Visitor #00001, we have been expecting you.

This is your profile, created by FROSMO based on your browsing behavior. Each time you interact with the website, we collect data to create a relevantly personalized experience for you.

How AI-driven personalization and human creativity make a winning pair

Artificial Intelligence (AI) provides opportunities for augmenting human creativity. You can now design campaigns that deliver the right experience in the right place and at the right time. Combining machine-driven analytics and human creativity holds the key to creating the best possible customer experience. The huge benefits from this collaboration mean value for businesses — more revenues, more profitability.

 

The power of the human mind and creativity

Machine learning is going to change every single aspect of technology, but no machine will be able to mimic the creative ability of the human mind.”
Shantanu Narayen
CEO, Adobe

When we imagine an AI-powered future, our biggest fear is dehumanization. New technologies have already revolutionized and disrupted digital marketing in many ways, and marketers sometimes worry that AI will eventually replace them. But even though AI can enable dynamic optimization and powerful personalization, it has limited capacity to create new ideas that truly resonate. The reason is simple — most of the best theories start from human experiences, past scenarios, and observations.

There will always be a need for intuition, which is largely part of the human creative process. Humans are way better at responding to extreme situations or unpredictable scenarios. Therefore, even at its most powerful, AI won’t replace human intelligence and creativity any time soon. It’s only by maintaining the human touch that AI can add value to businesses.

Humans have contextual information when reading results from machines, achieved by vast experiences with customers, understanding human behavior, familiarity with time-related insights such as seasonal events, holidays, festivals, and trends in the market as well as macro-economic information. For instance, a customer looking for a particular pair of shoes in your ecommerce store starts a conversation with a chatbot which immediately presents her with a range of available items and other options based on the description given and her previous shopping history. When the item was placed in the shopping cart, the chatbot tells her of a personal discount because of her nth time store visit and then offers some personalized recommendations for complementary items. 

Everything is going smoothly and the conversation is as human as possible when the customer suddenly asks a question about the store’s plans to have some items related to the upcoming Olympic Games. The event is in less than a year’s time and the customer wants to have a pair of shoes with the logo. The chatbot will find this too complex because it hasn’t been programmed into the system yet, so it passes the chat session seamlessly to a live agent who resolves the query. Algorithms are great at optimization and automation but have restrictions on interpreting findings held up against possible outcomes based on context.

AI helps you to get things done faster and more efficiently. It also opens the door to new and exciting ways to experiment, test, and learn from data to create better and improved customer experiences. But it’s essential that brands keep using the human touch to fully understand the nuances of human behavior.

 

Embracing the magic of AI-driven personalization

Customers have learned to expect personalized messages and offers delivered in every stage of their shopping journey, and they won’t settle for anything less. Their needs and preferences change all the time. By leveraging the power of AI, it’s easy to gather in-the-moment insights that are critical in predicting what customers want. AI helps create and deliver tailored customer experiences more effectively and transparently through highly targeted content. 

The problem with merely relying on gut feeling is that it doesn’t have numbers to back it up. That’s when data becomes crucial. For example, AI provides a careful analysis of your consumer’s past buying behavior hence giving you the opportunity to customize the way your ecommerce homepage should look and what products your customer should see. Instead of using an image that you prefer and feel would work, the AI-powered engine creates a dynamic website personalization that leads to higher conversions and greater customer retention with minimal effort. Machine learning does not hamper human intuition, but it can help differentiate between an inspired idea and a bad hunch.

Humans and machines can complement each other resulting in increasing productivity. This collaboration could increase revenue by 38 percent by 2022.
Accenture

In marketing, it’s already common to drive personalization programs or to enable predictive analytics. One of the greatest benefits of AI, however, is the ability to carry the workload and free up human time. Machine learning provides valuable insights on the behavioral patterns of the user base which help make business decisions. Because of automation, people get more time for strategic thinking and planning. With AI, it’s easier to scale, test, measure, and harness ideas, and instantly produce hundreds of iterations — something that would take ages for a human to do.

 

The dynamic duo: When AI gets creative

Data and tech only really fly when human thinking and vision are brought to bear on it.”
Paul Hughes, Founding Partner, and Strategist
Rothco (part of Accenture)

Marketing magic begins with technology-driven insights that enhance human creativity. When AI is done right, it can amplify and enhance human productivity, and open an exciting world of new possibilities. The idea is for humans to drive technology and for machine learning to heighten the capabilities of humans. 

AI can be used to validate and improve ideas by ensuring social relevance, while its human counterpart ensures that the idea retains its emotional resonance. This fusion drives business impact and marketing excellence. It’s a match made in heaven that can produce great results. But getting the most out of it requires good people and good tools.

For example, email marketing click-through rates can be hiked by over 50 % by using machine learning-based tools along with human intuition. Based on real-time user behavior and collected data, an AI model automatically pitches in a personalized message into the marketing content for each user, resulting in a higher click-through and open rate. Consequently, being informed about click-through patterns can help optimize future campaigns. Machine learning makes it possible with minimal effort and maximum accuracy.

AI can do its magic, but it needs to complement human intuition and creativity to reduce limitations and gain a higher level of control that lets you shape algorithm-based decisions and inform future activities. According to McKinsey, AI and machine learning will contribute a staggering USD 2.6 trillion in marketing and sales by 2020.

 

Enable human-centered, AI-powered personalization

Personalization should bring together interpersonal interaction and collective intelligence so connections become faster and computers smarter and more efficient. Human-centered, AI-powered personalization brings together human-curated signals and adaptive machine learning solutions. As a result, systems mature by learning from individual interactions and collective insights. In this way, humans have the ability to outplay certain limitations and restrictions posed by algorithms.

By 2020, businesses that use AI and related technologies like machine learning and deep learning to uncover new insights will take $1.2 trillion each year from competitors that don’t.
-Forrester

The intelligent insights are used in product and content recommendations to better engage customers, improve overall satisfaction, enhance customer experience, and encourage loyalty. And although AI helps optimize customer journeys and make better predictions on what is most likely to sell, human intervention is still critical and relevant, especially in some unexpected scenarios.

Let’s say that three customers buy a TV and a kids’ My Little Pony shirt in an ecommerce store. The machine algorithms interpret this as common behavior, and end up recommending My Little Pony shirts every time a user purchases a TV. But a human brain will be able to identify these unusual situations and make decisions accordingly, for example isolating some categories or subcategories for smarter recommendations.

At the same time, when it comes to testing, traditional methods such as multi-armed bandit are effective in test automation, but there are limitations. You need to test multiple content variations but when there’s a variation that’s constantly failing, the machine won’t be able to create new content to automatically replace it. Only a human can see these failures and come up with new content to test. So, even in test automation, the killer combo is machine automation combined with the logical thinking of humans.

At Frosmo, even though we’re continuously developing our platform’s AI capabilities, we know that human creativity is still the beating heart and the focal point of our product vision. When combined with the proper use of AI, these two make the perfect winning pair.

The idea is to not replace good human intuition, but use smart technologies to facilitate the inception and development of creative ideas that will enhance and further improve marketing efforts and strategies.

 

Download the personalization ebook for some insights, examples, and practical tips for different industries, such as retail, media, and iGaming.

personalization ebook


About the writer:

Tiina Krokfors is a multilingual ecommerce/SaaS professional with experience supporting international clients in a variety of business sectors. Her degree in Engineering and experience in front-end development allows her to combine deep-seated technical knowledge with a value-based approach to customer success. The biggest motivators for her are translating business strategies into innovative and intelligent digital solutions and delighting customers.

Recommended for you

9 personalization trends to keep an eye on in 2020

Growing your ecommerce business faster than the market is not an easy feat. Heavy investments to customer acquisition might be irrelevant if your service is not living up to the promises and standards that are set by the best at the market. However, the opportunities are out there: the internet is full of ecommerce sites that are just simply bad or close to horrible. Either there’s a new site with a “fantastic” fresh look that is missing key usability features or there’s an old-school site that makes you almost sick just by looking at it.

This is the opportunity to grow your market share. Simply put: the better your service delivers, the more you can also invest in customer acquisition. The fastest and most effective marketing investment is to invest in personalization. With personalization, you’ll grow your service revenue and customer lifetime value. That is because, with personalization, you can drastically improve your site usability for each and every customer.

Here are some personalization tips and trends in 2020 to help you stay ahead of the competition:

1. Balancing personalization with data privacy
Although more and more customers are willing to exchange data for convenience and more differentiated experiences, organizations will need to start finding the balance between personalization and privacy. Making the most of personalization doesn’t only entail serving compelling and relevant content. The key is to create great customer experiences through the customers’ shared preferences while still respecting data privacy regulations, safeguarding customer data beyond mere compliance, and ensuring that processes are more transparent.

2. Marketing teams will evolve and will start innovating customer journeys across all touchpoints
As customer experience overtakes price and product as the key brand differentiator, companies expect CMO’s (Chief Marketing Officers) to take advantage of new technologies to drive growth. Because of this, marketing teams will continue to evolve toward delivering world-class customer experiences.

Personalization continues to dominate the ecommerce industry so the marketing roles will become the key to creating innovative customer experiences to pave the way to driving and growing revenue streams. To achieve this goal, marketers and data scientists will collaborate and form a cohesive data-empowered team to innovate customer journeys and orchestrate engagement across all touchpoints.

3. Irrelevant digital advertising will decline
Gone are the days of irrelevant, annoying, and intrusive digital ads. Customers become more engaged with brands through a multitude of channels so they prefer ads custom-made to their interests and tailored to their preferences and recent behaviors.

More than ever, the pressure is on for marketers to truly innovate customer experiences even for first-time website visitors. Relevant and personal messages that cater to customer needs must be consistently delivered across the entire customer journey. Companies are re-engaging their potential customers with smarter product recommendations through showcasing ads with highly relevant products instead of posting generic social ads. Context-based personalization allows immediate benefits.

4. Predictive personalization will continue to prevail and AI is no longer just a hype
AI and machine learning are no longer merely buzzwords and trends. There will be lesser one-time or one-dimensional projects as the analytics models will be embedded behind the scenes to drive personalized engagement with customers and to fully transform an organization by positively impacting revenue. Brands will place a far greater emphasis on having more quality data as personalization efforts will become more highly detailed.

In 2020 and beyond, brands will continue to invest in predictive analytics and leverage a powerful platform to fuel personalization. Many brands are already using it, with Netflix and Spotify leading the way. Using previous consumer data and algorithms related to browsing patterns, predictive analytics plays a crucial role in optimizing marketing campaigns and helping brands determine customer responses.Building and releasing predictive models from many years of historical data can be an overwhelming project that might never see daylight. The key is to start small and release often.

5. Loyalty is shifting and directed now towards relevance
Personalization may be a future-proof way for brands to understand customers and retain them, but the digitization of everything and today’s advances in technology push brands to go even further. The best use cases of personalization show delivering customer engagement not just at the end of the shopping funnel, but throughout the customer journey. So even first-time website visitors will discover increasingly relevant experiences.

Loyalty still matters, but it will no longer be achieved only through rewards, discounts, and other offers. Technology has now evolved to let brands listen to the likes and dislikes of their customers and serve them accordingly. And with their demands and expectations swiftly rising all the time, digital marketers and ecommerce managers should customize and deliver a one-to-one digital interaction to reach their customers in a more relevant and engaging manner.

6. Push for hyper-personalized customer experiences
With the growth of online content and access to unlimited information, customers have more freedom to move between brands. They now have the power to let brands know what they truly want to win them over. They no longer wait for brands to tell them why their products are great, instead, they research and learn on their own.

With that said, great customer experience will no longer spell out only efficiency and convenience but will also demand extreme personalization. Improvements in technology have made it possible to learn more about their customers and make it easy to enable hyper-personalization from content to ads to design to product recommendations and everything in-between.

By aggregating the data into detailed and accurate segmentation such as device type, time, geo-location, and many more, the goal is to achieve a 1-to-1 message. This means that content – everything from brand offers and messages to product recommendations – can be served to specific customer types based on a specific context, giving marketing the power to affect customer behavior online on a whole new level.

7. More focus on omnichannel delivery
Features in movie streaming apps such as ‘continue watching’ and ‘watch from the beginning’ have revolutionized personalization. This approach is also being leveraged in ecommerce to enhance the experience of returning customers. For example, if a customer started their interaction with a brand on a mobile app, this experience would continue as the customer moves onto the website. By remembering the preferences of shoppers based on their previous sessions, brands allow customers to pick up exactly where they left off when they return.

In 2020, having a headless CMS in place to enable you to reuse the same content delivered through different channels will be more vital than ever before. It makes creating effective personalization easier. With smart TVs, mobiles, laptops, etc., customers are now more connected than ever, and they expect a consistent experience and high-quality content across all digital channels.

Omnichannel personalization allows brands to combine offline and online data to create customer profiles that deliver more tailored experiences across all customer touchpoints and more consistent relationships across all channels.

8. Technology consolidation into a single platform
The challenge of personalization becomes more complex because of the massive amount of data available on just one single person. Solving this requires moving a lot of the acquired information, collecting, tracking and data interpreting data. Marketing teams will now seek to find solutions that can integrate targeting requirements into a single yet comprehensive platform.

With the high volume of marketing technology acquisitions for the past years, along with new integrations across martech systems, a more consolidated solution with integrated capabilities will be more beneficial to marketers in the long run.For example, media company A-lehdet had more than a dozen websites with various technical solutions, but simplified it and came up with a technical solution flexible enough to meet the ever-changing demands and desires of its audience.

9. Creating trust to increase loyalty and drive growth
Trust will be an all-powerful commodity. So seeing personalization as a ‘quick fix’ for brands to solve conversion problems and improve revenues is a losing battle. As concerns about data use and general skepticism about how brands operate continue to grow, brands need to be extremely careful about how they use personalization. By doing this, an organization can demonstrate it is trustworthy and make consumers feel valued as individuals.

Delivering highly relevant messages is a golden ticket to creating long-lasting customer relationships, which ultimately drives loyalty and sales. But not at the risk of misusing data, which could not only spell disaster for an organization but also run the risk of irritating and losing customers.


Personalization will prove as a powerful investment and will gain a distinctive edge in the new decade. However, it will have to be accepted as a long-term strategy to increase brand loyalty and drive growth in the company. More and more brands will offer hyper-personalized recommendations and shopping experiences on multiple channels and at every customer touchpoint.

Ecommerce companies who take advantage of machine learning technology will see significant improvements in their personalization efforts. With all of the above tips and trends, the “Roaring ‘20s” nickname for the decade will surely hold true. Marketers will surely have their hands full as they strive to deliver on the promise of personalized customer experiences and aim for a narrowed gap between what customers expect and what marketers are able to deliver.

Ready to explore personalization? Start by completing our personalization maturity assessment and get your personalized report on where to start.  We’ve put this tool together based on our experience with implementing personalization across industries and clients over the last 10 years.

________________________________________________________________________________________

About the writer:

Mikael Gummerus

Mikael Gummerus is the founder and CEO of Frosmo. He’s a visionary and a firm believer in the adoption of microservices architecture, headless ecommerce, and CMS. With more than a decade of experience as a web entrepreneur, he’s passionate about growing consumer expectations of superior digital experiences.

Recommended for you

The era of personalization begins now

The majority of companies implement personalization from a business perspective as campaigns or stand-alone features. From a technology point of view, personalization is often implemented as a separate stand-alone application. 

Winning companies, however, understand and enforce personalization as an integral part of their business. For them, personalization is a seamless part of the company’s technology architecture. The best companies adopting the digital-first approach like Airbnb, Uber, and Netflix, consider personalization as a vital part of the overall customer experience. They firmly believe that the ability of their company to successfully perform this transformation will define their success or failure in the future.

For years, there has been a steady influx of content, tips, and applications about advertising and website personalization. Yet from the consumer’s perspective, the experience is surprisingly seldom personalized nor positive enough. But when it is, it truly stands out. Companies like Uber, Netflix, and Airbnb are the best examples. 

At Frosmo, we’ve witnessed the same pattern while talking to companies and partners. Few companies have been able to implement a personalization strategy that stands out.

Let’s begin with the current situation in the market. When it comes to the maturity of personalization and how it has been adopted, we believe that the market can be split into three groups of companies. 

The first group is a significant majority of companies that have just managed to get started with personalization. These are the companies that are still trying to cope with the digitalization of their businesses. For them, personalization is still about testing with campaigns and simple separate one-to-few feature applications. It’s all about implementing something fast at a low cost. 

Unfortunately, with this approach, because personalization is mainly about tactical conversion optimization, it can be quite challenging to stand out in the market, and it’s nearly impossible to create a positive effect on the customers.

The third group is the digital-first companies, mainly platform companies like Uber, Netflix, Airbnb, and Amazon. For these companies, personalization is an integral part of their technology stack – it’s not a separate one-to-few feature application. Personalization is natural to all of their touchpoints with customers. Only a handful of companies in the world are at this level. They employ people who think and breathe digital business and those technically-skilled enough who can develop personalization directly in their platforms. 

Between the first and third groups is the second group, which are companies that have realized that personalization is the key to success in digital business. There are not too many companies in this group – or at least not yet. These are mainly more prominent companies that have started to realize the need to serve customers so well that they don’t even consider switching to other providers. 

At its best, personalization is not about freaking the customer out, but to help make everything easier and the customer journey smoother. Alex Gash from Gartner explains the logic behind this in his post about the parallels and critical differences between B2B and B2C personalization.

The shift of the first group to the second group is why we believe that the era of personalization is just about to begin. In the second group, companies start to plan personalization so that it becomes a part of the business processes. They also realize that personalization technology must be included in their technology stack. 

The graph below aims to visualize the maturity of personalization in the market. The horizontal line is about the business processes: is personalization seen as a one-off campaign or a continuous part of all of the touchpoints? The vertical line is about the technology maturity – is personalization a stand-alone application or is it an integral part of the technology stack?

Personalization maturity

Now, what can companies do to ensure a smooth and good transition from the first group to the second?

Three business process requirements for the next level personalization:

  1. A company must be able to define what personalization means and integrate it as part of their brand, value proposition, and customer experience. 

    As it is getting more and more difficult to create a competitive advantage in the modern world, customer experience in digital channels is the solution. Personalization is a crucial part of the customer experience. Thus a company must learn, understand, and define its approach to personalization at every level of the organization. 

  2. A company must be able to create and plan comprehensive, personalized customer journeys in every vital touchpoint and for the critical customer segments. 

    As companies define what kind of key customer segments are most important for their businesses, they must be able to define how their personalized customer journeys should look like. There should be a practical and easy-to-grasp guide that allows implementing personalization quickly to different customer touchpoints. This guide should also draw which systems are responsible for what, and who is responsible for which process, ensuring an efficient and effective process with minimal confusion. 

  3. A company must be able to continuously develop, analyze, improve, and automate these personalized customer journeys with a data-driven approach. 

    Once the personalized journeys for key customer segments have been created, they also have to be implemented. This is why the technology has a significant role not just for implementation, but also for continuous iteration. The nature of personalization and perfecting it is iterative and based on data.Personalization requires lots of trial and error, hence automation is critical. Machine learning algorithms and AI models can help, but at the same time, it’s also important to ensure that there are standardized, easy-to-use, and fast-testing environments, and a centralized data collection for analysis.

 

Three technology requirements for the next level personalization:

  1. Personalization technology must be part of the company’s user interface technology. 

    A modern user interface or the front end is typically built with a JavaScript library like React. These modern open-source Javascript frameworks allow developing a scalable, fast-loading user interface that works for any screens. Implementing a separate stand-alone application with a simple Javascript tag to this kind of front end compromises the performance, creates instability, and risks the further development of the user interface as developers are clueless of what’s interfering with the front end. Instead of installing a JavaScript tag-based personalization technology, personalization should be implemented to the front end as part of the technology stack. In this way, the developers who are responsible for the front end can control how the personalization works. At Frosmo, we’ve built an elegant approach to this, where we have framework-specific easy-to-install connectors. This video of AmazeRealise explains how this works and how it is implemented. Frosmo’s documentation explains how the connector works and its implementation. 

  2. Personalization technology must fetch content from the company’s centralized CMS or ecommerce platform. 

    If personalization technology is implemented as a stand-alone application, marketing typically begins to use this application and unintentionally duplicate content. This means that the company starts to have two places for content in the company technology stack. In the personalization application, you have separate images for the products or different text for offers or A/B tests. This creates confusion and leads to inefficiency. For example, the people who are responsible for content don’t understand why there’s a visible banner in the user interface that shouldn’t exist at all. It also compromises the further development of the stack. When properly done, personalization technology is connected to the Content Management System and/or ecommerce platform. The content becomes available in the personalization system. The content still remains in the correct place and the personalization system tells the user interface which content to fetch and to which customer to deliver. This doesn’t concern the content that’s only in the user interfaces, but also all channels for marketing. For this reason, Frosmo has developed an easy-to-implement connector. You can take a look at this example with Contentful.

  3. Personalization technology must be integrated with the company’s technology architecture over APIs. 

    As companies add new channels and there are more and more data about the customers in different systems (or in Customer Data Platform), the development of the company technology stack must be flexible, transparent, and easy to connect with different systems.

What the future holds for personalization

A significant majority of companies are at group one, where personalization is done with single-feature applications performing basic conversion optimization. The third most advanced group consists of the digital-first platform companies that have implemented personalization into all of their business processes and technology stack. 

Now the biggest opportunity for both the companies and their customers lies in group two: a delightful customer experience based on personalization and part of every touchpoint. 

To shift from group one to group two, companies need to be able to define how personalization creates a competitive advantage for them, and how it can be implemented on all of their business processes. They also need to be able to implement personalization as a seamless part of their technology stack connected to their user interface technologies, content management system, ecommerce platform, customer data platform, and marketing technologies – all this over APIs that they can build upon. 

And this will be the future of personalization – finally a promise of the best possible customer experience to all of us in every touchpoint with our favorite brands and companies.

Start by assessing where you are in personalization with the Personalization Maturity Assessment Tool – and find out how you stack up against the industry benchmark. This is a specially-designed tool carefully put together from more than a decade of knowledge and experience with implementing personalization for businesses.

________________________________________________________________________________________

About the writer:

Mikael Gummerus

Mikael Gummerus is the founder and CEO of Frosmo. He’s a visionary and a firm believer in the adoption of microservices architecture, headless ecommerce, and CMS. With more than a decade of experience as a web entrepreneur, he’s passionate about growing consumer expectations of superior digital experiences.

Recommended for you

How personalization transforms online retail in 2020

Better optimized shopping funnels, lower bounce rates, better ROI in advertising spend, larger average order sizes, better cross-selling, and the list goes on. Do these challenges in your online retail sound familiar? These are the pain points we see our online retail customers tackle every day. We strongly believe that the best way to tackle the challenges and get the best possible business results is the website personalization.  

In this article, we’ll explain what personalization is, why is it important, and what are the best practices to optimize your online retail business in 2020 and beyond.

What is personalization in online retail?

Personalization is about creating a custom-tailored and seamless customer experience based on what you know about a person’s needs, wants, and preferences. Personalization enables online retailers to move away from the one-size-fits-all approach by presenting the relevant message at the right time across all touchpoints along the customer journey.

When customer needs can be anticipated, it’s easier to enhance customer satisfaction and drive impact to the bottom line. Personalization establishes the foundation for the ultimate omnichannel experience, paving the way to enhanced customer experience across all channels and devices.  

In practice, two dimensions are needed for a meaningful personalization. First, you take the history of the visitor, i.e. the earlier purchase and exit history, downloads, product, and content searchers. That information is coupled with contextual information such as day of the week, season and weather, location, device, and campaign.  

When you combine the history and the context information, the real personalization starts. Personalization is the core part of the experience that online businesses provide. Continuous testing is needed to optimize the experience as well as to find the optimal elements to drive conversions and other KPI on the website.

history and context in personalization

 

Why is personalization important?

The attention span of an average consumer is getting shorter and shorter. On desktop but even more critically on mobile, the “real estate” of providing the relevant content to your web visitors is really small. The first message needs to be personalized to get the attention of the web visitors and present to them the next clear steps to follow. 

Think of personalization as a very good customer service. All website visitors have unique circumstances and therefore, they are in different stages in their buying journeys i.e. one is visiting the website for the first time, one is visiting the website through google ads campaign, and one has abandoned the shopping cart twice already. 

So, it really makes a business sense to provide dynamic content to meet the needs of different people in these distinctive stages of their customer journeys. Simply put, personalization is helping your customers to find the most relevant content to move through the buying journey in the most efficient way. 

For retail brands, personalization can be quite challenging not only because of too many competitors, but also due to the number of places, and ways that customers can shop.

A recent BCG study found that with personalized online retail stores, consumers are 10% more likely to add additional items to their baskets and 40% more likely to spend more than they had planned. Moreover, when asked to rate a particular retailer, customers who experienced a high level of personalization provided net promoter scores that were 20% higher than those of customers who experienced a low level of personalization. Customers are increasingly willing to share personal data with trusted brands in exchange for tangible benefits, such as an easier and faster buying process.

 

The business benefits of personalization

It’s important to think of a business case on two levels; one is about making more conversions and revenues, and the other is reducing the expenses. The KPIs that most online retail businesses are looking for are increasing conversion rates, average basket sizes, and loyalty

Expenses can be reduced by faster experience optimization thorough hypothesis creation and with algorithm-based experimentation. Ecommerce customers also report having to do less front-end development work as it’s easier and quicker to do that with personalization software.  Marketers also report a reduction in acquisition costs and improvements in conversion rates from advertising.

Real business value of personalization

Benefits to consumers:

  • Better overall customer experience
  • Increased and improved relevancy of content and experiences
  • Reduced clutter when visiting the site, which allows for faster interactions with the brand
  • Easier to find relevant products and services
  • More control over the customer experience, which leads to improved brand trust and loyalty
  • Improved engagement with the brand 
  • Better connection between personalization brought by marketing automation tools and  website personalization

Benefits to online retail stores:

  • Optimized shopping funnels
  • Reduced bounce rates
  • Brand credibility and enhanced authenticity
  • Improved customer insights and data
  • Increased conversion rates and more opportunities for customer engagement
  • Improved customer retention and customer acquisition
  • Increased customer satisfaction and better customer support
  • Empowered salespeople
  • Increased revenues, sales, order values, and subscriptions
  • More traffic to the site and more customers through referrals
  • Improved brand association and loyalty

In omnichannel businesses, many customer journeys might begin online and lead to in-store purchases – or even the other way around. The correlations and KPIs get slightly harder to measure, but the same basic principles still apply. These lead to increased revenues and profit (assuming pricing, performance, availability, shipping, assortment, etc. are up to par).

The positive experience (that in the first place led to the visitor’s transaction) in the service consequently increases loyalty and word of mouth based brand recognition.

 

The anatomy of personalization in the online retail

By now, we’ve established that for the online retail business to thrive, the customer experience needs to be exceptionally good and personalized. Personalization starts by knowing who your customers are. 

Most commonly recognized customer segments for retail are based on: 

  • Origin (campaigns, other sites, etc)
  • New / returning users
  • Purchase frequency, recency, and volume
  • Individual interest areas
  • Past behavior
  • Collaborative recommendations
  • States in the purchase process
  • Demographics, location, weather, device, etc. 

Secondly, you need to think of when personalization happens in the online store. What is the most ideal point in the customer journey for the dynamic content to be shown to the segment or individual? It’s important to Identify the typical points where the visitors may abandon their cart, leave the site, or bounce. This is the first step to design a strategy for inviting visitors to carry out the transaction or to continue the session. Contextual and dynamic calls to action (CTAs) give the visitor the motivation to proceed with an action or transaction.

A good time to show personalized content can be, for example, after the visitor has spent some time on the site, added a product to the website and is about to exit or leave the shopping basket. Combine these triggers to create, personalize, and implement the entire user journeys on your online stores. 

The third dimension is to define the place where to show personalized content. Homepage, category page, product page, and shopping basket to name a few. 

To complete the personalization, you need to think of what content you want to show your segments or individuals. Dynamic content can include banners, pictures, textual content, components, content blocks, or navigation adapted to different audiences explained earlier in this article. Relevancy of the content displayed for the visitor increases conversion and engagement while improving the customer experience. 

Anatomy of personalization

Recommendations for optimized shopping funnel

When many of your products are similar, it’s essential to help customers pick the right product for their needs. Product recommendations are a powerful tool to drive discovery, promotion, and cross/up-sell in online retail without the need to manually define the related products. AI-powered recommendations ensure that you’re harnessing all of the data available on every touchpoint of your online shop. You can leverage this data to start predicting what the web visitor would like to see next. This continuous combination of learning from a product interest, their profiles, and the context of their visit, means that you can offer highly targeted, relevant, and engaging recommendations. 

Accenture has stated that 91% of consumers will remember a brand and be more likely to return when they have been provided with relevant offers and recommendations to engage with. We’ve seen brands experienced a 20% increase in customers engaging and viewing casino content when in the sport lobby with personalized recommendations.

Case study: On the front page of Clas Ohlson’s webshop, the Frosmo Platform is used to show the most viewed and most bought products. When buying a product, there are many different ways of recommending other products to accompany the initial item of interest. For example, if you buy a robot lawnmower, your recommendations will show the right add-ons for your lawnmower such as cables and tools to complement the product; extras such as a storage unit, accessories; and finally, what others have bought with the lawnmower. With add-ons, upselling, and recommendations, Clas Ohlson sees an 8% increase in average order value and a 27% increase in bought articles.

 

Make a data-driven decision with continuous testing

Experimentation is always crucial as many improvements can cumulatively turn into big conversion rate generators. Testing helps you to gather data to show what should be developed next, reduce risks in costs, understand the audience on a deeper level, and solve the pain points that your visitors might have. 

We recommend to start testing with a solid hypothesis – know why you want to test, what are the conversion rate goals, and the end expectations. Use A/B/n testing to find out which variations perform better on a website. Examples of what you can test are banners, recommendations, navigation, CTA’s, social proofs, and content.

Customer case: With customers’ expectations increasing, Reima wants them to experience positive surprises when shopping online. For example, Frosmo is helping Reima to explain the uniqueness of the clothes by highlighting hero products and bringing extra stories to support faster decision-making.

This involves continuous smaller improvements to the site and thus A/B testing has increased its importance. Continuous analysis of the test results running on Reima’s sites has been crucial to making data-driven decisions. Frosmo plays an important role as it offers the testing capabilities and allows fast time-to-market for visitors to see continuous new elements on the site.

Multi-armed bandit testing makes testing faster and smarter with machine learning. With multi-armed bandit experiments, you’re able to continuously learn and optimize your site whilst running your test. You’ll be earning while conversion rates are going up.

 

What’s next?

Still wondering if personalization could improve your online business? Use our business case calculator for retail businesses to quickly and easily evaluate the business impact of personalization on your online business. This is a specially-designed tool carefully put together from more than a decade of knowledge and experience with implementing personalization for retail businesses. Actual results vary between businesses.

 


About the writer:

Katja Kokko is passionate about strategically developing digital businesses and creating memorable digital customer experiences on a tactical level— what she gets to do as Customer Success Director with her clients and her team. She is a growth hacker by heart and with her exceptional interpersonal and leadership skills, she thrives in challenging business cases as these challenge her to think differently and out of the box.

 

Recommended for you

Is your marketing automation delivering the WOW effect?

marketing automation delivers wow effect

There’s a lot bubbling under in the MarTech space at the moment. I was in the MarTech Nordic 2019 event yesterday listening to inspiring marketing leaders from the most innovative companies in the world talking about what’s hot in marketing, Airbnb and Über to mention a couple. 

You’d probably think that in such an event, they’d talk about all the cool technologies they use to master the markets. But no, quite the contrary. We were reminded that technology doesn’t solely solve the core marketing problems of creating unforgettable experiences. Speakers also emphasized the importance of humanization in technology and that storytelling gives the customer or user a voice to tell their stories freely. 

It’s really worthwhile to think about why we fall in love with some brands and why the rest are put in the category of insignificance. What makes brands loveable? Monika Werthén, Marketing Director at Über Nordics, put it nicely, saying, “All the brands need a bit of fluff – that secret ingredient that makes people relate and love them.”

Now let’s go back to the world of MarTech. During the last couple of years, most marketers have invested in marketing automation technology in hopes of having a magic machine to get the brand message across their target groups. And yes, marketing automation has delivered – to a certain point. But something is definitely missing from the package. 

What I could hear from the marketing decision-makers I talked to during the event was a slight frustration that the marketing engines they have built have stopped delivering the results. Is it because many are using the same kind of content and tactics? Or is it because we think like engineers too much and focus on getting the engine working but at the same time forget the importance of fluff and the whole customer experience?

Many were also frustrated that the personalization you get in the marketing automation campaigns stops once the customer or website visitor lands on the website. All the intelligence that is gathered about the preferences of the customer/visitor sits in CRM or marketing automation tools and not utilized enough to continue the unique customer journey on the website. 

Personalization software complements marketing automation tools to continue the unique customer experience on the website. It gives more freedom for marketers to express the brand all throughout the journey and creates possibilities to create those small moments that make people go WOW, they know me, and appreciate my choices. 

To sum up, every visitor is different and every visit they make is different. Relentlessly seek the information to know your visitors as much possible and use the data to create personalized customer journeys on your website. Personalization software makes magic happen a bit easier than before.


About the writer:

Tanja Säde is the Chief of Marketing at Frosmo. With 20 years of experience in technology marketing, she is always curious about the latest technologies and marketing trends. She is enthusiastic about creating superior digital customer experiences through data, personalization, and AI. Outside of work, she is a yoga addict.

Recommended for you

Diversity as a key strength: From unique experiences to a unified culture

Frosmo 2019

There is an increasing demand for international experience and a need for world-class talent amongst the workforce as more companies aspire to expand to overseas markets. A study shows that the more diverse the team is, the more productive it is.

As more companies continue to expand across borders, multinational and cross-cultural teams are becoming more common. More businesses are slowly heading towards this path resulting in an increase in diverse knowledge. Diversity, when properly led, can become an unbeatable advantage for international business growth.

But along with the benefits of more insights and expertise also come the barriers that global organizations face to keep the corporate culture intact. How should diversity be managed? How does it affect the company culture? How should a company culture be changed in order to support diversity? I’d rather say not at all. Why? The corporate culture should be developed at the very beginning to recognize diversity and individuals as they are, which are key elements to reach equality and integrity. 

At Frosmo, we believe that diversity is key to unlocking innovation and more brilliant ideas in the workplace. Knowing other cultures opens vast opportunities for international growth.

Although Frosmo is based in Finland, we operate on a global basis, and our customers and employees come from around the world. Currently, around 50% of our employees working in the HQ office in Finland are originally from other countries. We came from different backgrounds but we work together as one team. We believe that having different cultural backgrounds is a great asset to any company. Since we are a growing software company, Frosmo is under constant change. This makes the company dynamic, but this also requires everyone to be more flexible in adapting to changing circumstances. 

With the company growing to hundreds and people dynamics constantly changing, the challenge is to create a strong and solid foundation that will enable the culture and the company to scale at the same time. Challenges come all the time and there’s no greater force than united company culture.

 

Building a solid foundation is key

As we know, culture makes the difference between average and great companies. Because a company culture co-exists with how the company is perceived, it’s something that should be considered as an early priority in any organization.

Corporate culture is often overlooked. The company culture is not something that can be built overnight. There seems to be a lot of talk around the importance of the culture but not sure if there’s a real touch on it and if it’s authenticated in everyday life. Where to start in strengthening the culture? If you have the chance, start from the very bottom and from the very basics questions such as the concept of humanity in the company. Focus not only on defining them but also on measuring how strong the impact is on the daily operations. 

If the culture and trust are not deeply rooted, then you will most likely fail in the long run. After building the base for trust with the right amount of respect, follow the values to be implemented in action. How are your company values and should they be visible in the daily working life? What do values mean in practice and action? How to measure values and why is it important to make sure there’s proper integration?

Because as the great John Wooden once said, “The true test of a man’s character is what he does when no one is watching”. We are truly defined by the things we do, in what seems to be trivial things or smallest details, when no one is looking.

 

Diversity is not part of a process – it is who we are

At Frosmo, one of our values is ‘Be yourself together’ –  A united team that respects diversity and each other. We measure employee satisfaction in an annual survey and the next one is just about to start.

Based on the results of our last employee satisfaction survey in 2018, we’ve managed to build a strong solid base for our culture and growth. We can be especially proud that we work with Frosmo values in mind. Over 90% think that we speak to each other with respect (agree or completely agree) and over 80% feel that problems in our work community are solved without much intervention. In practice, this means how people confront each other.

LifeatFrosmo survey 2018

Why is this measurement important? We all want to be recognized as we are, right? How people confront others in your workplace tells tons about corporate culture and values. We all have the natural need to be confronted with respect, otherwise, we feel that we don’t exist or that our presence isn’t meaningful enough. Positive recognition gives us wings, a purpose for being, and a sense of belongingness. 

Meaningfulness seems to be currently on top of the business leadership trends along with company culture and diversity. Feeling significant or having the purpose at work is regarded as critical in employee satisfaction, in his overall condition at work, and in his drive to stay in the company. If we feel that our work has a meaning, we are most likely to perform better and become more committed to the company. But it doesn’t only come from clearly understanding your targets and their connection to company goals. It also relies on your sense of belongingness and if you feel that as an individual, you are appreciated and valued in your community.

How do people see you or how do you see others in your workplace? Do you feel valued despite different cultural backgrounds? When everyone shares a common cultural background, it can be easy to forget how different we all are from one another. Incorporating connectivity and empathy in everyday roles opens the possibility of accepting different cultural needs.

Stronger together as ONE Frosmo!

 


About the writer: 

Marjo Kivistö is the Chief People Officer at Frosmo. She is a passionate and experienced leader who sees people as the most important part of a company. As a big believer of good leadership seen through strong company values, she advocates for open culture and drives a clear business direction to give people wings to achieve success and do amazing things.

Recommended for you

10 conversion rate optimization best practices in iGaming 2020

The iGaming industry is now a $45 billion business worldwide and is expected to grow at 14% annually. New regulations, technological advancements, and fierce competition are shaking up the way customers are betting online. Ever-growing numbers of iGaming operators are seeking to differentiate themselves to stand out from the crowded market by creating unique experiences.

The most important business objectives for iGaming operators are reducing unit costs in the acquisition, customer retention, and increasing customer lifetime. Many companies spend big on advertising to acquire new players but many of those efforts are diluted if the website isn’t performing to its best potential or meeting the players’ expectations for a good gaming experience.

In addition, advertising is becoming more regulated and is now restricted in certain markets, meaning that player engagement is even more important. One player experience doesn’t fit all, so it’s important to recognize the importance of tailoring player experiences to their individual preferences.

In this article, we’ve collected the best conversion rate optimization practices for your iGaming business in 2020 and beyond.

Costs of acquiring new players

 

 

A 10% improvement in conversion reduces the acquisition cost by $41 per player and improves the profit margin by 8%.

 

 

 

1. Tailor player experience to their individual needs

One size doesn't fit all in iGaming

Recognizing individual player needs is the start of better conversion rates. This is called personalization and it starts by knowing your players’ preferences and defining the segments the players belong to. What casino games are they more likely to play? What sports team do they follow? What is their favorite horse? How willing are they to try something new? Most commonly recognized player segments for iGaming are based on:

  • Marketing source
  • Interest identification
  • Player profile identification
  • New or returning players
  • Understanding player intent
  • Early churn potential
  • Early VIP potential

The best results in conversion rate optimization are generated when historical player data from different channels is combined with real-time behavioral data. This combination of data can be used to deliver personalized recommendations, content, and promotions that players are most likely to engage with. Engaged customers will lead to better customer retention rates and higher customer lifetime value.

 

2. Make the homepage relevant for your players

By now, we’ve established that for the iGaming business to thrive, the player experience needs to be exceptionally good and personalized, but player experience requires much more than a pretty website. Ultimately, it’s about understanding your players’ needs and personalizing the player experience while reminding them of the thrill of finding new games to play.

The aim of any personalization is to offer content or guidance that is relevant to a player’s situation and individual needs. The relevancy drives the likelihood of conversion rates and transaction value. When you know your players, personalization can be applied dynamically based on a horse race, or game schedules, the player’s channel (e.g. mobile, desktop), geolocation, time of day, or real-time behavior. For example, if a player is behaving in a way that can be interpreted as a high intent to convert and purchase, you might want to promote options such as live games or new bets.

Personalization will allow you to take advantage of that intent, leading to greater conversion rates and customer satisfaction. The ability to show relevant and personalized content on the first page of your service can have a 4x impact on conversion rates. For example, ushering your roulette-playing live casino customer back to your service and directly loading the live roulette game lobby. Or ensuring that a Real Madrid football fan who bets routinely on the team is served a pop-up acknowledging this type of behavior and welcomes the player with Real Madrid-themed content and a relevant bet option.

Here are examples of tailored personalized experiences that are tied to business objectives:

Tailored personalized experiences that are tight to business objectives

Customer case: When a user visits TwinSpires, they’re usually ready to bet on their favorite event or horse. So it makes sense to highlight that particular event or horse as early as possible in the player journey. By personalizing which races a user sees, and segmenting according to previous behavior on the site, the convenience of using the site greatly increases.

TwinSpires relies on Frosmo to increase conversions and acquisitions

 

3. Learn from player behavior with the help of AI

The preferences of players are difficult to predetermine and preferences also change over time. Artificial intelligence accelerates understanding player behavior which is the first step towards an excellent player experience. Here are some of the best practices on how to continuously learn about the players’ behaviors and how to implement those learnings to offer them the most suitable games, bets, and content. Collaborative filtering is a common technique to find similarities in players and recommend the next slots or games according to the most views and played games.

The main applications of collaborative filtering can be:

  • Discovering similar players.
  • Discovering similar games.
  • Finding the potential interest of a user in specific products for targeted marketing (recommendations).

Apply AI for VIP user prediction. Only between  1-  and 5% of players are VIP users but they contribute 60- to 80% of the revenue and are therefore a very important group to any iGaming operator. Earlier and more accurate VIP customer prediction models bring better customer lifetime value. For a player, AI creates a more immersive and fun gaming- and betting experience. With AI, you can create a feeling that the casino is tailored to the player’s individual needs. Plus,  AI helps identify behaviors that might lead to loyalty early on and is then able to serve those customers with special offers and player journeys.

For the best conversion results, real-time onsite behavioral data should be combined with the CRM data. Individual VIP player prediction can achieve an accuracy of up to 86% in as early as 3 days after sign-up. Prediction data is used to tailor the journey according to the players’ interests, including streamlined navigation bars, call-outs, recommended games based on profile and real-time behavior, reorganized game listings, and campaign targeting. More examples are given later in this article.

Reduce churn as early as possible. By definition, churn represents the act of a customer leaving the platform for good and specifically, in iGaming the churn rate is relatively high. Therefore, it is important to address customer churn early to employ a successful retention methodology. Implement supervised machine learning models to learn from users’ past behavior (CRM data) and predict future probabilities of  a user leaving the service.

 

4. Use social proof to promote games and drive a sense of urgency

Social proof plays a major role in your players’ purchase decisions. Even when people are impressed by your services, they almost always look at the actions of others to guide their decision-making process. Simply, social proof helps you build trust in your online business. You might want to show the first-time player how many active players there are on the site and what they are playing at that particular moment. Testimonials and game ratings are also effective social proof to promote games and increase conversions.

 

5. Cross-sell for better customer retention and customer lifetime value

Different platforms for casinos and sports bring challenges to iGaming operators as they typically don’t share customer data and insights. With personalization, the behavioral data can be easily shared between the two platforms allowing highly targeted content tailored to players’ preferences. This can also create opportunities to cross-sell between the platforms, such as displaying casino games that the player is most likely interested in and showing the content in the most relevant areas when the visitor is most likely to engage.

This approach provides a connection between your two main products, which will increase engagement and conversions. The best practice in providing the cross-sell promotions of casino games is to use collaborative filtering combined with player segmentation.

Customer case: Dafabet introduced new hovering menus to their site, where new and old games can be recommended to players in a more personalized and visual way. By suggesting new games according to the customers’ tastes, Dafabet has been able to increase their gross sales significantly.

Dafabet Connect receives 65.6% of their downloads through Frosmo modifications

6. Achieve player loyalty and retention with these proven tactics

Keeping the right customers is valuable because their conversion rates are naturally higher without high acquisition costs. According to Harvard Business School, a 5 % customer retention improvement can easily lead to a 25 to 95% increase in earnings. That’s why it’s important to pay attention to loyalty and retention tactics. Below are some examples of proven methods that are driving loyalty and retention.

  • Make returning customers feel welcome through dynamic front pages showing content according to the last played or the most played game.
  • Predict VIP players and those who are about to churn. Use social proof tactics and show promotions to engage target players.
  • Use RTP figures to recommend certain games to individual players to help them be successful.
  • Use gamification to increase player participation e.g. introduce progress bars and reward callouts during games.
  • Use personalized CTAs to push the right bonus at the right moment. Use deposit callouts and smart deposit preset to acknowledge the fact that players’ deposits are getting low.
  • Maximize the time that the players are in your service. Implement recommendations and show new games and casino slots according to the players’ interests.
  • Drive CTAs and recommendations as A/B tests or with AI-powered multi-armed bandit testing to show the most relevant games and content according to players’ behavior.
  • Elastic search bars learn and self-optimize to display relevant content according to a player’s personal intent.

 

7. Recommendations for better engagement

Recommendations are a powerful way to increase conversion rates and the player’s lifetime value. AI-powered recommendations ensure that you’re harnessing all of the data available on every touchpoint of your service. You can leverage this data to start predicting what slot/game/market your player would like to see next. This continuous combination of learning from a player’s product interest, their profiles, and the context of their visit, means that you can offer highly targeted, relevant, and engaging content.

Statistics in iGamingRecommendations could reorder your casino lobby by creating an entirely new look and feel, or vary which sports markets are displayed to each user. Doing this provides a relevant and engaging experience that will increase retention. Accenture has stated that 91% of consumers will remember a brand and be more likely to return when they have been provided with relevant offers and recommendations to engage with. We’ve seen brands experience a 20% increase in customers engaging and viewing casino content when their sports lobby has personalized recommendations.

Customer case: 188BET can be sure that they are serving the right content to the right customer at the right time while minimizing their churn rate. Machine learning helps them select content based on a deep understanding of the players’ preferences.

188BET collaborates with Frosmo to reduce churn and grow lifetime value through artificial intelligence

8. Experimentation and testing

Hypothesis-driven developmentTesting is always crucial as many improvements can cumulatively turn into big conversion rate generators. Testing helps you gather data to show what should be developed next, reduce costs risks, understand the audience on a deeper level, and solve visitors’ pain points. We recommend starting testing with a solid hypothesis – know why you want to test, your conversion rate goals, and your expectations. Use A/B/n testing to find out which variations perform better on a website. Examples of what you can test are banners, recommendations, navigation, CTA’s, social proofs, and content.

Learn more about A/B/n testing from this short video:

A/B/n testing

Multi-armed bandit testing makes testing faster and smarter with machine learning. With multi-armed bandit experiments, you can continuously learn and optimize your site while running your test. You’ll be earning while conversion rates are going up.

Learn more about multi-armed bandit in this short video:

multi-armed bandit

9. Empower affiliate connections

The customer journey starts with the affiliate website and the continuous player journey needs to be built from that point. Improve your conversion rates by focusing on dynamic content on the front page through personalized player journeys. Your affiliates will benefit too, as the value will be maximized against competitors and will responsibly increase customer lifetime value.

10. AI for fraud detection and responsible gambling

Fraud and abuse can incur a significant cost for iGaming operators. The ability to detect them and take early action can have a significant and positive impact on your bottom line. Machine learning helps identify and make real-time judgments when a player shows behavioral patterns that are consistent with bonus abuse, promotion predators, and account hijacking. These measures also shield honest players, providing smoother user experience.

Responsible gambling operators ensure that their customers know to stop when the fun stops.  The introduction of machine learning algorithms can be deployed easily and quickly to identify users who are likely to self-exclude. Other ways to utilize machine learning include methods such as reality-check messages, promoting the setting of the account limits, and offering a time-out. With advanced segmentation, a customized player journey can match individual needs and tastes, while remaining responsible.

 


About the writer:

Tanja Säde is the Chief of Marketing at Frosmo. With 20 years of experience in technology marketing, she is always curious about the latest technologies and marketing trends. She is enthusiastic about creating superior digital customer experiences through data, personalization, and AI. Outside of work, she is a yoga addict.

Recommended for you

The positive loop of personalization through loyalty

The business case for investing in personalization has a simple proven formula. Personalization impacts the conversion rate and average customer value. The customers who complete transactions will be more likely to return and share their experiences – and become loyal. Frosmo gets customers into the positive loop of personalization business value that drives accelerated compound impact. The loyalty improvement is the “interest on interest” in personalization ROI.

personalization business value formula

The key business objectives and use cases for personalization vary between industries. In media, the key measure of success may be the engagement of visitors and the number of pages viewed. In retail, the average order value is the key measure and in travel, profitability is driven through maximizing sales of ancillary services. iGaming typically focuses on the number of games played per session, deposits, and loyalty.

Irrespective of the industry, Frosmo customers have a focus on personalization in their digital service to:

  • Improve the convenience of actions
  • Make it faster and easier to discover products and services
  • Create a dynamic ability to drive targeted promotions and campaigns
  • Inviting the visitor to interact with and purchase additional products or higher value items
  • Experiment with alternative approaches to find the most impactful experience

Improvements in these areas impact key KPIs:

  • Improved conversion rates and online revenues
  • Reduced bounce rates
  • Number of items bought (or interacted with)
  • The average value of items bought (or interacted with)

industry KPIs personalization

In omnichannel businesses, many customer journeys might begin online and lead to in-store purchases – or even the other way around. The correlations and KPIs get slightly harder to measure, but the same basic principles still apply. These lead to increased revenues and profit (assuming pricing, performance, availability, shipping, assortment, etc. are up to par).

The positive experience (that in the first place led to the visitor’s transaction) in the service consequently increases loyalty and word of mouth based brand recognition.

Positive loop of personalization value

The satisfied customers (and even their friends) typically return and create repeat business. This takes the pressure and costs away from customer acquisition through advertising as the lifetime value of customers increases and more businesses are created through referrals.  The positive loop of personalization value is born.

 

The positive loop of personalization value

Also, the inverse is true: when the personalized user experience is not there, conversions go down, the bounce rate increases, the average order value doesn’t grow, and loyalty doesn’t increase – more resources need to be used on customer acquisition and profit margin decreases. We get into the negative spiral of generic experience.

Accomplishing a personalized experience takes effort and focus

Implementing personalized experiences through custom code or spot solutions for e.g. testing or recommendations may lead to a spiraling cost in R&D and service infrastructure, without providing the agility and velocity that the modern marketing teams are looking for.

Frosmo’s versatile personalization software not only solves the challenge of implementing a personalized experience to start the positive loop of personalization value but also makes the experiment – optimize – personalize cycle fast and easy. Constantly delivering the best experience can now be done with speed and agility. This further accelerates the compound effect in the positive loop of business value.

Read more about adding personalization to your Contentful and React websites.

You can also watch this webinar as Frosmo experts explore the fundamentals of personalization, walk you through the key elements of the customer journey and show you how to leverage this strategy in creating a customer-centric experience for your customers.

__________________________________________________________________________________________________ About the writer: Teppo Halonen

Teppo Halonen  has been leading sales teams in services and technology for past 15 years. He started his career in business development as the VP for sales working with different service providers in Europe. With a solid understanding of technology and software, and a strong educational background in computer science, his approach to leadership is based on transparency, teamwork, individual accountability, commitment, and integrity.

 

Recommended for you

The future of customer acquisition for media companies

During the past few years, I’ve sold Frosmo products and services to a whole range of companies. From our national lottery and casino, Veikkaus, to big international retailers like Clas Ohlson. However, as far as ecommerce is concerned, their digital challenges are all pretty similar. The major exception to that is the media industry.

And that’s because media companies face a unique problem; they have to charge money for something that people expect to be free. As a result, these companies have been relying on technical innovations even more than others in a bid to change the business model and stay relevant. It really has become adapt or die.

To be part of that reinvention of an industry by providing the software and solutions has been a great ride so far, but really one that’s only just getting started.

The points I’ll discuss in this article:

  1. Microtransactions
  2. Competing with social media
  3. Editorial content
  4. Natural Language Processing
  5. Targeting vs. testing

Intro to Frosmo and Media

Before I go into the trends that we’re helping media companies with right now, I think it’s good to look back at what we’ve done previously. And at this point, it’s also good to recognize the effort put in by our own developers and project managers to crack a market that was on a losing streak. It’s what has turned our experts into experts and Frosmo into a go-to place for the media.

Some of Finland’s top digital newspapers and streaming services have been improved with Frosmo. They’ve used the Platform to add and improve content recommendations, make layout changes, gamify reading experiences, optimize websites for mobile, add personalized paywalls, and much, much more.

The Frosmo Platform makes it fast and easy for front-end developers to change websites without having to access the back end. This concept enables endless development flexibility. Combine this with data, market trends, and the ideas of your digital team, and together with the Frosmo Platform, you can turn any website into a superior browsing experience, personalized for every occasion.  

 

Implementing future solutions for customer acquisition in media 

Implementing future solutions for customer acquisition in media

And that brings us to the solutions of the future. Web development is a continuous process and so is the quest for additional revenue and customer acquisition. An increasingly hot topic is microtransactions. You may know these from games and now online newspapers and magazines are looking to make use of them, too.

 

1. Microtransactions

For media, microtransactions means that Frosmo sets up a sort of mini paywall for readers to consume just a single article or get unlimited access for a week or two. The setup is a win-win for the consumer and for the newspaper, as the consumer doesn’t have to buy an entire subscription just to read something they’re particularly interested in and at the same time, the person gets used to spending money to consume news.

While it’s too soon to share any figures just yet, I think that microtransactions are here to stay and perhaps even become their own source of revenue.

Using the Frosmo platform, it’s pretty easy to create well-converting mini paywalls by taking into consideration the reader’s preferences. Once these preferences are established by tracking behavior and identifying the categories that the reader is most interested in, relevant articles can be gated off and the existing paywall can be used guide people to the right purchase funnel.

 

2. Bringing the conversation back to the website

Bringing the conversation back to the websiteAnother challenge that media companies are facing is that the conversation has shifted to social media. On one hand, it’s good for these companies that their content gets shared on social media, but it also leads to a decrease in sessions and number of articles read, which in return negatively impacts ad revenue. In general, people who click on an article on Facebook are still in the mindset of “browsing Facebook” rather than “reading the news”. As a result, they read one article and then go back to cat pictures.

In essence, you’re now competing with social media over someone’s time. And to win that battle, it’s important to offer more relevant and more engaging content. You really, really need to get your layout and recommendations right, as you only get one shot to grab the reader’s attention.

Frosmo has a few tricks up its sleeve to help with both the layout and recommendations, which is the next point of discussion and by using machine learning methods such as Natural Language Processing, further discussed at point 4.

 

3. Layout changes, especially editorial

Layout changes, especially editorialOne of the main reasons why people are loyal to certain news sites and magazines is because the tone and standpoints match theirs. Opinion pieces play a huge role in showing an outlet’s identity and they are great conversation starters. The same can be said for thorough investigative pieces. And in both cases, people love sharing them.

However, shorter-than-ever concentration spans rarely go well with long-form articles since there are tons of distractions on a website. Normally, clicks are great because you want users to read and explore, but a lot of resources have gone into these often important topics.

To really get people engrossed in the story, and to make people visually show that people are getting their money’s worth, the article has to look premium. This means blocking out distractions and finding novel ways to add visuals.

While changing page layouts and rearranging content is the majority of the work done with the Frosmo Platform, it’s still not that often used for these one-off occasions. And that’s a missed opportunity that I think will change the coming year as companies are more and more willing to invest in differentiating factors to add value and at the same time people are more willing to pay for quality.

 

4. Improving recommendations through Natural Language Processing

Improving recommendations through Natural Language ProcessingLike pretty much every self-respecting tech company these days, we’re investing heavily in machine learning. We’re all very excited about a model that we’re building that’s using Natural Language Processing or NLP in short.

NLP matches content to content with greater precision for example by analyzing the words in an article and assigning a similarity score. Displaying articles with higher similarity scores then leads to more accurate and higher converting recommendations. These recommendations can then be refined further by excluding already read articles. And better recommendations translate into more clicks and conversions.

One thing that we’re experimenting with is the way we can transparently show the machine learning outcomes. Showing the generated tags alongside each article in the Frosmo Platform would be one way to avoid black box problems. At the same time, we’re looking to make the outcomes manipulable so that anyone in the ecommerce team can make tweaks, rather than just data analysts or scientists.

And this is extremely important because understanding the data and outcomes within the ecommerce team is hugely beneficial for business development. It enables data-driven development and helps teams understand what should be changed or tested in order to reach the intended business goals.

This leads to another topic which I’ll cover in my next blog post: attribution modeling. My experience says that those companies which are doing well have C-level management that cares about the attribution modeling of your AI. The core of business development is to manage your customer journeys and this can go horribly wrong if business goals and usage of data are not talking to each other.

 

5. Separating targeting and testing

The last trend that I want to highlight is more of a workflow or methodology change than a technical or usability improvement. And that is the need to stop developing everything at once. Specifically, to separate targeting from testing, at least in the setup stage.

User journeys are so complex that even the slightest change can have an (adverse) effect on test results. As such, it’s important -perhaps vital?- to figure out your initial targeting criteria and make layout changes accordingly prior to running tests. Think of targeting as a long term effort and testing as an additional short term way to improve targeting results.

A great way to improve results for certain targeted audiences is multi-armed bandit (MAB) optimization, a form of “testing” where an algorithm decides which variation gets shown to whom. While it can be used to find winning variations in a short amount of time or on pages with less traffic, where it really shines is when you let MAB experiments run continuously.

For example, if you have a carousel with news recommendations, MAB could be used to rearrange the order of which article gets shown when based on conversions. Then, when a new article is published, it can automatically replace the worst performing content with this fresh piece. It guarantees the most amount of clicks, indefinitely.

 

Innovation never ends

Innovation never ends

 

Media companies have started figuring out what works, but that comes with its own risks. It seems that most media companies have now found themselves after the initial shock of the digitalization wave has worn off. But there are still many challenges and opportunities like the few seen above.

Staying fresh and relevant through continuous development and innovation is key to the consumers’ hearts. Never forget to innovate, the faster and easier the better. And fast and easy, isn’t this what we all are looking for, regardless of whether we’re developing or consuming?

Let’s chat about your media sites. You can find me on LinkedIn.

________________________________________________________________________________________

About the writer:

Timo Vuori is a sales leader with eight solid years of experience in solution sales and business development in ecommerce and SaaS. He has created dozens of digital solutions for international clients in sectors including retail, travel, online services, banking, gaming, and telecommunications. Working in a groundbreaking industry with cutting edge technology, he keeps himself always up to date on the latest technologies and recent development in AI, voice search functionalities, and the evolution of internet buyer journeys.

Results-focused, Timo’s passion is to create lasting relationships with his customers and find a “win-win” in any situation. He believes that the route to achieving competitive advantage is through an understanding of global markets and industry trends and creating a winning alignment of business strategy and technology.

 

Recommended for you

4 most powerful phenomena in ecommerce marketing that every CMO should start adopting now

The first 3 phenomena personalized customer journeys, AI, and experimentation have been around for a while now. It’s good to see that after years of talking about them, we’re finally starting to see great results from brands that are embracing AI and personalization tools and using them as part of their core business models.  

An interesting new trend that marketers should start looking into is Progressive Web Applications (PWAs), as they bring many advantages to marketers who are looking for better reach and coherent omnichannel customer experience.

It all comes down to the fact that brands have now realized that putting the customer first and embracing their differences by creating personalized customer journeys is the only way to keep up with the competition and grow.

1. Personalized customer journeys

It’s very difficult to create superior customer journeys if you still think of segments as large groups based on demographics, location or some other loose definitions. Every buyer is different and you need to be able to delight every individual. Designing and implementing online customer journeys improves customer satisfaction, lowers customer acquisition costs, and makes customers loyal.

Janne Timmerbacka, ICT director of online grocery store Kauppahalli, sums it up nicely:” The best customer service isn’t based on profiling customer sets any longer. Every single customer is different with their needs and preferences. In an online grocery store, great customer experience is made from knowing the customer so well that you are able to delight the customer by recommending products of their interest”.

To get to that individual level of highly personalized customer journeys, real-time behavioral data of the visitors is needed. What they click, how deep they scroll, what they read, watch, and download will give you a lot of insights on how to direct them to find more relevant info for their individual needs.

2. AI

To go deeper with personalization, AI is needed.  Forbes just concluded a study that   AI-powered marketing campaigns increase customer engagement by 7x and revenue  3x by helping marketers become more targeted, more relevant in their content, and more effective in how they engage with each individual customer.

So with that in mind,  an AI-powered recommendation engine is definitely something that every ecommerce business should invest in this year. Think of it as a great way of serving your customers better, as they can find new interesting products or content to consume. In an article, Netflix said that its AI-powered personalized recommendations save them $1 billion in revenue annually by avoiding canceled subscriptions.

Kristina Lagerroos, Development Manager for the global leading brand in functional kids’ wear Reima, says, “Frosmo enables us to create winning user experiences by providing a recommendations engine that brings value to our customers. They help us to understand our customers’ preferences better and make data-driven decisions”.  

Natural Language Processing (NLP) is also a very interesting phenomenon in that regard. NLP is a subfield of AI that focuses on enabling computers to understand and process human languages or at least get a tiny bit closer to a human-level understanding of language. It ’s cutting edge and a great way to show your visitors more relevant content.

For example, it can be used as the basis for an algorithm that recognizes words in the site content and makes recommendations based on similarities. If a visitor reads an article about a specific topic, the algorithm recognizes the relevant keywords and crawls other articles to find the same keywords. These articles are then recommended to the visitor. This method offers great user experiences also for those first time visitors whom we wouldn’t otherwise be able to serve according to their interests.

3. Experimentation for data-driven decisions

At times, the most challenging part of running an ecommerce business is to get people to work together and agree to website changes. Thus, validating customer journeys through experimentation is the key to gather data and make more insightful data-driven decisions that everybody can agree on.

Multi-armed bandit (MAB) is a powerful AI-powered experimentation tool. With MAB, you test different variations on your website and direct traffic towards those variations that are performing the best. Small changes might turn out to be big revenue generators. That’s the reason why testing is essential and why testing with AI offers a powerful advantage.

Clas Ohlson uses multi-armed bandit to optimize the most promising product recommendations in different markets and in doing so, enabled them to increase their average order value by 8% and the product rows by 27%.

4. Progressive Web Applications

Progressive web applications (PWAs) are web applications that load like regular websites. It allows end users to have a mobile app like experience when visiting the main website, including a home screen and push notifications. From a marketing point of view, one of the biggest advantages is that customers get the same user experience as on the main website without being tied to any app store. These are the reasons we’ll see many ecommerce sites turning into PWAs during this year.

Let’s start creating superior digital experiences with personalized customer journeys!

Request a demo

________________________________________________________________________________________

About the writer:

Tanja Säde is the Chief of Marketing at Frosmo. With 20 years of experience in technology marketing, she is always curious about the latest technologies and marketing trends. She is enthusiastic about creating superior digital customer experiences through data, personalization, and AI. Outside of work, she is a yoga addict.

Recommended for you