Make it Rein this Holiday with a Scalable Approach to Personalization

By Ben Malki, Director of Customer Success, Dynamic Yield

In an era where personalization has become an absolute necessity, as brands queue up for the holiday, many are likely building dozens of micro-segments to capture the needs and preferences of various audiences that will inevitably seek out their products this busy shopping season.

Commonly associated with 1:1 personalization, this approach, long considered the holy grail of marketing, requires a lot of time, effort, and resources to execute. But with such a small window to capitalize on the influx of new and returning visitors, is it really the optimal strategy brands should be adopting?

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Counterintuitive as it may seem, the secret to guaranteed and scalable results this holiday season is rooted in macro-segmentation, where marketers can cover the majority of their traffic by identifying and tailoring experiences to a handful of key audiences.

Better yet, doing so will even set brands up for a more prosperous 2022.

A Personalization Pivot from 1:1 to 1:Many

When properly executed, 1:1 personalization involves numerous test deployments with conclusive results. These results then need to be analyzed, with every test variation measured against each audience to determine the optimal programmatic targeting rules for an experience. Additionally, no matter how mathematic an individual’s brain, there will always be a limit to how many of these micro-segments can be managed before becoming too complicated.

This work is best left to the machines – using algorithms to collect all user behavior and signals for showcasing the best-performing variation, products, or categories. Not only best for short-lived events such as the holidays, where optimization on the fly will maximize revenue throughout the duration of the campaign, but marketers can also free themselves of tedious data analysis tasks so they may think more creatively about how to connect with core customers.

Because in a buyer’s market, steeped in discounts and bargains that make it hard to compete and capture conversions, the way to differentiate is by truly understanding what really matters to those you value most. And the easiest way to get there isn’t through ‘boiling the ocean’, but instead, implementing an audience strategy based on a single segmentation principle. In turn, this will allow brands to more effectively identify and cater to the unique behavioral characteristics of different groups, getting them closer to 1:1 personalization in the long run.

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A scalable macro-segmentation framework for personalization

After working with hundreds of brands to help them bring personalization to life in a functional, repeatable, scalable manner, I developed a homegrown segmentation framework called Root Audiences. The main goal of Root Audiences is to focus personalization efforts on a finite number of segments according to essential attributes, such as intent, loyalty, lifetime value, RFM (recency, frequency, monetary value), customer type, and so forth. Once defined, these 3-4 Root Audiences should cover 100% of the site’s traffic, used for every experience launched (holiday campaigns or otherwise). This ensures total journey orchestration, no visitor is left unaccounted for, and that maximum business impact and optimization is achieved.

Using this framework, teams will be able to develop a clearer understanding of what each audience represents, continuously learning from their behavior while also institutionalizing insights that bring brands closer to their customers. And through a deeper knowledge of customer wants and needs, generate a more accurate strategy, improve eCommerce KPIs, and achieve incrementality at scale.

Shaking up your approach to customer-centricity these holidays

The great thing about macro-segmentation is that it’s simple to implement, meaning that even though the holidays may be imminent, it’s not too late to pivot to a Root Audience-based approach. In fact, those who go this route are likelier to yield greater success, not only in the run-up to the holiday season but also year-round – provided they take their learnings and apply them to deliver more customer-centric experiences in the new year.

Macro-segmentation and Root Audiences is the gift that keeps on giving, positioning brands to meet the needs and expectations of their customers. So trade in your archaic notion of 1:1 personalization by relinquishing the heavy lifting to machine learning and getting to know who your most important audiences are for the long haul.

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