Adding personalisation to sites could halve lost sales for SMEs, according to study by 123-reg

Small businesses fail to carry their personalised service online, a study by 123-reg has found.

The research, conducted for the launch of 123-reg’s new website builder, looked at the gap between offering a personalised service both on and offline, revealing the extent to which this can impact sales for large companies and SMEs.

The results found that users trusted bigger, established companies online, but appreciated that smaller businesses were better at offering a more personalised service offline. Quoting YouGov research, the London-based agency found that almost a quarter of the British public (23%) prefer to buy items from big businesses’ websites rather than small businesses’. Notably, this rises to 45% for those aged 18-24.

Digital Blonde commissioned a behavioural scientist to conduct a psychological study, alongside a live experiment. The project revealed a big business’s website performs better in driving purchase intentions and behavioural intentions, despite there being no significant difference in perceived product quality by participants.

The scientist, Patrick Fagan, measured the purchasing and behavioural intent, trust and empathy of web visitors in order to gain a more in-depth understanding of the gap between large and small businesses online. The study confirmed that when it came to online, the situation for small businesses is the exact opposite to larger companies. He found that the public has greater trust and empathy for large companies online, with big businesses performing better on 14 out of 22 website attributes tested. They excel in usability, social functions and information quality - including personalisation.

To contrast the friendly personalised service that small businesses are known for offline with online, Fagan got participants to view one of six variations of an illustrative small business website. Each had different elements and degrees of personalisation, which included user driven personalisation, such as the site welcoming you by name and experiential personalisation which uses meta-data automatically recorded about users. It also included how far away the business was or how many hours left until closing time. Some participants also viewed a version of the small business website which featured no personalisation.

The results showed that introducing personalisation to a site was found to significantly affect people’s trust and empathy with the business, which in turn directly translated into increased purchase and behavioural intent.

Karen Fewell, managing director of Digital Blonde, said that people made decisions based on emotions rather than rationality. “It’s not altogether surprising that factors like trust and empathy significantly increase purchase intent,” she said. “What is incredibly interesting to note is the correlation between degrees of personalisation online and the levels of consumer trust and empathy. Having consumer trust can really impact sales, especially online, where choosing an alternative business to buy from is often just one click away.”

The psychological experiment also showed that when experiential personalisation was added, the proportion of respondents who disagreed with the statement "I would purchase an item at this website” fell from 52% to 29%. This also turned out to be true for return visits to a site; these too could be increased by introducing personalisation.

Applying digital personalisation appears to increase these feelings amongst web visitors, which could in effect close the gap for smaller businesses between their on and offline service. Fagan says that empathy is a uniquely human trait. “Studies have shown that we can actually "feel" in our brains the same experience as another person is seen to go through, thanks to what’s known as mirror neurons,” he says. “Empathy is therefore incredibly powerful for brands and their websites, enabling them to form a relationship that is based on a shared, real, concrete understanding. Creating shared experiences and understanding means brands can form a deeper connection with consumers by touching more of their mental nodes, such as memories. This increased mental availability is a massive driver of brand growth. The more a person's mind is taken up by a brand, the more likely they are to remember it, notice it, spontaneously think about it and ultimately choose to buy from it.”

Kate Cox, CMO at 123-reg who commissioned Digital Blonde to do the study following the YouGov research and to launch its new website builder, spoke about the study’s significance for brands of all sizes. “Personalisation is frequently cited as a key trend for businesses, now we have the evidence of just why it is so crucial,” she said. “It’s clear from this study that personalisation is much more than a marketing trend, it actually has a direct relationship to increased levels of both empathy and trust. These are two essential factors which can translate into sales for businesses of all sizes. We hope the findings from this study, together with the introduction of our website builder will help SMEs, in particular, to embrace digital personalisation and close the gap between on and offline”

Click for the full report ‘Closing the Digital Personalisation Gap’.

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Mairi Clark

Ex-editor of The Drum and various other marketing and advertising titles. Specialise in branding, marketing, advertising and social media. Have worked in digital since 1993.

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