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Increasing profits through personalization

Being able to show the monetary gain from every type of investment you make is crucial. To help you understand the benefits of personalization, let’s explore exactly how personalizing your customers’ online shopping experiences increases profits,  here are the main three ways:

1. Get to know your customers

The underlying principle of personalization has to do with how well you understand your customers and your ability to offer them a more unique and intimate experience. One of the simplest personalization tactics that you can employ relatively quickly is using your customer’s first name in any communication you send them. Take this further by gathering and using data on your customers such as their birthdays and locations. With this minimal information, retailers are equipped with the power to come up with creative ways to personalize their customers’ experiences. From a special birthday discount to a clothing suggestion based on their location’s weather report, the opportunities are endless.

2.Personalized offers

Giving your customers personalized offers is one of the most basic—and most popular—personalization tactics. This tactic is effective at increasing profits for a number of reasons. First of all, your customers gain an extra level of enjoyment from their experience on your website when they’re presented with relevant deals that appear to have been designed just for them.

Let’s say, for example, you’re a clothing retailer specializing in children’s clothing. A shopper who has been browsing boys’ size 6-12 months pajamas for a few days but hasn’t yet made a purchase (or, better yet, a shopper who has these items in their shopping cart but hasn’t completed the purchase) will be  more inclined to make a purchase if, next time they visit your site, they’re presented with a pop-up ad offering a limited-time 15% discount off any boys pajama sets.

If we take a look at behavioral economics principles, we can understand another reason why personalized offers work so well. According to behavioral economics, shoppers find bundles of products more valuable than purchasing the same products separately. Incorporate this principle by creating personalized offers that bundle together various items the shopper has been exploring. For example, if you sell cosmetics, rather than offering a shopper purchasing a $15 eye shadow the opportunity to add lipstick for $5, you might offer an eyeshadow + lipstick bundle for $20.

3. Effective communication tactics

As a retailer, how you communicate with your customers—in terms of language, platform, and the times of day you engage—is of crucial importance. Personalizing your customers’ experiences by communicating in ways that work for them will make a valuable impression. If, for example, you notice that a certain group of shoppers visit your site primarily through their mobile devices, you might create an exclusive promotion for mobile only (a coupon code that can only be redeemed via mobile).

Another example of this tactic is using the language your customers use. If you’re in an industry where people use unique slang, connect more with your potential customers by incorporating this language in your website content and emails. Speaking in your customer’s language will make their experience with you more amicable, while increasing their trust in you.

In increasingly competitive markets you will find it of great value to implement personalization techniques. Give it a try and track the ROI of your investment – you will surely notice a huge improvement.

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