Personalization: The Secret to Customer Retention
Popular brands from the Middle East talk about how personalization is taking center stage to create memorable customer experiences.
Popular brands from the Middle East talk about how personalization is taking center stage to create memorable customer experiences.
Moderator – Thank you very much for your time. We’re gonna talk about the wonderful topic of personalization. So you know, first question first, the first wave of automation, mass automation, right? Simple segmentation and sending out semi relevant content. How has hyper personalization, which is now what everyone is aiming to do, how is it, you know, rearing its head in your industry?
Can we just have each of you answer that?
Adam Salem – Well, it’s a pro and con, right? So hyper personalization takes a lot of effort and maybe based on your assumption, you think you are hitting the right point with the personalization, but sometimes because you’re still dealing with a human being, he feels that you are overdoing it sometimes.
So it’s quite a tricky part. So I would always recommend, yes, personalize, but not to the extent that the customer feels that you are talking to a robot, he’s still a human being. He can feel that you are communicating to him as a person. So I think there’s a fine line on this. So yeah, I think that’s the point of view on that.
Moderator – Ahmad, you know? Personalization for your specific industry went from nothing different to everything. How do you see it happening in your industry?
Ahmad Fahmy – For my industry, it’s totally different because e-grocery is different from other retails. So personalization not only puts the customer name in the message. We must give him the right product, application and website. If I give the customer the right product then you may like that I had to increase it myself from this product by around 35%. So the personalization is giving the customer the right message at the right and according to the insight from the AI feature in the CRM gives us the right segment.
Moderator – Adam, I’ll ask you one question. Talk to us a little more about how much is too much personalization.
Adam Salem – How much is too much? Well too much because we, again, emotional, we have to always put ourselves in the shoes. Maybe in my industry we compare it differently because our products, our rooms, our restaurants, our accommodations at hotels are a nice meal, a kind gesture to a customer or to his friend and so on.
So most of the time the product you buy is not yours, only you are giving it to someone as well. So the personalization here needs to be sent in a message that yeah, it can fit me or someone I know, maybe my mother, my relative, and it goes on. Too much meaning is that if you hyper customize the package or the product to this specific person, you miss out on him imagining that this can be given out to a different peer person, let’s say. So that’s why we are always a little bit careful about that.
We try to leave a little bit of a generic line there. So it can really fit the customer, or at least him using him, the customer to elaborate more on a word of mouth to his friends, et cetera.
Moderator – Ankit, you work in an industry that defines marketing automation to a certain extent, right? And retail will always be at the forefront. What does personalization mean for retail in fashion?
Ankit Bansal – I think firstly, personalization or this topic is important because of the reason that the customer attention span is going down, right? So in order to capture attention, you need to be relevant. It’s no longer about mass communication and maybe I can give an example of how we do this at 6th street, which would be relevant. Until last year, our marketing communication was pretty much centered around gender as a segment through which we segmented our marketing communication, right?
So it used to be women, men, kids, and all the marketing communication going out through different mediums of communication, like push email, in-app, SMS was centered around gendered, but then we quickly identified towards the end of last year that it’s not gonna work forever. Right? So what we did was, we took it one step further where we changed our personalization game at 6th street to be focused towards customers browsing behavior, irrespective of the gender they are in.
Right? So, let’s take an example. If Shweta is looking for dresses on our platform, she’s coming to browse dresses. She comes back the next day again, she’s browsing dresses. Now, on the third day when you come in, what we do is instead of sending you a push, we also personalize the medium of communication which is really important.
Personalization is not just about what which channel, it’s also about medium within that channel, right? So if we take a year back, look at a year back, we could have probably sent you an email. Hey Sweta here are the dresses you’re looking at. But it’s no longer working in that same manner that we want, right? So this time when you come to our app for the third day, we show you a nice in-app popup. We tell you, Sweta, you were looking for short dresses. Here you go.
There’s a nice creative from short, short dresses category, which is there in the form of a vertical creative in front of you and you took the first step of coming to over wrap. I took the second step of showing you the creative. So action was driven through you. Right? So, which means because of personalizing this, we are seeing about eight to 10% CTR on our banners, which are personalized as compared to traditionally about 2% CTR on email and push notification. So I’m technically getting a four x more clickthrough rate, right?
And after you click on that banner, I take you to a landing page, which is curated only for Shweta. So we have, at 6th street, we have merged our recommendation engine within MoEngage through which we curate a PLP which is only tailored for our specific customer based on their browsing behavior, right?
So now when you go to that page, we’ll show you dresses which you were browsing, and we’ll show you bestsellers within that same category powered within the same PLP. Right? So we did, just to conclude, we did two things here. Firstly, we not only personalized the medium of communication, we also personalized the channel.
Sorry, not the channel, but the medium as well. Second thing is we took you to a page which was curated for. Hence, we are seeing even a better conversion rate, right? So that’s what it means for us on 6th street.
Moderator – Thank you. Thank you for that. I do browse around on the website for a lot of dresses. Thanks for letting me know that you’re tracking. But you know guys, one of the things that I wanna point out is do you think that Facebook is not doing this? They are, right? I mean why do you think that you have a better experience browsing Instagram and Facebook because they’ve suddenly changed up the pieces of content that you’re consuming.
And this is just sort of companies becoming smart about the people that visit their app, visit their website to deliver a similar experience. One of the things that happens on the back of something like that, so instead of spending a minute, we probably have our potential customers or our repeat customers spending double the time, which means there’s double the chance that they’re actually going to transact. Right? And that’s whatever that conversion looks like.
Let me ask a different kind of question to each of you. In this particular example, how many pieces of information of data go towards personalization in this particular example? We’ll come down because it’s different for different industries. How many pieces of information help you personalize on average? What information can you collect? So you know where I’m going with the question.
Ankit Bansal – I personally am not obsessed with numbers. From a data capturing perspective, I’m obsessed with what is valuable, right? I need to know if you are my target audience, I need to know what are the price ranges of the brands you’re browsing to be able to create a segment. So the price range is one input which I need. Secondly, I need to know if you’re a value shopper, if you are a premium shopper. Third is like what categories you’re interested in, right?
So you could always end up browsing between clothing and accessories which are bags, but you never go to like formals or any other categories, right? So the third thing is the categories which I know like my journeys which are automated and have to be created.
Keeping in mind your browsing behavior. So, I don’t have a number as such in terms of the data points, but there are certain attributes and within each of these attributes, if you are then taking any action, are you taking, doing product views in any of these segments? Are you adding to carts?
Are you adding to the wishlist? What is the duration between your first session and transaction? How much time do you need to decide? Right. So these are the kind of important attributes that we capture. We capture a lot more, but these are the attributes we based our decisions on, right? For personalizing. Yeah.
Adam Salem – I love the example. I’ll add to this comparably. It’s a different industry again, but very similar in behavior. So segmentation is the key word. We somehow define our guests. We call them guests because they book at the hotel. So we define them as fast bookers. So they make a fast decision to book.
So it’s very last minute, mostly business oriented. We have slow bookers, don’t get me wrong. We all sometimes take much more time to decide and this happens when you take a family oriented trip or a leisure trip and another example is like early bookers and last minute bookers. So we always look at different segments to make sure.
We entice them, maybe we can shift them to a different segment. That’s one example. Or at least cater to their behavior to give them the right product not to entice them with another one that might not help them actually engage with your brand. So, yeah. Interesting, isn’t it?
Ahmad Fahmy – It’s the same pillars but we can add something for e grocery because egress we can work using the product.
So if the user had to buy milk today as two items, it’s taken two days to finish it so I can mix segments according to this to personalize the message for offering milk. The same for other products.
Moderator – So basically if somebody’s bought some milk, the milk will probably last for four days.
I have another question for you, Ahmad. Talk to us about how you personalize for traditionally offline customers.
Ahmad Fahmy – Before I answer this question, I must thank you for about omni channel presentation. It’s very good, really, and this is a key for the marketing and transformation for next years to make omnichannel and create between the traditional marketing and digital. So, if I had to make integration with point of sale offline markets, I can capture all data for the customer, how he buys what he buys now, when he comes to my store so I can make personalization messages before the timing he comes to store.
So, collecting data between the online and the offline, it’s very important for omnichannel and this is the value for operationalization and increases good retention.
Moderator – Adam, what kind of uplift have you seen in terms of interaction online among like, whether they’re fast or slow or they’re early or they’re late bookers?
When you personalize something on the website, for example, you know, what’s the increased level of interaction that you’re seeing? Can you put some numbers there? Can you know?
Adam Salem – We did run a study on that. Maybe you were witnessing this back in the days. The 55% I mentioned, or the 50% was close to 55. It’s actually one of the engagement issues that we have seen as a retention for customer buying back. So this came because not only understood, but you really targeted the right customer and gave the value for him to return. So the value we always present is quite simple. Maybe hotels do differently.
Maybe they present points, systems and stuff like that but what we gave is a cashback value. So cashback value has shown that it has a stronger retention, or in a way stronger value that the customer can use easily afterwards. It helps them decide better because maybe on the point system, it’ll expire soon or this kind of message is fear factors.
And especially now when we see the behavior changing so fast especially when it comes to tourism and as we saw, the grass is massive. So you cannot really capture all this behavior around, you need to be super dynamic. So being super dynamic, you need to let go into what you know or what is the customer? You need to focus more on acquisition.
Nature of the business. Right? So focusing more on acquisition lets you focus less on retention and accordingly, the customization for offers is not the right strategy at this time maybe, but you still build your segments to have this fine line to make sure you’re retaining your understanding and your nurturing what you are collecting from data.
Moderator – You brought up an interesting point that I’m gonna direct at Ankit – the dreaded uninstallation of the app and how does personalization sort of either help you identify, bring them back, and maybe even increase their engagement and their value to you? How are those connected?
Because everybody’s paying to download the app campaigns, right? And we all know a lot of people delete the app within the next month of download which means your $10 per acquisition has just been wasted. How do you minimize that and how does hyper personalization help in doing that?
Ankit Bansal – So acquisition is for the top line, and retention is for the bottom grind, right? And when it comes to re reactivating a joint customer, or retaining an existing customer, it’s always gonna be relatively cheaper than acquiring a new customer, right? These two are facts.
So there are two parts of your questions. One is about, firstly, is about identifying, and then second is what are we doing about those? So I feel like identifying a segment of customers who are about to go churned or who will end up uninstalling an app is easy because most of us use some sort of customer engagement platforms or marketing automation tools which come in with the ability of creating segments based on attributes.
So if I have a clear vision of what is the definition of churn customer for my brand, I can create a segment. So for example, I’ll just give two quick examples. Firstly, we are an e-comm website. We sell products, fashion products and the standard e-commerce journey is homepage, PLP, product page, card, checkout. Thank you. Right. Payment page.
So, For us, the first segment of churn customers, how do we identify that? If somebody is let’s say opening the app four times a month, but not moving beyond the product listing page. Right? I know something is wrong there. That segment of customers who fall within this bracket, if I don’t do anything about it, they will drop off. Right?
And the second example could be for example, somebody who’s not made a purchase with us, repeated the purchase within 90 days. I know we have not been effective post our first purchase in communicating something, right? So these are two examples. So I feel like identifying is easy with the attributes we have within such tools right?
Now. The second part of the question is what do we do about it? Everybody can identify based on their own business requirements. But I’ll just take the same examples and I will tell you for each, what we do? For the first example where customers are not moving beyond the product listing page?
Sorry, I’m taking your example again. If Sweta is on a PLP with dresses and she’s not moving, she’s not moving to the product page, she’s coming, dropping off every day, right? Like, what do I need to do as a brand? There could be like, we could list 20 different things as a reason for why you’re not moving, but we have to boil it down to understand.
So what we did at 6th Street boiled it down to three main factors. First one is the sizing, second one is the competitive pricing, pricing analysis, and the third one is the cataloging. And we picked up these three topics and we created a survey which we then sent out to this segment via WhatsApp, not via push, not via email, because we know that this medium is more effective.
So when we send this via WhatsApp, it obviously has a higher clickthrough rate, which means I’ll record more responses. So once we got the data from this survey which we sent out, we noticed a significant percentage of people listed out size, availability as an issue, right? Which means obviously you’re not going to look at the product if the size you want is not available, right?
So we started including size availability as a factor in our PLP algorithms. Now, products which were listed on top always had a 80% or more availability of the sizing. And all of a sudden, next time Sweta comes in, she sees my size is available in the product I wanted, she moves across the funnel, right?
So, very quickly moving onto the second example where, customers who made their first purchase but have not made a second purchase within a 90 day window in such a segment, we replaced our survey with the fun quiz, right? So what we did was we wanted to use this quiz as an informative medium to highlight our USPS to the customer.
So the first example in the first question in the quiz was, we asked our customers, what do you think is the number of days return policy for 6th street as a brand? We gave them four options. We asked them seven days, 14 days, 30 days, or a hundred days. Most of them responded 14 or 30 and when the date we said so it’s the wrong answer.
The correct answer is hundred days and we are informed that we are the only brand in the market who are giving a hundred day return policy that stays with the customer, right? And at the end of the survey, we gave them an exclusive voucher right? Now again, just to conclude, two things happened here.
Firstly, we used a medium WhatsApp through which we collected my responses. Secondly, we engaged them. I didn’t send them a mass communication, here’s a discount, come shop. It’s not gonna work. So we engaged them in a survey post, which we gave them a voucher and made them feel rewarded. And because of this, we are seeing about 200 to 500 customers who are coming in every day and using those vouchers. These are customers who made the first purchase three months ago, have come back and made a second purchase. So that’s really worked well for us.
Moderator – That’s really interesting. I have to let you know. Just announce this to everyone. Congratulations to the apparel group, actually to Sixth Street specifically. They’ve gone the other way. Most people launched their offline stores in almost every industry and then the digital has come in.
6th street actually started with digital and they’ve launched a digital store. Thank you so much. As we talk about this personalization, just a couple minutes more on what is digital and how does digital blend into an offline experience?
Ankit Bansal – Yes, sure. As you said, we took a non-traditional route and for us, we started this conversation with the idea of how we can add more customer value and we wanted to take the best of both worlds, right? So when you go to an offline store, we do a lot of things which we don’t realize. So for example, if I go in, I said I want to, firstly, I’ll have to look in the store for the t-shirt which I want.
I’ll spend five minutes going to that section. Then I pick up a T-shirt and my size is not available. Then ask the guy, can you get me the size? The guy will go back, come back, and then he will look for me. He’ll say, sorry, sir, this size is either available or not available and then you walk out, you spend 10-15 minutes just to know if the product was available, right?
So we wanted to solve this problem. We said, why can’t we just link the inventory in the back of the store to a tablet in front? We don’t need somebody to come tell us, right? So that is the first problem we solved in the retail offline space. Then the problem, or let’s say a limitation in the online spaces, you can’t physically touch and feel the product, right?
So we wanted these two problems to kind of merge. That’s where we came up with the digital store. We’ve launched this in Dubai. Second one is coming soon in Abu Dhabi, and the third one, hopefully in Riyadh. So in this experience, the idea is we give you human interaction for finding the product.
And if you like a product, the instant gratification of filling the product, trying on the product is also there, right? So that’s phase one of our launch and the idea is to, again, as I said, to bring the best of both worlds. Give the customers an experience which they will see a value for once they use it.
So, as I said, like we do this every single day in retail, but we don’t really think about it. Once you start using this experience, you will start realizing, why was I doing that? This experience is so much better. So this is what we are trying to accomplish to the new experiences that we are trying to build.
Moderator – Ankit hasn’t said this to me. I may get into trouble, but you know, we’ll definitely be, please go ask about Ankit when the Riyadh store opens. I’m sure you’ll get special pricing on everything in the store. I’d like to sort of wrap up the session by asking Ahmad and Adam, where does hyper-personalization take your company next, your brand next? What’s the vision, right? Where’s the future?
Adam Salem – The future is always evolving because again, it’s human behavior. You need to always spend, whether it’s funds, money, I mean, or time, or effort to really understand your customer better. This way you will serve them better. So it’s a simple takeaway.
I think it has a lot of heavy load work between technical teams in house, between interactions as well, maybe surveys as well but the key point is to really spend time on understanding that and spend the time to cater to the needs of the customer. Don’t forget that we are always customer centric.
Moderator – One thing I’ll just add to what Adam has also said is, you know, we often see what works best is that union between marketing and between the data teams. IT and business. If those teams can collaborate, your personalization will be so much faster because there’s quite a little bit of data that flows across these departments. Everyone’s talking to everybody specifically from these functions, and the IT team is actually very critical to make it happen so that the systems talk to each other.
It’s mixed for a much smoother process. What about yourself, Ahmad? Where do you see this personalization sort of track taking speed and markets? I think according to insights, 86% of shoppers love the brand according to the customer experience you give them. He shops from your market or online according to you, giving him the personalized thing he is searching for.
So, the personalization, if you have integrated and attracted everything for customers, online, offline, and collect all data, you can. Make good personalization segments and campaigns.