We’ve estimated that upwards of 80% of all digital shoppers on a given website are unidentified. If someone is not identified, it’s impossible to optimize the site experience or activate personalized marketing.
Defined as the percentage of website shoppers who can be “identified” by an attribute tied back to a unified profile, identification rate allows retailers to optimize the entire site experience and activate personalized marketing across channels for up to 50% more shoppers. Identification also presents foresight, allowing retailers to curate the steps along the shopping journey from visitor to shopper to loyalist.
Because performance marketing, ecommerce, and CRM teams often have different success metrics, executives don’t always realize how low their identification rate actually is. Identification rate is the missing “parent” metric that can tie these groups together and drive higher performance to create a shared understanding of how critical identification is.
Identification can also help unify teams around critical sales lift as the holiday season approaches, and retailers find themselves navigating a challenging retail market landscape. During Black Friday and Cyber Monday (BFCM), retailers have traditionally focused on acquisition with the intent that more shoppers equals more revenue. However, the math doesn’t always add up. According to Black Friday stats, the overwhelming majority of these shoppers do not convert and those who do convert are largely LTV negative.
This year, retailers are prioritizing retention to protect cost of acquisition to boost spend efficiency. Identification rate is a critical unifying metric for marketing, and should be a focus for CEOs, CMOs, CDOs, and CFOs. When executives prioritize identification, they are able to dramatically increase the number of visitors they identify and reach, and, in turn, deliver targeted strategies for the holiday season and beyond.
Retailers like Lulu and Georgia, Brilliant Earth, and DXL prioritize increasing identification rate in their marketing strategy. That makes them more effective at moving customers through the purchase funnel and moving a larger share of their product catalogs.
On the road to your most successful holiday season, we’ll discuss the impact of identification and it’s influence on converting high-value customers, ultimately increasing the LTV and ROAS in the most competitive season of the year.
Identification’s importance: Influencing the key initiatives that executives care about most
With shoppers dedicating less than 3% of their day to the market, capturing their attention in that small window has become increasingly challenging, as today’s touchpoints are costly real estate, particularly amid other direct competition.
Identification rate elements include a shopper’s email address, cell phone number, login name or other attribute that ties back to a unified profile that can be used for optimization and personalization.
Beyond identification rate, identification is the foundation of all customer experience. By analyzing your total traffic or anonymous visitors and matching them with existing data profiles, you can optimize personalization efforts and customer lifecycle.
Most systems face a “cold start” issue, restricting personalization until the second engagement or session with your brand. That makes them miss out on converting non-buyers and first-time buyers, who constitute 80% of a retailer’s audience. Only a handful of tech organizations have a complete identification solution, despite its impact.
Identification ties directly to the three factors that matter most to executives over the holiday:
- Beating daily comps. Budget efficiency is critical when dealing with an influx of holiday traffic from new visitors while nurturing customers who have shopped with you before. Beyond YoY comps, beating daily comps requires a well-vetted identification strategy in order to heighten the efficiency of your acquisition cost, to ensure you’re spending dollars with the right customer segments appropriately.
- Delivering preferred experiences. Thirty seven percent of shoppers last BFCM were first-time buyers. A proper identification strategy provides an opportunity to capture customer signals – preferences and behaviors – that can be used within campaigns to influence the first purchase and repeat purchases. But, a large selection of holiday traffic includes past buyers who are not logged in. Leverage identification to deliver experiences that reflect their relationship with you.
- Loyalty, and high value action. Thirty-one percent of shoppers were fifth+ time buyers last BFCM, meaning there are shoppers going back to brands they’ve experienced before and trust. The most strategic retail leaders have a handful of customer actions they define as indicators of loyalty like purchase frequency or buying higher AOV products – these generally increase lifetime value. Identification gives you the opportunity to anticipate which customers will most likely take these actions so you can target them accordingly.
Funnel metrics to watch
In retail marketing, our primary objective is to influence both the quantity and quality of customers. While it’s common for brands to prioritize the quantity aspect by focusing on customer acquisition, it is equally crucial to consider the quality of our shoppers. That can be defined by their spending habits, purchase frequency, and longevity as customers.
We’ve introduced the concept of “Customer Movement” to ecommerce, powering a retailer’s ability to recognize the most efficient nurturing path to seamlessly guide new subscribers to active loyalists.
The root of customer movement is identification, which is influenced by four key funnel metrics:
- More reach of identified site visitors. Just because you have traffic doesn’t mean you have identification. In fact, most retailers are only identifying logged in shoppers. The source of the traffic is the source of traffic is a crucial part of starting to understand your shoppers, An identification strategy gives you insight into anonymous traffic, using shopper signals to deliver better customer experiences.
- More engagement. When you identify a shopper, you’re starting to build up a profile of their actions. Most systems can only identify specific actions, like a click on a product page, but shoppers act out their preferences through so much more. Identification increases the accuracy and relevancy of your trigger programs through this individual customer understanding.
- Improving purchase frequency. First purchase and repeat purchases increase when you have better reach and engagement, proving a virtuous cycle. Identification leads to more relevant campaigns because you can understand a shoppers’ price, brand, and category affinity to anticipate their likeliness to buy.
- AOV. Identification can help determine if someone is willing to spend full price, or likely to add another item to their cart, while delivering the best messaging to make it happen. Cross-category buying and product discovery both lead to higher average in order value, which is a result of identification transparency.
Customer movement: Identification’s impact on retention and revenue
The right identification strategy not only identifies more of your site traffic, but helps you capture the valuable signals that visitors display to help create more relevant offers and messaging.
Identification turns you on to the actions and indicators created by your site visitors. Across every point of your funnel, distinguishing between non-buyers who aren’t in your CRM yet and current customers, you could significantly improve acquisition and retention. Next, if you could understand the individual actions of each visitor, you could use that information to tailor offers, messages and experiences to each one.
Also known as “signal”, identification connects all of the actions of a customer together, so that you can use those insights to move your customers through a funnel effectively. With the right signals, your team can identify gaps and opportunities to drive more customer engagement by:
- Responding to shopper signals quickly
- Providing the right offers to get to the highest possible purchase price
- Changing the cadence of messaging to fit preferences
Driving first-time buyers can be expensive. Ironically enough, the biggest opportunity of the calendar year, BFCM, is when we’re flooded with fickle buyers. But, as retailers acquire new customers it’s important to understand that the path to loyalty is an intentional one.
The ideal state for a marketing organization is to understand what your best customers look like. Identification empowers retail marketers to create high-value customer relationships.
Seasonality Increases the Need for Identification
This is crunch time, but not time to fall back on bad habits.
Bluecore’s executive ID cheat sheet: Get started with identification before the holiday crunch
Rather than falling back on too many emails or mass discounting this season, get your teams excited for smarter messaging based on identification.
Step One: Rally the troops around identification
Alignment and monitoring of the identification rate across digital properties is essential for successful customer identification. Each team involved – such as CRM, site, email marketing, retail marketing, and website management – must be on the same page regarding this metric. This unified effort lays the foundation for effective personalization and targeting strategies.
Step Two: Time to analyze your tech stack
Identifying more people requires some technical capabilities that most midsized and large retailers likely already have in place. But, identification is not to be conflated with the capabilities of your current tech stack.
Just because you have a CDP or an ESP or a campaign management tool, doesn’t mean you have identification. You need to evaluate which systems give you visibility into your ID rate and gives you access to be able to connect those identities to shopper and product behaviors to use across campaigns and channels. In this way, you may need tech that sits in between these systems to allow you to activate that data fluidly to create relevant customer experiences.
To get value from identification, you need:
- The ability to collect visitor behavior data across the website
- The ability to capture identity from every website page that has email capture
- A built-out lead capture strategy with the ability for ongoing A/B Testing and optimization
- A built-out email strategy with behavior, merchandise, lifecycle and broadcast campaigns.
- Multiple campaigns for different audiences or products or a desire to personalize messaging to individuals
- Amplified personalization from companion ESPs
These building blocks represent the beginning, middle and end of a good identification strategy. At the beginning, you need to be able to collect signal data – that is, information about visitors that will help identify them and understand their behavior better.
Next, you need a fully documented strategy behind their email capabilities, personalized offers, and an understanding of their product catalog.
Lastly, you need the marketing technology in place to deliver those personalized campaigns based on their identification data and the ability to analyze the results to better inform the initial strategy.
Step Three: Start listening
Successful identification of shoppers involves not only gathering data, but also ensuring comprehensive coverage to capture every valuable signal. You must determine which signals are most relevant to your business for triggers, personalization, and enhancing customer experiences. Collecting data from various sources, connecting it with customer information, and maintaining comprehensive site coverage are vital to uncovering these nuances and optimizing identification strategies across your entire online shopping experience.
Step Four: Putting identification into action
Identification is an integral component of the broader marketing machine. It serves as a valuable guide that influences numerous decisions including messaging, cadence, product recommendations, discounts, and channel preferences. To fully leverage identification, you must establish a system of continuous testing and learning to enhance its effectiveness over time.
Your campaigns should capitalize on your identification rate by nurturing customer experiences that offer conversion opportunities while also enabling you to gain deeper insights and collect more signals. For instance, employing site pop-up modals with various offer options or sending new arrivals emails with personalized category recommendations can facilitate shopper discovery.
These activations leverage the rich signal obtained through the identification process, ensuring the capture of every conversion opportunity with behavior, merchandise, lifecycle, and broadcast-based campaigns, each playing a distinct role in guiding shoppers’ path to purchase.
Identification sets the stage for effective customer movement. It steers your personalization and the customer loyalty, ensuring your BFCM shoppers come back in February.