Using and exploiting customers data by the webshops to know they want
Web shops have all sorts of advantages over physical stores, one of which is their own knowledge of their customers. It amazes me why so many e-commerce companies don’t make use of this opportunity.
Customers leave a large digital trail. They find their way to your site after clicking a banner or doing a Google search; they read articles in your newsletter; they’re looking for products in your web shop; they read other customers’ reviews and, finally, they make a purchase. All of this information can be linked to a person. You can map that person’s entire customer journey and get a pretty good idea of their interests. Wow! Just try doing the same in a physical store.
Still, web shops generally don’t do a whole lot with this information. Most web shops have a newsletter, but they do not always do a segmentation according to target groups. They simply send the same newsletter to their entire database, even though they should know that some of the messages are completely irrelevant for part of their target group. A childless couple has little use for an offer for a child-friendly hotel. Chances are they will turn tail and never come back, rather than converting. Small wonder that most web shops find their newsletters aren’t getting read as much, and that their conversion rates are dropping. All the while, web shops actually have all the information they need to turn the necessary dials for increasing conversion rates.
A friend of mine is an amateur cyclist. He’s exceptionally enthusiastic about a German web shop specializing in all things related to bicycle racing. Every once in a while he will forward the newsletter to me, because I occasionally hop on a racing bike myself. I’m not too comfortable with German, but to be honest: the articles are damn good and convenient. They provide actual advice, rather than just sales pitches.
At first, my friend was triggered by the prices of the parts: a case, a chain, a set of wheels. But little by little he started buying much more. And I get it. The web shop predicts when he is about to run out of sports nutrition, and makes him an offer at exactly the right time. When he tweeted about a fall that broke his helmet, they offered him a 20% discount on a new, even safer helmet.
He has nothing but praise for the newsletter. They tailor their customer advice based on the type of bicycle the customer has. My friend has a bicycle frame that is suited for electronic gear-shifting. “But I’m not going to buy something like that. It’s very expensive and I don’t think it will suddenly allow me to win a sprint,” he said when he bought the bike. Ha ha! Not a year has passed, and guess what he recently bought? Exactly, an electronic gear-shift system. In the end he was triggered by stories of enthusiastic users in the newsletter. And when that holiday allowance came in, he immediately invested that money into his bicycle.
Because he is accumulating digital points, occasionally he even buys parts for fellow cycling buddies, who are just a tad less fanatic about their equipment. The web shop was quick to realize it – no one goes through three bicycle chains in one year, after all – and made him the following offer: if you introduce these people as customers or subscribers to the newsletter, we will give you a discount on your next purchase.
“Why don’t you just buy from a Dutch store?” I asked him the other day. He never mentioned the prices. He was going on about the reliability of the store, and even more so about the information they provided him with. I don’t know of any Dutch web shops for cyclists who have mastered the game to the same extent as these Germans. But after this blog, that should be changing soon enough.