Online Retailers Ignore Campaign Testing and Personalization

Despite the constant availability of consumer data, marketers perpetually neglect the behavioral insights that power personalization, relevance, and targeted campaign success.
Customer Experience

With every open, click, and purchase, online retailers are exposed to an overwhelming deluge of customer data. Yet, while this information often holds the key to improved personalization, few marketers take the time to test email campaigns and tailor promotional offers in ways that will benefit the bottom line.

One recent marketing survey conducted by Retention Science explores how marketers are investing their time and energy by highlighting which tactics they currently employ-and those they don't. The study, which polled 139 marketers within the retail and e-commerce space, aims to emphasize that, while marketing spend might be spread thin for some, many fail to balance their budgets by simply blending behavioral insights and targeted communications. No matter company size, the majority of brands ignore consumer preferences in favor of generalized marketing messages that fall short in terms of furthering the retailer's customer satisfaction and retention efforts.

The following statistics demonstrate where marketers typically lag when it comes to personalization and the importance of analytics and campaign testing in the era of competitive differentiation:

  • While most marketers are confident about their email marketing strategies, more than 70 percent believe that their retention marketing abilities are average, poor, or need improvement.
  • Overall, 32 percent of respondents don't personalize their website at all. The 68 percent that do typically focus on including product recommendations (45 percent) or featuring the customer's name and/or unique welcome message. Only 19 percent provide personalized offers.
  • Though more than 80 percent of marketers claim to personalize their email campaigns, 60 percent do so simply by inserting the customer's name. Only 27 percent use this channel to send shopping cart reminders.
  • When it comes to monitoring metrics, 89 percent of marketers track conversion rates. However, respondents often fail to actively assess the cost of acquiring customers (48 percent), customer lifetime value (37 percent), satisfaction rate (32 percent), or churn rate (23 percent).
  • Despite the fact that 27 percent of marketers neglect to perform A/B or multivariate tests of any sort, 58 percent test email subject line effectiveness, 48 percent test email content and offers, 33 percent test their site's landing page design, and 27 percent test landing page offers.
  • Fifty-nine percent of those polled segment their customer lists based on product interests, while 48 percent segment based on activity and 38 percent segment based on customer value. However, 9 percent don't segment their customer list at all.
  • While percentage discounts appear to be the most effective incentives (31 percent), reduced or free shipping offers (22 percent) are also quite successful. However, multiple purchase discounts, such as buy-one, get-one-half-off promotions, fail to motivate customers (4 percent).

Key takeaway: Even though retailers have access to an abundance of customer data and powerful marketing tools, most marketers still only use basic campaign personalization techniques. "Although about 80 percent of marketing teams personalize emails and 60 percent personalize website content, most only use basic personalization, such as inserting a customer's name, location, or previously browsed products," says Jerry Jao, CEO of Retention Science. "Utilizing customer data to figure out what offers will work best for individual customers, and when is the best time to reach them, will greatly increase response rates and, in turn, your marketing ROI." However, only 8 percent of those polled use such insight to provide dynamic pricing, 20 percent optimize email send times depending on individual open times, and 22 percent dynamically choose the day emails send. Thus, while the opportunity to personalize exists at the granular level, few have yet to embrace such tactics to the fullest extent. Campaign testing informs such strategies, but analytics, in general, has the power to both influence and support satisfaction and retention efforts across the board. Online retailers need only give an inch of individualization to gain a mile of ROI.