:
You may be wondering if the investment is worth the outcome. According to BCG, redirecting 25% of mass promotion spending to personalized offers would increase return on investment by 200%.
Let’s take Canadian Tire, an iconic Canadian retailer, as an example. In 2019, the company started personalizing offers to its 5 million customers. Before the program, its return on a $1 offer was $4 in sales, which then increased to $9 in sales after the implementation. Susan O’Brien, Canadian Tire’s Chief Brand & Customer Officer, the company attributes the success to “developing really strong algorithms to predict what a customer might want”.
Many of us marketers were tasked with implementing personalization for our respective organizations and the big question looms of how to get started.
Here is a 5-step guide on where to start:
Research the definition of personalization among your customers. How do your top and next best customers define what “personalization” means to them? What is considered too intrusive or creepy? What touchpoints are most lacking in a personal touch?
Determine the personalization strategy. Many of us fall into the trap of implementing technology (the how) before we determine the strategy (the what and the why). What channels will you prioritize? What metrics do you want to affect? What does success look like?
Perform a gap analysis between current data and Marketing Technology (MarTech) infrastructure and what is needed to deliver on your personalization strategy. What are your data sources and how are they integrated? Do you have a single view of the customer? Don’t forget to leverage your loyalty data, that is a wealth of information, and allows you to follow the member interactions across channels. Do you have the MarTech to deliver on the vision?
Determine milestones and break roll-out into phases. Despite potentially lengthy data and tech upgrade timelines, you don’t have to wait to start your personalization efforts. If your data centralization and MarTech stack fall short of expectations, what quick fixes can you implement (or outsource) and be able to deliver quick wins? Start small (perhaps with a few use cases in one channel) and phase out the execution of personalization to coincide with tech deliverables.
Adopt a test-and-learn mindset. Use what you learn to continuously adapt and evolve. What works with one customer segment in one channel may not work with another segment in another channel. Continue using new insights to innovate your business; continuous innovation will have your competitors always trying to catch up and never quite succeeding. Use your data to create a dialogue with your customers, to customize communications with each customer and communicate with them in a relevant way, to truly care about them and their opinions. Connect with them in a meaningful way: that provides your customers with the value they can’t get anywhere else.
You may be asking yourself who is doing it right. Sailthru publishes an annual Retail Personalization Index and Thrive Market, Sephora, and DSW earned the top three spots in 2022.
Keep the end goal in mind: your customers are human and deserve relevant and personalized messaging and content. This is the only way to build meaningful long-term relationships and emotional loyalty.
Reward redemptions are a win-win for the company and the member. They typically drive a 20-25% lift in spend and engagement after the reward redemption. When and how should you motivate customers to redeem?