Why do I spend money on Netflix? In short, why personalization works

Why do I spend money on Netflix? In short, why personalization works

The world around us changes faster than we do. Although technology enables us to go through life from a distance and more anonymously, we nevertheless like to hold on to personal experience. Soccer stadiums are crammed, despite Fox Sports. Music festivals are not suffering from Spotify. In times of expansion, (digital) specialist stores open new doors daily.

Grocery store

There will remain a market for grocery stores around the corner, just like there will always be niche players next to Amazon and Bol.com. Consumers are attached to recognition, appreciation and personal service, online as well. As an online retailer, you can anticipate by deploying personalization techniques.

In this blog post, we will discuss personalization in further detail and show effective examples, as well as provide useful hints to get started yourself. Of course we will also answer the question why Netflix’ affairs are so exceptionally well organized.

Preconditions

In order to serve each unique person in a relevant manner, the preconditions for the average site visitor should be properly defined. Otherwise he or she will still give up, without having achieved his/her aim, or, even worse, will click towards competitors and purchase there.

Good online visibility is required, as there will be no sales without traffic. In addition, navigation should be logical and the design intuitive, considering the essential goals of visitors. A distinctive product portfolio and pricing obviously help. Once visitors have found what they were looking for, checking out should never be the bottleneck.

A website that is optimally arranged for the average visitor creates an excellent basis for good performance.

Sustainability

Now that building relevant and sustainable customer relationships has become increasingly important, personalization will really take online business a step further.

Personalization can be described as “delivering the right message to the right person at the right time, by means of the knowledge gathered about person in question and the interaction taking place.”

The use of personalization really is not solely confined to the largest e-commerce players with nearly infinite marketing budgets. Nowadays there are attractively priced solutions that quickly yield results, but we will get back to that later. First, we will take a look at two divergent but extremely effective examples.

Netflix

Media companies are wrestling with their revenue model. Year after year, publishers see a decrease in print sales and record and film production companies are battling illegal downloads. Everything seems available free of charge on the Internet, if one only knows where to look.

netflix-pocket-version

Especially in an era of free content, Netflix conquers the market. It is incredibly clever how they manage to charge customers 10 Euro a month, whereas public broadcasting stations are free and films and series can be downloaded through torrent sites. What is their secret?

Netflix focuses on the first person (i.e. me) in everything that they do. Not only do e-mail messages contain my name in the salutation, they also contain information that I find valuable, for example, announcements of new series that interest me.

When I watch films or series at my convenience, I see suggestions for others, especially selected for me. If I were to pause a series in the meantime, I can continue watching it later on my iPad.

Netflix is the guy from the video shop that knew exactly which film I wanted to see, even before passing the store’s threshold, but now in digital form. As a result, “he” is always on stand-by to help me and provide the right advice. Meanwhile, it turns out that there are many first persons on the world with a Netflix subscription.

The DJ Company

Netflix is the ultimate example of cross-device and multi-channel personalization. Closer to home however, there are some attractive business cases as well. Well, closer to home… Anyway, let us head to Groningen.

It is the place of business of The DJ Company. The company acts as a booking agency for DJs that perform at parties and celebrations throughout the Netherlands. An innovative concept. The DJ Company had its affairs neatly in order, online as well: A website with a pleasant appearance, easy booking module and many testimonials of satisfied customers.

Yet the number of bookings fell short on what one would reasonably expect from website traffic. And guess what? Visitors noticed a phone number with the area code for Groningen (050) on the website. That scared them. It rose the expectation that The DJ Company only operated at a local level, or that DJs would have to spend hours on the road, on their way to remote gigs in Middelburg, Eindhoven or Doetinchem.

The solution turned out to be both simple and effective: The DJ Company installed personalization software that, among others, recognizes a visitor’s place of origin and immediately adapts website content to match a given profile. Local phone numbers were purchased for each region. For example, visitors hailing from Limburg will see the Maastricht area code on the website, and people from Drenthe a phone number in Assen, the provincial capital.

Phone calls still come in through Groningen, but customers have the feeling that they are dealing with a local agency, also because all correspondence (phone, e-mail messages and administration) refers to the local number. In a short period, this form of personalization turned out to be extremely successful.

Lessons

Meanwhile, personalization is used by a wide variety of online companies. Although size and business type may differ, they nevertheless all follow the same vision that really focuses on the customer. How can you get started with personalization yourself? What exactly are the lessons learned that should be taken to heart to quickly get results?

1. Select the right solution

An increasing number of personalization tools appear on the market. It is vital, that the solution you choose matches your investment in time, money and intended goals. If you want to send personalized e-mail messages, it would be great if online clicking behavior can be connected to your e-mail marketing package. In addition, the software should obviously work within your current IT infrastructure.

2. Using available knowledge and information

Before being able to advise customers, you should first know your business thoroughly. A lot of information is already available. For example, Google Analytics provides information on visitor behavior, essential customer segments and interest in specific products or services at an aggregated level. Customers also express their opinions through reviews on your website or social media. Moreover, do not forget common sense: How would you like to be approached yourself?

3. Select a number of quick wins

Based on available information from Analytics sources and your own experience, you can describe a number of business cases that quickly yield results. For The DJ Company, it was showing a local phone number. However, there are innumerable examples. Do not feel limited in your creativity, nowadays software is capable of pulling it off technically.

4. Start big and carefully

Avoid diving into details too soon, in the beginning you should focus on essential customer groups. Results can already be significant with a broad segmentation, especially when combined with the quick wins mentioned in lesson 3. In addition, even small changes in your website may have considerable effects. So refrain from making things too complex for now, this can be done later.

5. Continue to monitor and optimize

Most tools have a dashboard showing personalization results. If something works, it could become a default part of your website, after which you configure new personalizations to further optimize it. For that is a lesson too: In order to continue operating truly customer-focused, you have to keep listening and anticipating.

Conclusion

Human beings are social animals, who still make decisions based on personal contact and emotion. Because online stores keep improving their definitions of preconditions, personalization has become the way to distinguish oneself from competitors and to build sustainable customer relationships.

Companies like Amazon, Bol.com and Netflix operate focusing on customers, which is why they remain successful. Granted, they are multinationals with huge marketing teams and budgets; however, there are appropriate solutions for all online stores that will quickly get results.

A low-threshold start is essential, i.e. a limited amount of customer groups and relatively minor changes to your website. The results will show you whether and to what extent personalizations need further refinement.

About the author

jaap van baar

Jaap van Baar is a member of the WiQhit team. WiQhit makes personalization of websites based on individual behavior simple, effective and affordable – starting from € 0 a month. Within the team, Jaap primarily focuses on acquisition, marketing, blogging, partnerships, product development and project management.

Linkedin: https://www.linkedin.com/in/jaapvanbaar

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