Personalization has become a buzzword in the marketing/advertising industry, but especially in digital marketing – and for good reasons. Personalized marketing can mean many different things, depending on your goals. It truly has limi tless possibilities - from website design to in - store experience, from how a brand makes customers feel to the types of communications and recommendations customers receive.
It is integral that marketers understand its importance to the overall customer ex perience and journey to truly compete in today's market. These days customers have come to expect personalization and adding a [First Name] to an email campaign is no longer enough.
Merriam - Webster defines personalize as “to p ersonify, to make personal or individual.” To apply this concept, marketers use data and past behavior to customize every touchpoint of the customer journey for individuals by using marketing automation and data tools. When we look at it on a grand scale, personalization has endless possibilities across channels, such as email, SMS, chatbots, websites, push notifications, in - app messaging, branding, in - store interactions, etc. Businesses have tons of opportunities “to personify” and make an impact on revenu e and retention.
“Personalization depends on strategy that is tied to both business and customer goals.” - Gartner
When creating a personalization strategy, companies need not focus solely on business goals, but also include c ustomer goals. Without considering customer goals, brands could completely miss out on what customers really want, resulting in lost revenue and missed audience reach or an unengaged customer base. Inversely, if brands only focus on what the customer wants , they could be missing out on the company’s bottom line.
For personalization efforts to be successful, brands must meet both the business goals and customer expectations.
Customers know that brands have access to their data, a nd they expect marketers to use it to create tailored experiences across brand touchpoints. To meet customer expectations, brands must prove they know the customer. Marketers are expected to use customer data to show relevant information to each customer. Customer data can be broken down into four main categories:
Includes biographical and personal information. Data points can include name, birthdate, address, and phone number.
Demonstrates how customers interact with you on different channels. Data points can include clicks through rates on your website, email, or app, interactions on social accounts, or why they reached out to customer service.
Provides the customer’s purchase history with your brand. Data points can include purchases, returns, transaction timing, and frequency of purchases.
Informs on how customers feel about your brand. Data points can include customer satisfaction, if custom ers want your products or how they feel about the offerings, and how easy your products are to use.
As an important reminder, when collecting data make sure to remain compliant with all data security laws such as but not limited to CAN - SPAM, California Consumer Privacy Act (CCPA), and the General Data Protection Regulation (GDPR).
To exceed customer expectations, brands need to use data to help customers. Some ways brands can show they are helping customers include simplifying the purchase process, provi ding reassurance on products and business practices, educating customers, rewarding loyal customers, and more.
Personalization can have a huge impact on businesses. Due to its impact on lead quality, engagement, and bo ttom line, personalization is no longer optional for brands – it's required. By using personalization, brands can:
Move from fragmented, non - cohesive customer experiences to seamless customer journeys from in - store to on line.
When prospects have a more tailored interaction with a competitor, you may lose out on new leads. By utilizing personalization, you can use different campaigns to gather new data points on your prospects and then use that data to figure out the best way to help them convert.
The cost of acquiring a new customer can sometimes be very high and over the last few years, it has risen nearly 60%. By utilizing personalization, companies can potentially lower the cost of new customer acquisition by 50%!
When customers feel like you are speaking directly to them, they want to engage more with your brand. Increased engagement = increased revenue.
Keep your campaigns relevant and show customers how your brand can help them. Whether that’s through explaining how your tool works or how to use their reward points, customers want you to help them.
The more ene rgy brands spend on getting to know their prospects and customers and tailoring those journeys, the greater the impact on the business bottom line. Personalization has been shown to increase revenue between 5 - 25%, and companies who prioritize personalizati on have seen increases in revenue up to 40%.
And if this list of metric improvements didn’t convince you that personalization is important, look at these numbers.
Brands that are not using personalization or are doing it poorly led to 41% of customers swit ching companies, resulting in combined lost revenue of $756 billion.
Now that we know personalization can have a huge impact on both customers and businesses, why aren’t all brands using it? It comes down to these main challenges:
Data is key to personalization efforts; without it brands cannot segment audiences, place prospects or customers into the correct journeys, or add in the correct dynamic content components, significantly hindering personalization efforts.
Personalization depends on access to data points across the customer journey. If data is bad, outdated, or data systems are not integrated, marketers will not have the whole view of the customer, limiting personalization capabilities.
Siloed or old systems hurt a brand’s ability to utilize personalization and adding new technology is expensive. Not to mention the time it takes to imp lement, train employees, and influence adoption.
When creating personalized marketing campaigns, marketers often use personas to help guide their content to different types of customers. For instance, instead of creat ing one set of copy for an email, marketers could now be writing many different copy versions depending on the audience for the same email campaign.
And of course, like many optimization tactics, it comes down to time and resource allocation. Adding new technology can be expensive and getting the right employees in place and trained to make it successful takes up time and resources some companies would rather spend elsewhere.
Now that we have determined what marketing personalization means, and its benefits and challenges, how can you help your brand be successful?
Start by answering these questions:
Businesses, and especially marketers, can no longer afford to ignore personalization or to only implement it haphazardly without repercussions. The customer experience, retention, an d bottom line can all be made or broken by the success or lack of personalization efforts in the customer journey.