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The Personalization Secret to Higher Conversion Rates

With the incredible expansion of e-Commerce (which is now a trillion dollar industry!), a ton of money has been invested in creating and managing online businesses, with retailers spending millions to drive as much traffic as possible to their sites.
The thinking was like this:
“The more traffic I bring to my site, the more conversions I’ll get. It’s a numbers game.”
But what we’re seeing now is that the growth of online sales is slowing down, and while that doesn’t mean that e-Commerce is doomed, it’s clear that retailers and digital marketers need to constantly step up their game if they want to continue to grow.
e-Commerce sites no longer focus solely on generating more and more traffic. Pretty much every digital marketer and online merchant knows that they’ve got to find ways to leverage the traffic they’ve already got. Conversion rate optimization now is the name of the game.
This realization lead to a trend in e-Commerce where sites began to try to sell more to the users that were already on their sites by utilizing real-time personalization as part of their conversion rate optimization efforts.

Using Personalization to Increase Conversions

Conversion rate optimization, or CRO, has become a catchphrase used by anyone and everyone in the e-Commerce industry. Not for nothing, the wide range of CRO tools on the market have gained popularity as they provide merchants with the following key solutions:

  • Intelligent, data-driven strategies for marketing and UX/UI
  • Personalized customer engagement
  • Decreased bounce rates
  • Abandonment prevention
  • Helping move shoppers through the sales funnel to the checkout

Still, despite the growing number of on-site engagement tools and CRO platforms, the majority of online shoppers will not end up completing a purchase, at least not on their initial visit.
This is where ecommerce personalization comes into play when discussing conversion rate optimization.
We’ve got a whole generation of online marketers attempting to improve conversions by personalizing the shopping experience as much as possible. Amazon pioneered this effective method of CRO and reportedly generate 30% of their sales through personalized recommendations alone.
But believe it or not, conversion rates for e-Commerce are still hovering at around 1%, which leaves e-Commerce professionals wondering how they can effectively engage with abandoning shoppers and bring them back to complete a purchase.
There’s a lot we can learn from the way personalization tools for e-Commerce approach user-engagement. First, they define the various user segments that exist on the site, and then within each segment, they personalize content for each user.
Clearly, customer engagement is an artform many seek to master.
Customer Segmentation
How can e-Commerce businesses utilize proven personalization strategies even after shoppers have left their sites?
What if we applied this data-driven approach to the email experience of every single individual shopper?

Email Marketing for Conversion Rate Optimization

Email is a great tool for connecting with shoppers after they’ve left a site. E-mail has been shown to:

  • outperform all other marketing channels
  • deliver a high (sometimes the highest) ROI
  • increase conversion rates significantly

Entrepreneur, reports that 91% of U.S. shoppers actually enjoy receiving promotional emails from the online stores they’ve browsed.
How can retailers effectively personalize every email experience to be relevant and engaging to each individual user and, as a result, effectively increase conversions?

The Most Overlooked User Segments That Can Generate Real Sales

As mentioned before, the path to success in using personalization to generate sales is two-fold:

  1. Identify and carefully define the user segments that exist on your site
  2. Create personalized content for every single user within each segment.

The most common user segments addressed in email marketing for e-Commerce are:

  • customers who have completed a purchase (i.e. transactional or order confirmation emails)
  • shoppers who abandon a cart (i.e. cart abandonment emails).

But upon careful examination of the analytics of e-Commerce, whether a site be big or small, you will find that only about 5% of shoppers actually add products to their carts, and even fewer (an average of about 1%) finalize a purchase.
User Segmentation
Online businesses are beginning to shift their focus away from the tail-end of the shopping funnel and address the pool of shoppers that drop out earlier on.
In order to effectively engage with each shopper that falls into that large category (approximately 94% of eCommerce traffic), we’ve defined four user segments and personalization recommendations for creating one-to-one, individualized content that’s relevant and engaging for each and every user.
The email content used to address these user segments is part of what is known in email marketing for e-Commerce as browse abandonment campaigns. These generally overlooked user segments can end up being the source of nearly 80% of the revenue generated by lifecycle email campaigns.

User Segment #1: New Visitors

  • First-time visitors to your site present a great opportunity to sell your products.
  • Use entry popups to engage with the new visitors on your site by offering a discount or special promotion upon opting in to your mailing list.
  • Send a personalized email to these first-time shoppers immediately after they’ve signed up to, registered for, or arrived on your site.
  • Create trigger rules for your opt-in popup so that it will only appear for new shoppers and not for returning shoppers.
  • We’ve seen the emails sent to a new visitor segment achieve an average open rate of 56% and CTR of 38%.

New Visitors

User Segment #2: Category Browsers

  • These are the shoppers who browse a specific category, brand, or department on your site but never click on or view specific products.
  • You can send each shopper who browsed a category customized messages that include product recommendations related to the category last browsed.
  • Shoppers are included in this user segment only if they have not actually abandoned a cart or completed a purchase in the last 24 hours.
  • We’ve seen the emails sent to a category browse segment achieve an average open rate of 45% and CTR of 22%.

Category Browsers

User Segment #3: Product Browsers

  • This segment is made up of the shoppers on your site who have viewed specific products but never added anything to their carts.
  • There are 70x more shoppers who browse products and then abandon than the shoppers who click “add to cart.”
  • Personalize the content of product browse abandonment emails by inserting all the info related to the product your shopper browsed, and if you’re really savvy, include product recommendations of items similar to the viewed product that was abandoned.
  • We’ve seen these emails perform exceptionally well. Product browse abandonment emails have an average 52% open rate and average 27% CTR.

Product Browsers

User Segment #4: Homepage Browsers

  • Homepage browsers are pretty much the window shoppers of e-Commerce. They’re the ones who land on your homepage but never venture any further into your site.
  • Make sure that when you’re defining this user segment in your email marketing software it excludes the shoppers who fit the definition of other segments so as to avoid sending multiple emails to the same shoppers.
  • Populate the emails with up to date best-selling products.
  • We’ve seen these emails achieve an average open rate of 42% and average CTR of 18%.

Homepage Browsers

Personalized Emails Outperform All Other Marketing Channels

Take a look at this screenshot from a real e-Commerce site’s Google Analytics.
As you can see, the data really speaks for itself. For this site, personalized, carefully segmented email campaigns outperformed their non-personalized email campaigns (newsletter) and their display and retargeting ads when it came to conversions.

Personalized Engagement Equals Higher Conversions

In an era of data-driven decision making, e-Commerce sites are getting better and better at honing their marketing strategies to meet the needs of consumers. With personalized engagement, online businesses can achieve higher conversion rates, and when it comes to finding the best channel in which to engage with shoppers, the clear winner is email.

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