This article is taken from a presentation given at Future of SaaS festival 2022. Get the full unedited talk on demand right here.
In this article, I’m going to show you how to create a more personalized experience for your customers. There are many different factors that go into this, but don’t worry, I’m going to break it down into a few easy-to-digest talking points:
- Being a good friend
- What personalization means to consumers
- What we can do to help
- Listen for what consumers need
- Make life easier
But first, I'd like to take a moment to introduce my company.
Over the last 13 years, LiveIntent has brought the very best of advertising technology into the most powerful marketing channel: email.
We've created the largest logged-in people-based media channel in North America outside of Facebook, Google, and Amazon.
We make it possible for brands like Wayfair, Bombas, Domino's, and Allbirds to reach over 220 million people every single month. We leverage email newsletters, alerts, announcements, and transactional emails.
These are sent by big brands, retailers, and major traditional publishers, like the New York Times, Groupon, Fanatics, Gap, Meredith, and Conde Nast.
Since we only serve an ad once an email is opened and images are turned on, we can verify that every impression is targeted, optimized, and attributed to a real person – not a proxy or cookie.
We've also taken all of our learnings to leverage our people-based marketing acumen beyond the email channel and build our identity services. It's our goal to bring identity resolution to publishers, advertisers, and retailers so they can thrive in a post-third-party cookie world.
Being a good friend
So what does it mean to be a good friend? Here are the things that come to my mind when I think about this question:
- Recognize who people are. It's nice to be recognized and acknowledged by your first name. I'm terrible at names, but I work hard not to be because they’re so important.
- Listen and empathize.
- Meet people where they are. You can physically meet people where they are, but it works digitally too. I've got a friend that uses WhatsApp religiously and doesn't like using text. I don’t expect them to embrace the messaging system that I prefer to use, so I open WhatsApp whenever I want to chat with them.
- Provide good recommendations and good ‘food for thought’. This is so important and in extreme cases could even save lives.
- Surprise and delight people from time to time. Delight is one of the best human experiences you can have. To delight someone, it has to be somewhat surprising, and better than expected.
- Make people's lives a little bit easier.
- Love people for who they are, and not who you want them to be. You also have to allow people to change over time and recognize that those changes may impact what people need or expect from you.
Now that we're thinking about what we expect out of relationships with our friends and families, how is that different from what you'd expect from a brand? Is there that much of a difference in how a brand should treat you?
When it comes to personalization, it’s our mission as SaaS companies to create technology that emulates the best aspects of human nature and our best human experiences. To me, it’s the humanization of technology and marketing.
What personalization means to consumers
Let's look at what consumers say is important to them when it comes to personalization. When I go shopping I try to grab someone who can help me find what I need as quickly as possible.
I also want them to let me know if I should be thinking about something else so I don't have to come back to the store.
Don't let me leave and have to come back to get something that I absolutely needed to make the thing I bought work. Whether I'm buying online or in a store, that's my expectation.
According to Mckinsey's personalization 2021 report, the second most important factor in a consumer’s decision to buy from a brand or business for the first time (after making it easier to navigate in-store and online) is giving relevant product and service recommendations.
We need to make sure that we're using all the right technologies to make those recommendations.
When people give bad recommendations, you feel it because one, it seems like they don't know you well enough to make a good recommendation, and two, they're not aligning what you need with what's available.
All the vital personalization actions identified in this study fall under one of four areas:
- Meet people where they are,
- Know who they are,
- Offer something special, and
- Check up on them.
We need to communicate with customers and do so where they're at. We can’t just force one communication stream.
71% of consumers say they expect personalization, and 76% say they're frustrated when they don't get it. It’s important to keep in mind that if you're not personalizing your communications, you're not doing the best you possibly can. You'll end up with a lot of dissatisfied customers on your hands.
What SaaS companies stand to gain from personalization
One of the strongest performing sectors out there is direct-to-consumer (DTC). Native DTCs have been especially powerful over the last few years.
This is because they control the entire customer journey, they've got first-party data on all their consumers which they can leverage to optimize all of their communications.
Using that direct connection in tandem with personalization is vital. When you have control over the entire customer journey and direct relationships with everyone, you can see a 25% increase in overall revenue.
When you don't have those first-party relationships, personalization only has an impact of five to 10% on your business.
When we look at the last five years overall, the digitally native DTCs outperformed businesses in many other categories.
This is partly because of the pandemic, although pre-pandemic they were already doing really well, with better repurchase rates, better lifetime value, and much higher loyalty levels.
Providing optimization and personalization for the brands and publishers that we support is really powerful because it allows them to grow faster. Speed to market is crucial, especially if you're running out of money or you're raising money for growth.
That's not even the whole story because traditional brands are now starting to step into the market. During the pandemic, a lot of brands pulled out of TV, and billions of dollars moved into digital.
The most important trend here is the growth in DTC. We can see that the vast majority of the growing DTC eCommerce space is now being driven by established brands, as opposed to digital natives.
This is going to be a problem because smaller DTCs are having trouble raising money, and they're getting pushed out of a lot of media because it’s getting too expensive.
As SaaS companies, we have to figure out how to re-leverage the recipes we created for DTC natives and apply that to the large established brands. It's important that we all make that turn.
While it's harder to sell to big established companies, we have to get our heads around those longer sales cycles. It’s going to be more difficult, but it's important to take advantage of all the growth out there, and there is a lot of growth.
We're gonna keep seeing a 30% year-over-year growth in direct-to-consumer, but to grab that, we're gonna have to support both traditional brands and native DTCs.
I hinted at this earlier; there's another dynamic happening that’s making it more important than ever to talk about personalization – a lot of people are getting priced out of advertising on social media platforms, including Facebook.
We've seen 50 to 100% increases in cost-per-acquisition (CPA) among customers on Facebook, so orgs are quickly trying to diversify to other platforms. More importantly, they need to squeeze as much efficiency as possible out of other activities.
By adding strong personalization, they can squeeze more out of the expensive media that they're buying, and still hopefully hit their volume goals, their revenue goals, and eventually, their CPA goals.
However, CPA goals are going up because pricing is going up, so they need to use personalization to drive better return on assets (ROA) and repeat purchases. This is why it’s more important than ever to embrace personalization.
Speaking of diversification, if you’e diversifying away from certain channels because they're getting too expensive, look at things like retail media and LiveIntent.
Look into areas where first-party data is used for targeting, optimization, and attribution. These areas won't be hurt by the cookie apocalypse. This strategy is gonna work a year or two from now when the cookie goes the way of the dodo.
What can we do to help?
In this challenging climate, what can SaaS companies do to better support the brands, publishers, advertisers, and retailers that we work with, especially when it comes to personalization?
I go right back to thinking about this from a friendship perspective. If we can enable people with the technology they need to treat people more like friends than just consumers, that can go a long way.
Earlier on, we looked at what it means to be a good friend. Now let’s unbundle how we can apply these principles to personalization with our customers.
Know who people are
At LiveIntent, we know who people are because we use email as the identifier. Email is the single largest human identifier created by people. There is no better first-party identifier in media or marketing.
Most people have multiple email addresses, cookies, and devices, so we build out a graph around that. That way, when we're using different media to reach people, we can authenticate all those IDs and know who we’re speaking to. That's one piece of knowing who users are.
Listen for what they need or want
Listening is another piece. We can watch people migrate through sites and see what they're clicking on and where they’re converting. From there, we can start to anticipate their needs.
Perhaps someone had never visited a parenting site and suddenly they're all over that. They might be having a baby, so we might start switching up the offers and the types of content we think this person will be interested in.
We can retarget these people in the email channel, and what we're now testing is reaching them on the web. Many companies are going to be able to soon.
Dynamic product retargeting is another part of this. When someone leaves a shopping cart, pick that piece up and show them offers that might interest them. As soon as they make that purchase, stop right there.
Stop following them around with something they've already purchased and showing them offers they can't do anything with. That's a very simple form of personalization.
As a part of listening, watch what people are doing within your owned and operated properties.
- What are they doing in an email?
- What are they doing on your website?
- What are they doing in an app?
When you start capturing that kind of information, you can build a profile to better understand your user.
You can use third-party companies too, of course. Using third parties to look at interest data, technographics, and age is great, but what works really well is activity signals. What is this person doing right now? Are they online? Are they looking at their emails?
You want to understand and use these signals, in a privacy-compliant way, of course. There's so much data you can glean from outside partners to better understand how to communicate with the people and brands you're trying to serve.
Meet people where they are and make solid recommendations
When the time is right, meet people where they're paying attention. You could always send a triggered email to someone who has abandoned a cart. Triggering emails, which is a huge piece of personalization, is extremely effective.
The problem is that many CRM teams look at email as a sending mechanism. However, email is no longer about just sending emails; it’s about identity and meeting people where they are.
We need to make it possible for brands to identify and reach their customers, whether they're reading a New York Times newsletter, looking at CTV, or on Fanatics buying a Green Bay Packers jersey, as I’d like to.
Having that identity and being able to activate it to meet people where they are is vital, and that's where you can make solid recommendations for upsells, cross-sells, or whatever it is that you're trying to get across, so long as it’s something that they’d be interested in.
Make their lives easier
To make things easier for people and keep 75% of your customers happy, just make the checkout process as seamless as possible.
Take stuff out if you don't need it. If you're asking other questions to get information at that point, start using a different touch point to get that information and build more of a profile.