At RevLifter, we are very excited about our new, integrated relationship with Partnerize. Now it’s easier than ever for Partnerize clients to begin working with us.
As part of this new collaboration, Partnerize asked our team to provide some rationale on why personalization technology is an important element in the future of affiliate, and why personalized deals and incentives are something you and your team should make a priority.
We all know that the partnership industry is growing rapidly as companies gain a stronger understanding of its value as a growth driver. From its roots in the traditional affiliate space, the category has expanded in all directions to include many new types of partners, influencers, and data-driven technologies.
Tech advances are so important here because, historically, affiliate has been a low-tech space. While the rest of the digital industry grew more sophisticated and customer-centric, affiliate lagged. That dearth of data and technology made affiliate and partnership marketing ham-fisted. Until quite recently, every shopper we reached saw the same message and offers as everyone else.
Thankfully, platforms like Partnerize have been able to supply more and richer data on the customer and their journey. By delivering that rich insight to advertisers and partners in real time, they have created a huge opportunity to change the game for the better.
At RevLifter, we believe that the best way to utilize rich, data-driven customer insight in partnership marketing is by hyper-personalizing content and offers to reflect the needs and preferences of each user. Here are seven reasons why at least some level of personalization should be at the top of your priorities list, with actionable takeaways on how to get the best results.
1. Personalization drives faster sales and profit growth
Dozens of studies show that personalized information, offers, and experiences increase conversion rates, AOV, acquisition and more. One of the most popular is from McKinsey, which projected the five-year impact of personalization on the B2C economy to be worth at least $1.7 trillion.
McKinsey also reports that personalized experiences yield 20% higher customer satisfaction rates and 10-15% higher CVRs. They also confirmed that personalization creates competitive advantage because only a specific brand can build personalized experiences using its first-party data.
2. Performance-based data and tools to personalize are now available
Affiliate and partnerships are remarkably popular channels in which to test and implement new technologies. Fortunately, some personalization providers have recognized the needs of partnership leaders and adapted their business models to ‘work’ for people like you. Look out for the following conditions when searching for your ideal personalization provider:
- Paid on performance, based on verified transactions
- No complex integration
- Pre-installed in affiliate container tags (e.g. the Partnerize Tag)
- No set-up or tenancy fees
- No UI/UX changes required
- Managed service and creative services included
- Proven in your category and/or adjacent categories
Actionable takeaway: You don’t need to change your business model to work with personalization technologies. There are great alternatives that can be introduced using your partnership tech provider or network.
3. You can now personalize based on performance goals and metrics – i.e. the things that matter
The first time I heard about personalization, the examples came in the form of adjusting ‘brand elements’ to better fit the lifestyle and life stage of the user. Parents got to see family images, singles saw situations reflective of their lives, etc..
These approaches drove improvements in brand metrics and modest gains across sales and transactions. Nevertheless, many performance marketers gave personalization second priority because the key tactics that drive transactions were not the focus for those early efforts.
More recently, the focus has moved to the specific growth-driving tools and tactics that actually produce incremental sales and profit. In retail, deals and incentives are our most effective tools for creating uplift. Technology now exists to personalize these offers to the user’s preferences, past shopping patterns, and stage in the buyer journey.
Consider the following example of how personalized deals can boost conversions and meet other goals:
We are seeing big gains in CVR and AOV when blanket promotions are replaced with bespoke offers, tailored to each individual. Across a sample of 100+ retailers globally, RevLifter data shows an average 30% increase in CVR and a 20% increase in AOV when our hyper-personalized offers are delivered instead of costly blanket promotions.
Actionable takeaway: In partnership, the performance of your program is critical. By ensuring that your personalization technology customizes the most important merchandising tools, including promotions and offers, you can unlock its potential across sales and profit.
4. In 2021, personalization really means 1-2-1 communications
Almost since the dawn of the internet, companies have been talking about the power to deliver personalized experiences. But when you look under the hood, you find that what many providers actually offer is just segmentation; individuals are assigned to a behavior ‘bucket’ (like “deal-prone repeat customers”) and are delivered a set of messages based on that segment.
That’s better than not doing anything, but it’s not personalization. Fortunately, new solutions are available to analyze all customer signals and deliver a precise, 1-2-1 communication to each shopper. This higher degree of customization drives far better sales and profit for retailers. Further, such technologies are empowered by data that businesses like yours already collect.
ACTIONABLE TAKEAWAY: When done right, personalization can have tremendous impact on sales, margin, and profit. But studies also show that when the ‘personalized experience’ doesn’t actually fit the customer, the experience drives immediate abandonment. For this reason, it’s important to strive for precision. True 1-2-1 personalization is superior to techniques that use the term personalization but really mean segmenting users into broad buckets.
5. Personalization reduces costs and improves retail margins
“Are these promotions subsidizing our own users?” Every partnership leader has been asked this question at one time or another. People who don’t entirely understand the partnerships space often look at our promotions and think we’re simply helping customers lower costs rather than boosting acquisition or margins.
The reality is more complicated than that. However, we do know that some customers take advantage of high-value blanket promotions (e.g. “25% off store-wide”). In fact, millions of people every day get to the checkout page, see the offer code box, and spawn a new window in order to find discount codes on coupon and voucher sites.
That’s very bad for us marketers because:
- We lose control of the journey.
- The shopper is exposed to offers from competitors.
- The shopper is more likely to abandon a cart due to distractions or separation from the on-site experience.
- The shopper may find invalid or fraudulent offers, which create disappointment and abandonment when they return to check out.
The offers also have to be large to compete with everyone else’s for attention. When we’re forced to use blanket promotions, we end up giving away a great deal of profit because our deals have to be juicy enough to compel the most price-sensitive customers. As for those other shoppers who might not need such a large deal to convert, they get the big discount anyway.
Fortunately, personalization enables us to replace blanket promotions with bespoke offers, precisely calibrated to each user. Instead of delivering our “25% off store-wide” promotion, a more bespoke deal can be shaped to match the customer’s interests. This helps to encourage things like upselling and cross-selling opportunities, while the brand can now deliver discounts of varying sizes and conditions based on the proclivities of the individual user.
All of the offers can be governed by business rules set to ensure that every transaction meets the company’s revenue, profit, and other goals. The idea is that consumers are only shown offers that work for the business.
Actionable takeaway: Think about personalized deals and offers as a way of reducing promotional waste. By defining appropriate business targets and rules, you can improve ROI and increase transactions. More sales and profit at lower cost – that’s a very compelling combination.
6. Affiliate and partnership personalization can co-exist with other eCommerce technologies on your site (yes, even other personalization offerings)
No eCommerce technology should require exclusivity from a client. Every retailer should have the freedom of deploying a mix of technologies to optimize sales and profit for its unique circumstances.
Fortunately, affiliate solution providers have always developed their tech to work alongside other platforms on a single website. You can deploy affiliate personalization to a stream of customers, a set of web pages, and specific use cases like cart abandonment, while continuing to leverage additional technologies in other circumstances. A great thing about the technology in our sector is that it is completely focused on results.
Actionable takeaway: Partner with the broader marketing department to determine the places that affiliate and partnership personalization can deliver the best incremental performance.
7. Personalized deals perform well in all popular partnership and affiliate categories
As we mentioned earlier, we see an average increase of 30% in CVR and a 20% boost in AOV when companies replace blanket, one-size-fits-all promotions with 1-2-1 deals. As an example of the breadth of verticals that personalization applies to, here are some of the top performers on the RevLifter platform:
- Accessories and jewelry
- Cosmetics, fragrances and beauty
- Computer hardware
- CPG and FMCG
- Home goods
Actionable takeaway: Personalized deals and offers are particularly effective in many of the most popular affiliate categories. If your business operates in any of the industries above, strong performance for personalized deals and incentives is even more likely.
Retailers are becoming increasingly dependent on partnership and affiliate to deliver aggressive growth. I’d wager that your targets and goals are accelerating faster than those for other teams in your organization. With this as a backdrop, you need every tool and technology you can find to deliver the results you need. Personalization and personalized incentives are a proven and efficient way of achieving strong incremental sales and profit within the channel.
If you are interested in learning more about hyper-personalized deals and incentives, talk to your Partnerize CS or AM counterpart about solutions that may be right for you. You can then visit our site, request a demo, or send your questions to firstname.lastname@example.org.