What is Personalized Marketing?

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This post was authored by Corbin Murakami and originally appeared here on Liferay.com

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Personalization is and has always been effective. Dale Carnegie once said “a person’s name is to that person the sweetest and most important sound in any language.” In a sense, he was making a case for adding a personal touch on our products and services. Personalization works because on some base human level, everyone looks for that personal attention.

Thanks to technology, personalization is more accessible than ever before. Now, any organization can implement personalization from digital printing to variable data and direct mailers. There’s the ability to produce thousands of mailers addressed to unique individuals with their first names on each one of them. That type of experience is available on the web at any digital touchpoint, which means organizations have the ability to provide unique customer experiences that weren’t previously possible.

What is Personalized Marketing?

To apply a specific analogy, personalized marketing is like a shopping experience at Nordstrom. When a shopper is looking for a specific pair of shoes, she’s usually approached by a sales rep who will try to assist her in getting the exact pair. She can talk with the rep, tell him what she prefers in terms of style and color, and have a real interaction. Information is exchanged in the context of getting to know someone, and both parties would benefit: the shopper receives a product she wants while Nordstrom wins new business.

In the same manner, personalized marketing is the ability to create content that specifically caters to each individual consumer. It involves an understanding of who your audience is, having captured certain pieces of information about them and leveraging that data to provide each visitor a unique user experience. Often times, web personalization will necessitate using automation and integrated channels to help with the process.

What Does Personalization Promise?

The appeal of personalized marketing is three-fold:

  • Increase conversions – Websites that employ web personalization tend to see a bump in conversions (whether that’s a basic form submission or an actual closed deal / purchase). Higher conversion rates are often tied to the fact that offers take into consideration factors such as age, gender, job role and buyer stage.
  • Lift sales figures – Companies that excel in personalized marketing tend to spend less time focusing on the quantity of leads, and more time on targeting the right leads at the right times. This would invariably lead to an increase in sales.
  • Keep more customers (retention) – Arguably as important as winning new customers and conversions, personalized marketing allows brands to keep their current customers happy and loyal. Devoting attention to a customer’s preferences builds up familiarity and comfort, which in turn translates into customer satisfaction.

The State of Personalization

Even though many companies acknowledge the necessity of personalized marketing, not many of them are pulling it off successfully. Seventy-seven percent of marketers believe that real-time personalization is crucial to their success, but only 29% of marketers are actually delivering dynamic content on their websites.

The Personalization Gap

There seems to be a gap between what they’re doing and what they want to be doing. “It is quite clear that personalization is seen as mission critical to the success of online business, but too many organizations have yet to implement a well thought-out and tested approach,” said Linus Gregoriadis, Research Director at Econsultancy.

There are various reasons for this disparity. One major reason is the roadblocks encountered when it comes to adopting new technology. According to a report by Monetate, almost half of all companies surveyed report IT roadblocks and legacy technology as major barriers to web personalization. Moreover, many organizations lack the proper resources to run tests and leverage data into personalized experiences. While many departments are making a push for advanced marketing, there is clear indication that some companies (in particular, big enterprises) rather settle than shift their entire marketing strategy.

A Web Personalization Maturity Model

Web Personalization Maturity Model

When it comes to creating content for customers, every company deals with personalization to a varying degree. Some companies might have advanced orchestration in place, while most tend to be implementing certain rules-based methods. In short, there are generally five types of personalized marketing:

  • One-to-all: Campaigns are static with no personalization. The content is created on a broad level and pushed out to everyone uniformly. There is no segmentation or optimization.
  • One-to-many: Rules-based campaigns in which rules are developed and then applied to personalization. Mostly batch campaigns with various levels of A/B testing. Rules determine the next interaction.
  • One-to-some: Models are developed for how to think about segments and audience, then used to personalize content to users. Some channels are starting to integrate personalized messaging. 
  • One-to-few: Multiple channels are integrated and moving towards a single view of customer. There is some level of continuity between online and offline messaging. Interactive marketing elements go hand-in-hand with automated segmentation.
  • One-to-one: No longer based on just models, but technology like machine learning and algorithms to make precise personalization. Communications are specifically defined by interest, interactions and auto-decisions which are delivered at the right time.

For most companies, the hardest challenge tends to be migrating from one-to-some to one-to-few. This involves moving from single offers and campaign flows to technical solutions that can handle true interactive marketing. It also means having to ensure alignment across the entire company, which could often mean a reformation of legacy systems, processes and/or staff.

As a whole, the market seems to be moving towards one-to-one personalization. This would include a knowledge of the visitor as defined by their preferences and interactions on the site. On a broader scale, it means adapting the overall customer experience to become more technologically enhanced and data-driven.

However, organizations shouldn’t feel pressured to implement one-to-one immediately. Teams may not always have the proper resources or channels in place to effectively carry out some of these advanced marketing tactics. In fact, a bad personalization experience is much worse than having no personalization. Instead, the goal should be trying to incrementally improve personalization deliverability and eventually moving up the maturity model. (In other words, progress.)

Final Thoughts

All enterprises should know that personalization is an imperative. It’s no longer good enough to send or blast messages to entire groups of people. Regardless of personalization stage, every organization should make it a point to move towards more interactive channels of marketing. The more people feel comfortable and familiar with a brand, the more they will give their loyalty and respect.

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