Marketing Personalization Explained
What Is Marketing Personalization?
Marketing personalization is a strategy that focuses on delivering personalized marketing content to individual consumers by using data, digital technology and automation. It’s also known as one-to-one marketing or personalized marketing.
Common examples of marketing personalization include:
- Individualized emails based on a customer’s account history
In email marketing, personalization often takes the form of product recommendations, targeted informational content, onboarding messages and special offers. When customers create an online account with a brand, they provide personal information such as age, gender and location. Brands also track metrics like account creation, how often customers log in, and shopping cart activity. With this data, marketers use automation to deliver highly targeted email messages tailored to each customer’s needs.
- Personalized advertising based on purchases or web activity
Automated, targeted ads that follow users from website to website are among the best recognized types of marketing personalization. Websites use tiny text files called cookies to track users’ movement across the web, and build profiles of individual browser habits. To better understand customer behaviors and interests, brands also gather purchase and search data. The result is that when a customer makes a purchase online, or browses for a car or a pair of shoes, they’re likely to see ads for those or related products as they continue moving about the web.
- Specific offers tailored to a customer’s preferences and interests
Personalized offers like a coupon for your favorite product or a special offer for a complimentary item create value for both brands and consumers. Consumers expect the brands they do business with to know them and understand what they are looking for, and a growing majority of consumers recognize the value of sharing their preferences with those brands. Marketers capture this information through a variety of mechanisms, including favorited items, loyalty programs, mobile wallet, wish lists, preference centers, and purchase history, and use automation to push out tailored content that meets or predicts customer needs.
- Event-triggered messages
When a customer takes an action such as checking in for a flight or abandoning an item in a digital shopping cart, they are increasingly likely to receive messages related to that specific activity via SMS, push, email and other digital channels. Event-triggered messages generate a significantly higher response than mass-marketing campaigns, making this an important strategy for leading brands. Marketers use automation and customer journey builder tools to set specific events as triggers for automated messages that are timely and relevant to an individual customer’s specific context. Other common examples of event triggers for personalized marketing messages include a first purchase, shipping confirmations, transaction notifications or changes to an order.
How Does Marketing Personalization Differ from Traditional Marketing?
Traditional mass marketing focuses on casting a wide net for reaching customers through media such as print, broadcast, direct mail, phone, and outdoor advertising. Marketing personalization is targeted to the individual and offers a higher level of engagement between brands and consumers. This approach focuses primarily on digital media, and relies on digital technologies to collect and analyze data, and deliver messages through mediums including email, websites, social media, mobile apps or SMS.
What are the Benefits of Marketing Personalization?
Marketing personalization provides a variety of benefits for both consumers and brands. It creates significant value and convenience for consumers, while helping brands grow revenue, customer loyalty and brand advocacy. In fact, for many consumers, personalized marketing is no longer just a nice to have. It’s an expectation. This trend is reflected in the following marketing personalization statistics.
- 91% of consumers say they are more likely to shop with brands that provide offers and recommendations that are relevant to them. – Accenture
- 80% of consumers are more likely to make a purchase from a brand that provides personalized experiences. – Epsilon
- 90% of U.S. consumers find marketing personalization very or somewhat appealing. – Statista
Key benefits of marketing personalization include:
- Improved Customer Experience (CX)
Today’s empowered consumers expect to be treated as individuals, making good personalization essential to delivering great customer experience (CX). Brands that can meet customers wherever they are and deliver timely, individualized, contextual content tend to see the best CX ratings. Research has shown that a positive experience with a brand is more influential than great advertising.
- Increased Brand Loyalty
Loyal customers are the best customers, and consumers tend to be more loyal to brands that understand them and what they are looking for. Delivering personalized messages based on customer behaviors and preferences significantly improves your chances of cementing brand loyalty and converting customers into brand advocates.
- Enhanced Customer Engagement
Consumers are exposed to thousands of marketing messages every day. In this cluttered and competitive environment, brands are much more likely to earn a response when they personalize those messages, whether that’s through email, a mobile app, a website or another channel.
- Increased Conversions & ROI
Customers are significantly more likely to purchase products or services from organizations that provide personalized experiences. Brands that effectively personalize their messages consistently see improved results and ROI, including reduced acquisition costs and increased customer spending.
How Does Marketing Personalization Work?
The digital and mobile revolution have paved the way for today’s increasingly sophisticated approaches to marketing personalization. These strategies are also made possible by a number of technological advances in data collection, data analysis, automation and artificial intelligence (AI).
Modern marketing technologies (martech) enable brands to pair traditional demographic data, such as age, gender and location, with behavioral data from websites, digital advertising, social media platforms and mobile applications. By combining this data, marketers can gain a more complete understanding of individual customers and their needs, preferences and behaviors.
Using powerful tools like Customer Relationship Management (CRM) and Data Management platforms, brands then analyze and organize this data at a massive scale and create individual profiles for customers and prospects. Based on these individualized customer insights and profiles, marketers leverage martech, automation and AI to deliver highly tailored messages and experiences to customers and prospects. These advances also allow marketers to assess effectiveness of messages in real-time in order to iterate and optimize these strategies for continual performance improvement.
What Trends Drive Marketing Personalization?
The ongoing growth in marketing personalization is driven by a number of key trends.
- Growth in Digital & Mobile Technology
The digital and mobile revolution has provided an unprecedented opportunity for marketers to achieve the gold standard of true, personalized engagement. Today’s consumers conduct a significant portion of their business online and on their mobile devices. As a result, brands can now take advantage of the full context surrounding a consumer — what they’ve purchased, what they like online, and how they behave when they visit your website — to engage via their mobile device in a way that feels more personal.
- Changing Consumer Expectations
Consumer expectations are on the rise. Personalizing content with a subscriber name is no longer sufficient. What consumers want now is content that is real-time, relevant and tailored specifically towards their individual needs. That kind of personalization requires next level customer intelligence, and tools that allow brands to use those insights to create marketing content that provides significant value for the customer.
- Geotargeting & Proximity Marketing
Emerging geotargeting and proximity marketing technologies empower brands to send personalized, contextual messages to customers based on their geographic location at any given moment. This type of location-based marketing provides the ability to personalize content based on the context of the individual user, for example, by triggering notification when a customer enters or walks by a brick and mortar store. This approach helps marketers bridge the physical and digital context to provide actionable content at the exact moment when it can be used.
- Artificial Intelligence (AI) & Automation
Advances in AI and automation allow marketers to use AI platforms to analyze large volumes of data and predict customer behaviors and other patterns at an unprecedented scale. Current and emerging AI-powered tools can also automate the timing, communication channels, and message content. This powerful combination allows marketers to create and rapidly iterate on highly customized and personalized experiences.
Want to learn more about how Marketing Personalization can deliver results at each stage of the customer lifecycle? Contact us today!