How is Personalization Changing the Face of Marketing?
When a 60-year-old woman and a 14-year-old girl walk into a typical retail store, both of them see the same products on display there. So does everyone else.
For buying what they want to buy, the customers have to walk around the retail store, see products differentiated by generic product categories (if even that!) and depend upon the courtesy of the store’s employees for any recommendations.
Until a few years ago, the scenario used to be some on the Internet. Businesses would send the same email to everyone on their mailing list, the homepages on their websites would look the same to every user.
Their messaging needed to be generic in order to target a wide audience, regardless of the audience’s relevance to the business.
Fortunately, this condition has changed for the better and is evolving every day with more and more people becoming aware of the benefits offered by a personalized marketing approach.
What is personalized marketing?
To put it simply, personalized marketing refers to a marketing approach that uses customer data to provide them an individualized experience with a brand or business.
In practical terms, such an approach aims to convey a message to the right people, at the right time, through the right platform.
To understand it better, consider the retail store example in contrast with an e-commerce shopping site like Amazon.
Each customer visiting amazon.com experiences a homepage customized to his personal preference.
Amazon uses powerful algorithms to personalize the homepages and tailor product recommendations based on the search and purchase records of customers.
So, the 60-year-old woman and the 14-year-old girl from our example would see the products which they may actually be interested in and the recommendations they are made would be based on their previous shopping experience.
As a marketer or a business owner if you find yourself how does personalization help you with actual business growth, here is an interesting statistic: according to a survey by SmarterHQ, 44% of customers buy products on Amazon from their ‘frequently bought together’ and ‘customers who bought this item also bought’ prompts.
How does Amazon generate these prompts? By using the huge amount of user data to implement personalization.
Let’s look at some of the major ways in which personalized marketing can help your business:
1) Targeting specific audience meaningfully
The availability of sophisticated data analysis tools and technology today has made it possible to identify your target audience up to a hitherto unimaginable level of granularity.
For instance, based on the analytics reports from different marketing channels you can know the different age-groups in which your most active customers lie and you can also understand the tone of messaging which engages them the most.
For example, after acquiring the analytics firm Zodiac, Nike adopted an approach of targeting customers with personalized content for mobile devices.
The customers were hooked to the brand image with country-specific adverts tailored for younger audiences known to spend more time on contemporary marketing channels like Instagram, Snapchat and YouTube.
This flowing narrative connected the brand to its customers by talking to them in the way they talk, and essentially, by capturing the essence of personalization.
2) Creating better content
A personalized marketing campaign sets apart your brand identity among your competitors. A good example of this is Coca-Cola’s Share A Coke campaign which printed common names on their bottles as a simple means to attract youngsters.
It might not seem like a very insightful idea at face value, but if you found a soft-drink bottle with your name on it, wouldn’t you rather buy it than another generic soft drink bottle placed next to it?
In any case, the campaign ended up garnering the first sales growth that the company had seen in 10 years.
The scope and potential for personalized content are of course much better in the digital landscape.
The Coca-Cola campaign, being limited by the constraints of practicality, could only target the most common names, but it is extremely common these days for digital campaigns to address each customer with their own name.
In addition, however, there are now a number of other possibilities like location-based marketing, time-based marketing, user-personas development, available using which you can personalize your marketing efforts.
Industry leaders like Epsilon use cutting-edge technology to make the customers’ experience as customized as possible according to their individual personality.
3) Building deeper relationships with customers
The benefits of personalization in marketing go much reach much farther than ensuring conversions: personalization gives a much-needed boost to customer retention and customer loyalty.
This is one of the reasons why improving their personalization capabilities is the top priority for 92% of Indian marketers surveyed for a Forrester Consulting study commissioned by Epsilon.
The customers surveyed also admitted a definite preference for brands that can provide a personalized experience to them.
Even with a small budget and not a lot of experience with personalized marketing, you can still resort to little empathetic gestures that will go a long way towards making your customers feel connected with you.
Sending customers a thank you mail addressed to their name after they have done business with you, wishing them on their birthday, or even sending an occasional reminder of their journey with your brand are a few common examples of such gestures.
By investing proper resources you can always take things further by improving your entire website or app user experience along with dynamic landing pages.
4) Utilizing the power of recommendations
As discussed above, Amazon uses the advantage of personalized product recommendations to drive a large portion of its business. Another great example of the same is the media-streaming giant, Netflix.
In addition to showing its subscribers film and TV recommendations based on the content they have watched already, it goes as far as personalizing film covers to give prominence to the actors a user is familiar with.
These efforts by Netflix are fed by the vast amount of information it harvests from over 300 million member profiles: information about everything from the titles you add to your watchlist to the titles you stopped watching halfway and the moments you hit pause or play.
The personalization game of Netflix is strong enough to ensure that no two users are ever shown exactly the same homepage.
The vast amount of resources invested by these brands towards personalized marketing is because of a simple fact: it yields high returns and at the same time, it improves the customer experience by increasing the ease of shopping or finding good content to watch.
Brands in other business domains also make ample use of personalized recommendations, for example, Udemy and Coursera, who recommend study topics to their subscribers based on their history on these sites.
Depending upon the nature of your business and the goals that you ultimately want to achieve through your marketing, you can plan your own personalized marketing strategy.
However, as business owners and marketers across different industries are becoming increasingly aware about the benefits of personalization, you must also begin to seriously consider it in order to stay ahead of the curve and not be left behind your competitors.