Personalized Holidays

Greetings from Munich! I’m keynoting the World Congress on Mass Customization and Personalization. In two weeks, I’ll tell you what’s new and hip in personalization. I’m particularly interested in what’s going on internationally, so the conference should prove very interesting.

Which reminds me — I haven’t written any columns specifically about personalization in a while. With Oktoberfest all around me and with everyone back home gearing up for the Q4 holidays, let’s look at a different kind of holiday: the personalized holiday. Moreover, we’ll look at personalized holidays combined with personalized offers.

Holiday marketing is nothing new. I recently saw a Toys ‘R’ Us TV spot. The company’s celebrating its mascot’s birthday with storewide savings. Personalized holidays are different. They’re holidays surrounding a circumstance particular to your individual customer.

Amazon.com has promoted personalized holidays for a few years now. They offer discounts on your “anniversary,” the first time you bought something on Amazon. Other companies offer birthday discounts (so that’s why they ask for my birth date at registration :-)). These companies have taken a first step into personalized holidays, but much more can be done.

Combining personalized holidays with personalized offers is the next logical step. Successful online companies mine their user database and execute retention campaigns and re-activation campaigns. These are based on the user’s purchase history. It should a no-brainer to combine these personalized offer campaigns with personalized holiday campaigns.

In a combined offer, you conduct a database select on dormant users with a birthday or buying anniversary this month. You could either wish them a happy birthday (which has more meaning to users than their buying anniversary), then tell them about products and services relevant to their previous purchases. Consider offering these users an incentive to return (though I’ll discuss the disadvantages of this in a future column).

For medium-value customers, send a birthday card along with a thank-you for their patronage. This personalized offer should show combinations of products they’d be interested in (based on past purchases). It should be geared toward increasing purchase size. Bundles, free shipping on three or more items, or any promotion geared at increasing share-of-wallet are perfect for this segment. If you have personalization technology in-house, you can recommend things loosely connected to what they already like, or services that complement what they already use (e.g. loans or mortgages). The effort is geared toward moving these people into the high-value group.

It’s OK to say thanks to high-value customers with a bigger loyalty reward. They spend more money more often with your company. Incentives are a nice thank-you. This investment pays dividends much more quickly than a large investment on a low-value customer will. Offer these folks a dollar-based discount on purchases within the month, free shipping, or another monetary thank-you. Combine the offer with personalized recommendations, events, news, or whatever’s interesting to them (I don’t know what your business is).

And thank them for being such great customers. Because they’re your most valuable customers, they’re the group that might provide good word-of-mouth marketing. If you have the ability to conduct a viral marketing campaign, tell these people they can share their holiday with their friends. Ask them to provide their friends’ email addresses. You can email these friends on behalf of the high-value customer and run an acquisition campaign. A high-value group is better for viral campaigns than mid-or low-value groups for obvious reasons. Why would a low-value group say something great about you when they don’t use you too much themselves? They’re less inclined to spread the good word than high-value groups.

Always time for a holiday

Don’t wait until Q4 to kick holiday promotions into gear. Using personalized holidays (I’m sure you can think of more than just birthdays), you can have a constant stream of people receiving special promotions based on their own relationship with you. Customize the offer based on several criteria, including value segment, interest group, etc. That enables you to perform regular retention and re-activation campaigns in a new, holiday-attired guise. By segmenting type of offers you make to different types of people, you also maximize return by not spending too much money on people with a low likelihood of showing that return.

On the flip side, you’ll spend more (like rewards for high-value customers) where it’s most likely to generate the best good will, and higher, faster returns.

Agree? Disagree? Let me know!

Until next time. . .

jack

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