Posted by Personalization is no longer a “nice to have” offering or a competitive differentiator. It is, in fact, a customer-led demand that has become a force in itself. Personalization is necessary for businesses to stay relevant in the current competitive landscape. And those who have hopped aboard this trend are already yielding significant results.
Take Coca-Cola’s “Share a Coke” campaign or Netflix or Spotify- these are some exemplary use cases demonstrating personalization’s power.
Against this backdrop, one may wonder — where do such personalized campaigns originate? What feeds them? How can marketers harness the same? Read on to know the answer to such pressing questions.
Why should you care about personalization anyway?
Before we dive into how one can introduce personalization into their engagement strategy, let’s first understand the value of personalization. Apart from the fact that 66% of customers expect companies to understand their needs and preferences, which makes it an unspoken customer expectation, well-executed personalization can derive the following results:
- Brand Affinity: 91% of consumers prefer transacting with a brand that offers personalized (and relevant) product recommendations, offers, etc.
- Greater Customer Engagement: 72% of customers only engage with marketing messages that are personalized to their tastes.
- Higher Conversion Rates: Personalization uplifts sales conversions by 10 to 15%, ensuring better customer-business alignment.
- Elevated Customer Satisfaction: Personalization attracts over 20% higher customer satisfaction rates.
- Fosters Customer Loyalty: 56% of buyers are more likely to return to a website that is personalized and/or makes personalized recommendations.
- Increased Revenue: Personalization increases revenue by 5 to 15%.
- Excellent ROI: For every $1 spent on personalization, businesses make $20 — that’s an ROI of 200%!
All in all, personalization is seen as an incredibly valuable addition to a brand’s strategy — so much so that customers are willing to share additional data to avail it — including the data privacy-conscious millennials!
Could customer insights fuel personalization?
Despite all the furor surrounding personalization, only 22% of consumers are satisfied with the level of personalization they receive. Such a gap indicates that businesses are probably looking in all the wrong places to achieve personalization.
So, what would be an excellent place to start?
With the customers, of course!
Businesses need to understand their clients — and here’s where customer insights come to play. Customer insights (aka consumer insights) are data points that explicitly shed light on the ideal customer persona, preferences, and behaviors.
How is it any different from market research data?
While market research data presents facts, customer insights flesh them out to make them more actionable. As a result, businesses can capitalize on opportunities and enhance personalization to enrich the customer journey.
In short, customer insights will fuel personalization and amplify its effects.
Putting theory to practice: Using customer insights to enhance personalization
Now that it is evident that customer insights are an essential part of personalization let’s take a look at how to convert this data into results. Whether you wish to personalize your website or your mobile application, or your recommender engine, here are a few ways to achieve such goals:
1. Improve data quality
While customer insights are the building blocks necessary to build personalized engagement strategies, marketers need raw structured and unstructured data to choreograph these insights. Fortunately, 81% of consumers are willing to share data to benefit from personalization. So there is no shortage of data — whether it’s first-party or third-party. However, problems arise when there is an issue with data quality. After all, insufficient data breeds poor quality insights, which, in turn, would create a dissonance between a business’ communications and its customers.
Given this background, the first line of action would be to ensure there is no data contamination. Once the preventative measures are in place, they should complement reparative measures such as data cleansing and filtering. Only when businesses are genuinely mindful of the data quality would they be capable of enjoying the benefits of personalization.
2. Invest in tools and technologies
Now that you have high-quality data let’s talk about processing it.
Personalizing your business ecosystem will require a new and improved set of tools, technologies, and platforms to upgrade traditional operations, infrastructure, and workflows. You might have to invest in solutions powered by Artificial Intelligence (AI), Machine Learning (ML), Deep Learning (DL), etc., to generate and give effect to the customer insights, thereby translating them into personalization.
Better yet, invest in a Customer Engagement Platform (CEP) that will blend the above-mentioned technologies to curate personalized customer journies and experiences.
Additionally, you will require skilled talent to leverage such assets to maximize the throughput. At the same time, the existing workforce should undergo training and skill recalibration to keep up with the disruptions. Ultimately, you will be left with a cross-functional, borderless team based on collaboration and subject matter expertise.
Such a two-pronged approach to processing information can finetune personalization and delight customers in more meaningful ways.
3. Identify customer requirements
Remember, the customer is the focal point of all your initiatives related to personalization. And once you have the means and medium to understand your customer at the grassroots level, you can begin to segment them based on their age, sex, occupation, etc. About 20.61% of marketers are already considering demographics during decision-making. So, rather than falling for the usual, don’t just stop there; dive deeper into these cohorts to form micro-segments depending on behavioral, geographic, psychographic, and granular demographic data. Once you have divided them into the smallest functional unit, you can analyze these groups to understand market gaps or unfulfilled customer expectations that you can cater to. Plus, the resulting hyper-personalization could be your competitive differentiator!
4. Inject personalization with relevance
Personalization and relevance are two faces of the same coin, with one being unable to exist without the other. After all, personalization will lose its charm if it loses relevance, and vice versa.
The best way to illustrate the interplay between personalization and relevance is through a quick study of the expert in this area — Amazon. Let’s look beyond the fact that Amazon personalizes its homepage for every customer and even personalizes all marketing communications. At the crux of it, the relevance of the unique customer journey accentuates personalization.
For instance, when Amazon sends customers emails, the content and product recommendations are personal and relevant to the customer. Insights like browsing data and purchase history are what make this degree of personalization a success. This makes the receiver feel they have a one-to-one relationship with the business, which builds brand loyalty.
The result? The titanic success of Amazon. This is a fine testament to how personalization should be served- with a shot of relevance to achieve results.
5. Treat customer data with respect
While it is a positive indication that users are willing to trade personal information in pursuit of personalization, data is a power and a responsibility. With consumers becoming increasingly aware and governments cracking down on illicit use of consumer data, companies have to maintain absolute transparency to earn trust and credibility. Even the slightest privacy concern can erode trust and bring a company down on its knees. With such expectations, companies should vie to adhere to the highest data privacy and security standards to safeguard customer data. Only then would their attempts to collect customer data attract any participants.
Closing thoughts
As personalization becomes ubiquitous, brands must look beyond just adding receiver names to emails. They must offer more to stand out from the competition and embrace customer insights-led dynamic personalization.
Fortunately, help is around the corner. Several low-cost, high-impact solutions available in the market can help you kick off in this direction. All you need to do is locate a solution that suits your brand’s needs, and the rest will weave itself into a success story!