The 4 Pillars Of Adaptive Experience
Moco Insight was recently recommended in an article published by Jason Greenwood from Exceed Online on LinkedIn. The article has some great tips for our clients so we thought we would add it to our blog.
Thanks to Jason for recommending Moco Insight.
Happy reading everyone!
The Power of One
In marketing, the perfect customer segment, is a segment of one. Put simply, this means that you are able to tailor and target your marketing so perfectly, that it’s like you are inside the target customer’s head. This results in presenting exactly the right message, at the right time, using the right medium, all designed to increase the likelihood of a sale. This includes on site, off site and in-store marketing.
This is perfect world marketing. We don’t live in a perfect world but technology is fast emerging that will help us get there. Technology that will enable marketers to take ‘creepiness’ to warp factor 9. Technology that will make it seem as though a business possesses a crystal ball when it comes to knowing their customer’s unique needs and desires – seemingly before they do.
Taken a step further, ideally a marketer will also be able to bring in all their business intelligence data into the mix and use this to subtly ‘manipulate’ the marketing message so that what is sold, is exactly what needs to be sold, at that time and from that location. Now for this to be viable, these methods of marketing must also be fully automated, or they cannot scale. This necessarily involves big data and marketing automation technology far beyond what most businesses have in place today. Yet, if businesses do not start seriously considering these technologies and systems now, they will be beaten by businesses that already do.
Sound impossible? I assure you, it is possible. The technology exists today, albeit still somewhat immature and disjointed, to do exactly what I have outlined above, and more.
Are all your customers receiving the exact same email campaigns? Are they all seeing the exact same upsells/cross-sells, product recommendations and on-site campaigns? Are they all getting the same incentives as part of your loyalty program? Are they all seeing exactly the same content? If so, you need to seriously reconsider whether you are serving your customer and your bottom line in the best ways possible.
The digital industry is changing fast. 2 years ago, many merchants didn’t know what the differences were between a responsive website and a mobile specific website. Responsive won that battle, even before Google threw their weight behind this approach to mobilising websites. Now almost all deployments are responsive, right down to email templates and beyond.
The current buzzword in marketing, especially digital marketing is ‘personalisation’. This often encompasses but one facet of what I outlined above. It typically means breaking your entire customer base into several, generic segments or ‘buckets’ and then tailoring marketing messages and the digital experience for these segments.
Often these segments are composed of the broadest of common denominators such as age, sex, location, general interests and other demographic specific information gleaned either at account creation time or through various other means.
Adaptive experience takes personalisation to a whole new level. It is composed of 4 ‘pillars’ – or 4 types and sources of data that when combined create an almost otherworldly powerful way to persuade customers to buy what you want them to, when you want them to and where and how you want them to. It makes traditional persuasion architecture look like a minnow in comparison.
Whilst some eCommerce/Digital platforms already have the ability to capture several pillars worth of data out of the box, it’s what you do with this data that matters. As the lines between content and commerce continue to blur, the best platforms of the future will allow you to create adaptive content and shopping experiences all on the same system.
Pillar 1: Customer Intelligence
This is the information generally related to a customer profile. Name, age, sex, interests and the like. Most customers will give you almost any information about themselves, if you ask cleverly enough, or it’s incentivised.
In the clever category, instead of just asking for sex, M or F, you can extrapolate by asking for their name prefix (eg: Mr, Mrs, Miss). This allows you to link those responses to the related sex without asking directly. Similarly, you can deduce their age by asking for their date of birth, ostensibly to send them something nice on their birthday. You can also ask for their interests from among a few broad, selectable choices. You also know their physical and email address(es) – which is key.
You can make customer account fields required or you can incentivise the process by providing a gift voucher or rewards points for a completed profile. However you do it, the more info you gather, the narrower your segments can be ‘out of the gate’. Knowing WHO your customer is, is the first crucial step in being able to effectively and adaptively market to them through both content and commerce.
Pillar 2: Purchase History
Like the proverbial, footsteps in the sand, customers give you an immense amount of information about themselves and their likes, tastes and habits just through their purchase history – something they cannot hide from you, even if they share limited profile information with you. In stock trading, price history forms the backbone of trends. They say that you may not know what the price will do today or tomorrow but you always know what it did before. This knowledge is powerful if you know how to use it.
If a fashion customer buys something ‘red’ 85% of the time and in size ’10’ 100% of the time they purchase through you, it’s a pretty safe bet they like red and are a size 10. Similarly, if they buy a ‘dress’ 70% of the time and a recommended matching ‘accessory’ 60% of the time – but only when it’s on special with at least 50% off (based on their campaign responses to varying discount levels) – you now start to build a very clear picture, or pattern of this customer’s buying behaviour and expectations. You can then start to tailor the site experience and campaigns around this behaviour.
All of this information is based on key identifiable & unique factors such as: product attributes of the products purchased, categories purchased from, product types purchased, products an item is typically purchased for/with, responses to previous generic on/off site campaigns such as EDM’s, print ads, in store campaigns and the like. You also know which address they most often have their items shipped to or which store they collect from most often (if you offer click and collect). Purchase history is super powerful when you capture all facets of it and make smart extrapolations based on it.
If you can also capture browsing, search or shopping behaviour, you can take things even further.
Data points such as
- Site search & select history
- Categories visited and their frequency
- Items added to cart, wishlists or product compare but not purchased
- Items shared through social sharing links
- URL’s copied
- Device type normally browsed/shopped from
- Frequency of free shipping thresholds reached
all start to fill in the customer profile picture in unique ways you can leverage now and into the future. This assumes you’re capturing this data and adding it to the customer profile.
If you are an omni-channel player, then in store beacons, browsing/shopping and other in-store behaviours captured by the CRM/POS add to this growing customer data set. Basically, you want to capture as much information about their on/offline behaviours as you can and create a holistic picture of your customer in the process.
Pillar 3: Product Information
This is a make or break pillar. Unless you have highly detailed product information in your digital platforms & databases, you will never be able to glean the smart insights required to create an immersive and adaptive customer journey. An entire series of articles could easily be written on the importance of product attributes. These are critical for everything from faceted navigation to stock management.
‘Freeform’ attribute fields like product names and descriptions are not useful here. They vary by individual product and don’t allow your products to be logically grouped into buckets of product in any meaningful way. Global or product type specific attributes (eg: colour > red, blue, black, green) are where the data gets really useful.
Going back to our ‘red’ clothing choice example above, it is simply impossible to present all products with the attribute ‘red’ in them if this is not being applied as a product attribute against the relevant products in your product database. The word ‘red’ might be in the product name or description but as these are freeform fields, they cannot be easily parsed or categorised based on this data, apart from within the narrow confines of some semantic site search/searchandising tools such as SLIor Celebros.
In order for you to create a truly adaptive experience, you need to have the maximum amount of product data available that you can. This includes ALL differentiating factors of that product (or product type/group), set as product attributes against the product records. Implementing this well takes a lot of strategic thought and planning, not to mention implementation effort to get right – especially when you may not always know how important this is at the time!
Basically, product attributes are the ‘glue’ that ties purchase history to products in terms of relevance. Moco Insight
provide an incredible tool that can assist merchants in this area, particularly around analysing these linkages and drawing actionable insights from them.
Pillar 4: Business Intelligence
Pillar 4 is almost exclusively about optimisation and rationalisation of the supply chain. Through accurate and current stock counts by location, businesses can start to shape the way in which products are presented and offered to customers.
This is especially important for omni-channel retailers that offer services like click-and-collect and dispatch from store. It is also critical for retailers with more than one distribution centre. Obviously, the goal is to present products that are both in stock and as close as possible to the likely recipient. Profitability by item, whether an item is on sale or clearance and stock due in store dates are other factors for supply chain bosses to lose sleep over.
Once again, this goes much further than the logic typically applied to the fulfillment side of the supply chain. This typical logic only triggers once an order has been placed and then the rationalisation begins based on rule sets, freight carrier availability and costs from certain regions along certain routes and other considerations. Whether an entire order can be fulfilled from one warehouse or is it best routed to several warehouses are other factors in the equation. Bring drop shipping into the mix and fulfillment logic can get very complex indeed.
With one of the biggest costs and largest value adds for online retailers being freight and fulfillment (fees and service levels) – optimising the supply chain PRIOR to the sale is becoming an increasing focus for larger players.
After all, if you had a customer relevant red item available in a warehouse close to the address the customer uses most often for deliveries vs. one that is only available through a warehouse far away from the customer’s address, wouldn’t you want to merchandise the item closer to the customer rather than further away?
Additionally, wouldn’t you want to only present the freight options at checkout that reduce your costs the most whilst offering the best levels of delivery service possible instead of having fixed price/rule based freight options presented to every customer equally?
Bonus Pillar: Dynamic Pricing
I believe this is one of the next great frontiers in marketing. That is dynamically adjusting your pricing/discounting per customer, on the fly, based on what will likely get them to purchase at the time based on a range of criteria.
In addition, automated monitoring of competitors’ prices and stock availability (for matched or comparable SKU’s/products) and automatically adjusting their own prices within certain bands or thresholds is a nirvana that most retailers can only dream of currently. The behemoth Amazon dynamically changes their prices over 2.5 million times PER DAY!
This pillar deserves an article of its own and if you’re interested in hearing more of my thoughts around this, do let me know.
Technology & Costs
Implementing some or all of the adaptive experience pillars outlined above takes time, money, great planning and foresight. You also need the right mix of strategic, technical, operational and 3rd party/consulting resources to pull it off successfully.
Whilst I have remained technology agnostic for this article, the reality is that it takes a combination of: ERP, CRM, POS, eCommerce, OMS, Loyalty and other systems to make it all work. As someone that’s been in this business for some time and without mentioning names – there is only one single system I know of that covers most of these bases in one unified platform. I plan to discuss this platform in a future article.
To implement all 4 pillars can entail some scary costs too. However, amortising these costs over a multi-year deployment lifecycle can ease the pain somewhat and the increased revenue realised as a result should always far outweigh the costs involved. This is also where quality business analysis and a solid business case really pay dividends.
For now, retailers can see great gains by implementing just one or 2 pillars as a starting point, using the systems they already have in place. For businesses looking to re-platform, bearing these 4 pillars in mind as you architect your solution will be increasingly vital to your growth and survival in an always on, always connected, customer centric world.
The Wrap Up
It’s an exciting time to be doing anything related to digital or omni-channel. The pace of innovation in the market never ceases to amaze me.
Yet, it’s sometimes hard for businesses (B2C or B2B) I come across to really have the vision to try new things, embrace change and capitalise on the opportunities they have to really set themselves apart. This is especially true of businesses living quarter to quarter instead of playing the longer, strategic game. For those organisations that DO get it, I believe there really is a pot of gold at the end of the rainbow… and hopefully this article inspires and excites you to explore what’s possible in your own business!
If you reach out to any of the companies I have mentioned above, please tell them you read about them here. I look forward to hearing your stories and questions about what I’ve covered in this article and all things digital.
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