How personalized marketing impacts customer conversions

The driving force behind personalized marketing: One message doesn’t fit all

With 76% of consumers expecting retailers to understand their unique needs,² generic marketing may lead to missed opportunities and customer churn.

In response, more businesses are focusing on developing tailored marketing and experiences. Recognizing the benefits of a more personalized approach — higher engagement rates, reduced purchase friction, and greater loyalty — 69% of businesses participating in one study have increased their investments in personalization despite overall economic uncertainty.³

While an obvious starting point is often product recommendations, the scope of personalization extends far beyond this initial touchpoint.

In one survey, U.S. consumers revealed diverse priorities when shopping online: 64% ranked product catalog as the most important feature, followed by fulfillment and shipping; security; customer/shopping experience; and sales, promotions, loyalty, and rewards.⁴ Personalization can be strategically integrated across all these elements, ensuring that every aspect of the customer journey — from product selection to delivery — is an individualized experience.

How personalized marketing fuels customer journeys and can boost bottom lines

On average, large enterprises in the U.S. have a 6.1% website conversion rate.⁵ Yet research reveals that 70% of companies that implement advanced personalization strategies may see a 200% or more increase in ROI.²

Here are some ways personalized marketing can help boost a business’s bottom line:

• Conversion funnel optimization. Insights from past purchases, preferred payment methods, and transaction amounts allow businesses to refine product recommendations and pricing strategies, which may boost conversion rates. That said, personalization doesn’t just reduce abandoned carts — In one study, 80% of business leaders surveyed reported an average of a 38% increase in consumer spending when the consumer experience is personalized.³

• Fosters emotional engagement. Beyond closing sales, personalized experiences can cultivate deeper emotional connections throughout the customer journey funnel.²

• Optimizes customer profiling. By utilizing customer data analytics (including demographics, purchase history, and behavior) to create distinct customer profiles, businesses can better align content and offers across the customer experience journey.

• Predict future behaviors. By leveraging behavior analytics, for example, businesses can anticipate whether a shopper will abandon their carts and proactively offer incentives like discounts or free shipping to encourage purchase completion.

Leverage shopper insights to optimize the customer experience

To optimize the customer experience using shopper insights, consider these strategies:

• Reduce checkout friction. Implement seamless checkout processes that align with customers' preferred payment methods. Streamlining the customer buying experience may make it less likely that they’ll abandon their carts.

• Tailor communication strategies. In one survey, 58% of U.S. consumers stated that detailed product information (such as materials, ingredients, and size comparisons) was important when it comes to creating the ideal product research and buying experience.⁶ Messaging should include relevant product information and reflect preferred payment options, such as buy now, pay later. Explore these dynamic messaging best practices.

• Offer personalized product recommendations. Analyze past purchases and browsing history to suggest relevant products.

• Explore omnichannel orchestration. Ensure a consistent and personalized brand experience across all channels, including email, website, social media, and mobile apps.

• Use real-time targeting. Trigger personalized offers and recommendations with immediate purchase behavior. For example, if a shopper views a specific type of product, upsell or cross-sell by showcasing similar items or providing a special offer on related accessories.

• Leverage AI and machine learning. In one survey, 92% of businesses were found to be using AI-driven personalization.³ Deploy AI tools to personalize content in real-time, predict customer needs and preferences, and automate content delivery.

How PayPal’s shopper insights can help drive results

PayPal's vast consumer network and deep data intelligence offer a unique advantage for businesses seeking to optimize their online retail strategies.

With PayPal, you can uncover shopper insights from buying behavior — such as types of products purchased or preferred payment method — to tailor the shopping experience across search engines and individual websites. You also benefit from payment trust and security and robust integrations. The result? The potential for more successful conversions and greater revenue.

Create customized shopping experiences that help drive results

As customer expectations for digital experiences evolve, the key to staying ahead lies in personalized marketing.

By embracing a data-driven culture powered by the right technologies, businesses can rise above their competitors and unlock more conversions rooted in personalized experiences. Learn more about the economic impact of PayPal.