Personalization will become the most important driver for marketing success within the next 4 years. Find out what personalization means, how to use it correctly and how to stay ahead with your business here.
Do you remember the exciting moment when you were addressed with your first and last name in newsletters for the first time? Today, just a few years later, personalization requires a far more strategic approach. It’s imperative to stay competitive in crowded and complicated markets.
Personalized marketing and first-party data are gaining a lot of traction. 90% of marketers today state outright that personalization is essential for business profitability. In addition, the global market for personalization software is expected to grow from $6.7 million in 2020 to $1.8 billion by the end of 2025.
Customers today want brands that understand them, listen to them and respond to specific requests. They want to be able to identify with their favorite brands, want to trust them and count on them. This gives brands the opportunity to tailor key messages, offers and customer experiences to specific profiles.
What is personalization?
Personalization is a marketing approach that provides customer-relevant information. This information is individually geared to the customer’s interests, needs and usage behavior. Based on historical behavior, the preferences of each individual user are determined. This results in personalized content or product recommendations that interest the customer and meet their respective needs.
If we take a more in-depth look at personalization, three aspects emerge that are particularly important:
- Communication channel
The product or content is the object that should meet the customer’s individual needs. This can be a product to be sold, but also blog posts, images or news.
Timing is the second important aspect. Companies should target their customers at the best possible time. It is clear that this is not possible with website visits. However, all other marketing measures should be strongly aligned with this.
The third aspect is the choice of the right communication channel. Companies need to think about which channels they want to use to target content to their customers. The use of collected data shows you when the right content should be played out on the correct channel.
The basics of personalization in marketing
The starting point for a strong personalization strategy is the collection of a wide variety of data. This includes website interactions, product information, store visits and buying behavior, as well as demographic and temporal data.
Based on this data, the further process is decided in a second step. This in turn depends heavily on your business model and varies from company to company. This results in the selection of the right recommendation service or algorithm, which reads your data and plays out your content in a personalized way.
Besides the collection and analysis of your data, the automation and integration into your communication channels plays an extremely important role. Think in advance about whether you want to personalize your content via email, webshop, app, etc.
The topic and the technical requirements can seem daunting for many. It doesn’t have to be! Start with a simple use case (for example, a quiz) and try to collect the first important data and insights into the user behavior of your customers. In a next step, you can go further and scale your company’s personalized communication.
Use cases of personalization
The application areas of personalized advertising are huge. Whether on the web, on mobile devices, emails, apps or digital ordering systems – you have the opportunity to address your users individually everywhere. This wide range of possibilities means that marketers often don’t know where personalization even makes sense. Therefore, you need to learn where personalization can be useful and where not.
The following concrete examples should show you where the use of personalized marketing can be worthwhile:
Personalized advertising: The targeted playout of specific advertising measures conveys a feeling of appreciation to the customer and reduces wastage.
E-mail marketing: E-mails personalized to the user with relevant content or product offers increase the chances of high click-through rates.
Personalized app content: Displaying personalized content increases interaction and makes it much easier for the user to use the app.
Relevant product recommendations in e-commerce: Product recommendations that are relevant to the user ensure a positive shopping experience, increase customer activity, and help the customer in the decision-making process.
Personalization in call centers: Recommendation systems in call centers help the agent to pick up on customer-relevant topics, thus scoring points with sympathy and foresight.
Product recommendations at the point of sale: Personalization can also be implemented at the point of sale. Starbucks, for example, achieved a huge marketing win with its customized coffee mugs.
The advantages of personalized marketing
Personalization offers a wide range of benefits for companies and customers alike. Try to internalize the following points and implement as many of them as possible in a targeted and high-quality manner.
Personalization provides better customer experiences: Dynamic, interactive content and personalized product recommendations build trust, give your brand an authentic image, and keep customers more active. This increases customer loyalty.
Personalization increases conversion rates: Your sales are likely to skyrocket if you manage to send the right message to the right person at the right time.
Personalization reduces shopping cart abandonment: Real-time dynamic pop-ups, browser retargeting, e-mail remarketing or similar strategies can reduce shopping cart abandonment and increase customer experience.
Personalization addresses loyal customers: Once you offer your shoppers an outstanding, personalized experience, they feel valued and their loyalty to the brand increases and strengthens.
Personalization strengthens against competition: Good personalization creates strong customer loyalty to your brand. This makes it more difficult for competitors to poach those customers.
Personalization makes switching difficult for customers: We have all become accustomed to platforms that know us. Say Spotify, Netflix or Zalando. If we were to change providers, the new company would need some time to create an approximately good experience.
Gamification as the cornerstone of personalization
Gamification can be used to effectively solicit marketing endorsements, gather customer input and preferences, and strengthen the brand-customer relationship. Gamified interactions offer consumers a welcome break from the daily grind and data overload, and are more human than traditional data collection. In addition to demographic data collection, you can also capture customer preferences and expectations in a playful way and address them in a second step.
Gamification does not only help to collect data. Games and surveys are also more popular with users if they can be personalized. Personalized addresses of players, preset parameters, targeted to the respondent or similar examples offer your customers essential user benefits.
Conclusion on personalization in marketing
You must know in advance what goals you want to achieve with the collected data. Try to play out your marketing Targeting your marketing to each individual customer offers a lot of potential. The collection of data, as well as the targeted playout of customer-specific offers is of the highest priority. Content or purchase recommendations can thus be tailored to the user.
Take advantage of this digital marketing trend in 2022 and let your collected data work for you. If you have any questions, we will be happy to help you.