January 11, 2013
By Eric Tobias,

Long-Term Relationship or Holiday Fling?

Every long-lasting customer relationship begins with an initial interaction, and for many shoppers, the holidays are like a first date on your site. The 2012 holiday season set records in terms of traffic growth, so maybe the analogy is better akin to speed dating at its finest.

Now the "getting to know you" process begins with these thousands of new customers. With each click, these shoppers are giving you access to their buying habits. With every product viewed, description clicked, shopping cart filled, and item purchased, you are gaining insight into each unique shopper's wants, needs, preferences, and lifestyle.

And just like an enamored suitor who wants to continue the courtship, using what you know about individual customers to speak directly to them will help build a one-to-one connection year-round. Your most loyal customers are your most profitable ones. Utilizing personalization and segmentation technologies, retailers can leverage all of the data being collected during the holidays to turn holiday flings into lasting relationships.

The gift of data

According to a recent National Retail Federation report, the holidays can represent anywhere between 20 percent and 40 percent of a company's annual sales. The sheer volume of data that accompanies this surge can be overwhelming and often difficult to manage, let alone utilize for future marketing. Savvy retailers will use back-end technology to collect and store this data. The real opportunity, then, comes when this data can be used to personalize the user experience-tailoring the on-site content and email communication to each unique shopper, long after the holidays are over.

Segmentation strategies also empower retailers to use all of the data collected over the holiday season to drive marketing campaigns with exponentially better results than "blanket" programs.

How can you use the data you've collected to turn holiday shoppers into future conversions? Here are some suggestions.

Personalize product recommendations on-site. Use a shopper's demographic, social, browsing, and purchase data to influence the product recommendations he sees while shopping during his first visit and every time he returns. A/B tests have shown that personalized product recommendations convert at a 10 percent higher rate than nonpersonalized recommendations. IGoDigital customers are seeing a conversion even higher.

Send personalized emails to increase product discovery. Personalizing email goes far beyond putting the shopper's name in the subject line. Use the customer's past purchase data to drive email content. Include complementary product recommendations in transactional emails (purchase confirmation, shipping confirmation). Send emails that introduce products that may be of interest to that shopper, based on purchase or browsing history. Emails that include personalized content increase conversion rates by 15 percent to 25 percent, open rates by 40 percent to 55 percent, and click-through rates by 25 to 35 percent. Additionally, retailers see a decrease in opt-out and unsubscribes when they leverage personalized email content.

Use behavioral data to influence email messaging. Personalization engines typically drive the types of communication mentioned above, automatically injecting recommendations into emails for each individual customer. Data segmentation technologies allow retailers to develop their own targeted email campaigns for a larger audience, while ensuring the messaging is still based on the individual. Behavioral data segmentation tools allow you to build lists of customers who have exhibited certain behaviors on your site, then build a campaign to those shoppers. For example, build a list of all shoppers who have viewed a certain item in the last 15 days, but did not purchase it. Send those individuals an email with a special promotion on that item or category of items.

Based on iGoDigital customers' experiences, behaviorally targeted emails perform 20 times better than traditional marketing messages in terms of conversion, and click-through rates are 40 percent higher than with traditional messages.

Statistics say that your most loyal customers will drive 80 percent of your revenues. The holiday season has likely introduced your site and brands to hundreds or thousands of potential loyalists. Use the data you've collected about those customers throughout the season to turn that casual contact into long-lasting relationships.

Eric Tobias is the founder of iGoDigital and vice president of Web products at ExactTarget.