Data & AI
6 Strategies for Collecting Customer Data for Early Personalization
February 5, 2020
Despite the business value it drives, Gartner predicts that 80% of marketers will abandon their personalization efforts by 2025. In many cases, poor customer data management will be the catalyst.
We all know that customer data collection is crucial for personalization, especially in the earliest stages of the customer journey as you’re still establishing that relationship. But how do you go about collecting customer data?
1. Start Out Small Like Raise
We’ve long made the pro-personalization argument that to know you is to sell you. But before getting to know someone, you do have to meet them first. You may want to start small, as a way to avoid overwhelming new visitors with questions. The vast majority of online shopping carts are abandoned and to understand why, Baymard Institute surveyed more than 2,500 people last year. Shipping fees are the most common catalyst; however, 34% of consumers have abandoned carts because they simply didn’t feel like creating accounts.
Raise does this well, using a long-term multi-channel approach. The mobile payments platform works with more than 500 retail partners and its quest to learn which ones appeal most to new users begins with a single customer data set. Raise simply asks new website visitors for their email address and uses a strong welcome series to introduce the brand and learn more about these new users.
In Raise’s case, displaying a discount was effective on multiple levels. It’s eye-catching, but also doubled as a test. A/B testing welcome discounts, Raise learned that “buy now, save now” and “buy now, save later” performed equally well, helping nurture more new members into third purchases.
2. Be Crystal Clear About Your Intentions Like Sephora
When you ask for customer data, you should be crystal clear about why you’re asking. During onboarding, many retailers ask for people’s addresses. Why? If the customer hasn’t yet made a purchase, does the brand really need to know that? If you ask too much information that isn’t relevant — or doesn’t seem relevant to the customer — you run the risk of losing someone’s interest in the early stages, before it’s truly been cemented. Worse, you could lose their trust.
In the last year alone, we’ve seen major data breaches from Capital One, Quest Diagnostics, Adobe, DoorDash, and on three separate occasions, Facebook. As a result, consumers are more concerned with their privacy than ever. Surveying 1,000 Americans in November 2018, Jebbit found that nearly 36% distrust brands that ask for too much information.
Context matters. It would be completely inappropriate for a brand like Best Buy to ask customers about their race and ethnicity, which comes up during Sephora’s onboarding. In that case, it makes sense. Knowing whether someone’s skin tone is closer to porcelain or ebony helps Sephora recommend the right products — something the beauty giant does exceptionally well, having topped our annual Retail Personalization Index all three years.
3. Outline the Value Proposition Like JustFab
Asking for customer data, it’s also a good idea to let them know what’s in it for them, particularly if your onboarding process is on the exhaustive side. We’re thinking specifically of subscription-based retailers, such as the Tech Style Fashion Group brands, whose entire models are contingent on recommending the most relevant products.
JustFab quizzes new customers about their sizes, preferences and even celebrity style inspirations. The brand also asks shoppers to look at several products and select the one that’s most “them.” However, JustFab also makes it clear why it asks for so much information: “We’ll review your profile and send you styles that you will love.” By indicating you’re not a high heel lover, JustFab will understand not to recommend that shoe in the middle. That early personalization is an important foundation for JustFab, which increased revenue per thousand emails sent (RPM) by 19% by referring to shoppers’ favorite products in subject lines.
Consumers are generally happy to share their data if you’re clear about what’s in it for them. Last January, 70% of respondents to a Blis survey said they would share their shopping history with Amazon in exchange for a discount. That’s way more personal than their preferred pair of shoes.
4. Give Customer Data an Abandoned Cart Approach Like Adidas
A new customer is filling out your onboarding quiz and everything is going swimmingly. You learn his sizes, that he likes tapered jeans and hates the color yellow, and… silence. It’s possible he lost interest, but equally likely that he saw something shiny and got distracted. After all, every second on the Internet is marked by 969 Instagram posts uploaded; 2.9 billion emails sent; and 80,000 things Googled.
If this happened mid-checkout, you’d almost certainly send an abandoned cart email. These messages have unusually high open rates and even better, unusually high conversion rates. Treat your onboarding the same way, like Adidas does.
Launched in 2018, Adidas’ Creators Club is a loyalty program that provides customers with early access to products, exclusive offers and event invites, and activity-based rewards. Adidas doesn’t ask new members for much, just their demographic data and preferred activities. The latter sounds small, but that one question is invaluable in the brand’s personalization efforts. Runners, rock climbers, basketball players and bikers all have different equipment needs, which means different marketing. That insight into its customers lifestyles is important enough for Adidas to follow up. But notice how the language is still about the customer: “Help us get it right.”
5. Incentive Information Sharing Like West Elm
Birthdays are a valuable set for segmentation — is The Home Depot likely to market patio sets to a 22-year-old in New York? — which often precludes personalization. Down the line, someone’s birthday also provides retailers with an opportunity to cement loyalty and engagement with a birthday email. Relative to other marketing emails, their transaction rates tend to be astronomical.
Plus, a good birthday email can help you brand stand out because they’re as rare as they are effective. Of the 250 brands we evaluated for the most recent Retail Personalization Index, just 14% acknowledge their customers’ birthdays. West Elm is one of them, taking a straightforward approach to acquiring this information. The home goods retailer simply asks and makes it clear that if you share it, there’s a gift in it for you. We like the way this incorporates previous points, namely outlining the reason for the ask and the value proposition simultaneously.
A nudge like Adidas’ drives some people to action; others, not so much. If that’s the case, try incentivizing customers to share their information. Strategic discounting is a staple of every triggered message along the customer lifecycle, from the welcome series to entice new customers all the way to the winback message re-engaging those who have lapsed.
6. Understand What’s Universal Like MATCHESFASHION
Adidas wants to know if you golf, while it helps Sephora to understand whether your skin is oily, dry or somewhere in between. The point is, the data sets that matter most vary from one brand to the next. However, one thing to keep in mind during onboarding are universally important bits of customer data, such as where, when and how often each person wants to hear from you.
Crucial in nurturing and maintaining engagement, preference centers set the foundation for strong personalization early. This is especially true if your brand has multiple messaging streams. Take MATCHESFASHION, for example. The luxury retailer has five different kinds of emails for both male and female shoppers, who could potentially hear from the brand nearly every day of the week. According to Alliance Data, 69% of consumers want some control over their email frequency. Meanwhile, only 10% of retailers offer that option.
MATCHESFASHION lets consumers control their messaging cadence and content, offering designer preferences. What’s more, the brand’s preference center that transcends the inbox. Customers have the option to opt in or out of receiving direct mail and mobile messages. After all, true personalization isn’t just about customizing the customer experience on one channel. It’s about doing so across every channel, especially as consumers increasingly move seamlessly from one to the next.
2020 Holiday Marketing Playbook
With all that has happened this year, we expect to see a holiday season unlike any other. That said, the time to start testing and building out email and CRM strategies is now. Along with our Retail Advisor, former JustFab VP Monica Deretich, Sailthru has developed this playbook to help retailers crush Q4 and beyond.
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