Personalized Marketing is a marketing strategy that is based on the customization of content for each individual customer and/or consumer.
What is Personalized Marketing?
Not to be confused with database marketing, personalized marketing is a marketing strategy that customizes marketing content to existing and potential customers in order to enhance their individual experience with a brand. This is done through analysis of their prior and current behavior while interacting with the brand. This type of marketing strategy encourages loyalty, since customers are much more likely to continue to interact with a brand that caters to their individual needs and desires. Personalization of content can also consider customer attributes and demographic information, such as age, gender, geographic location, socioeconomic status, languages spoken and political affiliations. Advantages of personalized marketing include improved customer experience, increased brand recognition, higher customer loyalty and the resulting increase in customer retention and revenue.
What is the difference between personalized marketing and customized marketing?
Some marketers use the terms personalized marketing and customized marketing interchangeably. Personalized marketing refers to the desire to create a 1-to-1 experience for customers by customizing marketing touchpoints based on assumptions about or knowledge of specific customers. Customized marketing refers to the creation of customized products for specific customers based on their unique needs and desires.
Although the terms are similar, the more widely used term is personalized marketing, since customized marketing is relevant for luxury or high value industries while personalized marketing is relevant to all industries.
Personalized marketing trends
Over the years, and with the advancement of technology, personalized marketing has evolved. In general terms, personalized marketing trends can be separated into three categories: online website personalization, digital marketing personalization and offline marketing personalization.
Recent online website personalization trends focus on leveraging visitor recognition technologies, such as cookies or reverse IP lookups, in order to change the content of a site to cater to a specific individual or persona. For example, showing only female products on an eCommerce site, to a visitor who is identified as a woman. Trends in digital marketing personalization take this one step further by personalizing off platform properties such as banner ads, emails and digital communications, for specific individuals. For example, showing items that have been left by a customer in an online cart as part of the imagery of a retargeting Facebook ad. Finally, recent personalized marketing trends in offline marketing focus on creative variations for specific audiences or personas. For example, placing a company’s name in billboards outside their corporate offices or sending product catalogs that are dynamically created based on each customer’s purchase history.
As seen in the above examples, different levels of personalization exist, with the highest one being hyper personalization.
Hyper personalization in marketing
Hyper personalization in marketing refers to the ability to personalize experiences and content for each individual person. Although marketers can decide to personalize their assets at the segment, persona, or individual level, hyper personalization refers to this last one.
In order to achieve hyper personalization in marketing, it is paramount that a brand has a vast amount of demographic, behavioral and transactional customer data as well as the ability to identify customer behaviors in realtime. By combining these, marketers can alter the content that a customer interacts with to provide an individualized experience.
For example, marketers can send replenishment emails to customers based on their consumption patterns and items they usually buy anticipating customers’ next purchase. As a result, each customer would receive different content on different days and times. Marketers can then personalize their website in realtime, when customers arrive, so that customers the products included in the email first. Similarly, in physical stores, clienteling personnel can point customers to the location of their preferred products as soon as they check in or swipe their loyalty card. Finally, hyper personalization algorithms can recommend products that enhance the value of the items the customer usually buys or products that are usually bought together with those the customer is interested in.
By combining customer data and realtime interactions, marketers can achieve the individualized experiences that come with hyper personalization.
Personalized marketing examples
Marketing personalization covers the complete scope of marketing channels. Although most marketers will focus their personalization efforts in digital channels such as a websites or email marketing, more advanced marketers will extend it to include offline channels as well. The below are some personalized marketing examples for different channels:
- Website or eCommerce personalization – the changing of digital interfaces based on the knowledge the company has on a website. Some start by replacing the imagery upon arrival based on reverse IP resolution or known customer data (e.g., displaying winter weather to customers in cold weather). Other examples include changing images based on session behavior (e.g., displaying primarily tropical destinations after a visitor clicks into a vacation package for the Caribbean) or displaying product recommendations in product and checkout pages based on what other customers commonly purchase together with selected items.
- Call center personalization – the tailoring of calls, offers and messages done by a clienteling representative to customers based on customers’ history with the brand. Personalized marketing examples for call centers include providing lists of customers who recently purchased an item as a follow-up call or information on customers who purchased a product in the past (e.g., customers who bought jewelry for their anniversary one year ago) when that date is approaching to gauge interest in a new product.
- In-store personalization – the customization of offers and experiences taking place within a brand’s physical retail store. Examples of offer personalization include tailoring the coupons being provided by a kiosk or POC machine based on each customer’s loyalty card. Examples for experience personalization include providing the store’s clienteling team access to customer history for a more personalized purchasing experience, either by preparing items ahead of time, or easily being able to know customer preferences and dimensions.
- Digital channel marketing personalization – Using dynamic content within communications that is populated based on the data collected on each customer to provide a customized feel to each customer receiving such communication. Digital channel marketing personalization includes personalization of SMS, push notifications and emails.
Personalized email marketing
Email marketing was traditionally built as a batch and blast system where every customer received the same content and creative. Over time, marketers took more a more personalized approach to email marketing, first by using segments and personas to tailor their content and then by including personalized content within the email itself.
The first wave of personalized email marketing focused on the use of merge tags to update text and images based on customer attributes. For example, placing the receivers first name as part of the body text or subject line instead of a generic word. Similarly, marketers began to personalize emails by including product recommendations and reminders based off of transactional and behavioral data.
More advanced personalized email marketing tactics use dynamic content to populate emails with the most up-to-date content based on the time of open. In these cases, the content not only takes into account the person receiving the email but also the time and place they open the email. Examples of this type of personalization include having content update to show the time remaining in a countdown for a special offer, the betting odds or results of a sports game, or even a navigation map to the closest store location based on the individual’s location data at the time of open.
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