Moving Personalization from Tactic to Strategy

Personalization in communications is not new. Direct marketers have used it in direct mail since the first computers and printers were used for marketing in the mid-twentieth century. Today, variable data printing technologies mean that marketers can personalize every word of a direct mail package, from outer envelope to letter, brochure and response device. Email marketers have had the same option since email’s first day.

Today, personalized email or direct mail communications don’t seem optional. Yet many marketers that use personalization often report poor results. So, what has held personalization back?

Segmentation is Not Personalization

Many marketers confuse personalization and segmentation. For them, creating personalized communications is repurposing the same message for five, ten or maybe more times, with different variable information for each specific audience segment. That was a reasonable strategy in the days before the Internet created an ocean of customer and user insights. Today, simple segmentation doesn’t meet the needs or expectations of customers. 

Looking at personalization this way makes it seem like a marketing tactic. Some marketers still think using some data about a prospect or customer, such as their name, address, city or state, is personal enough. It isn’t. Marketers have greatly underestimated how relevant consumers have expected their customer experiences to be. Thinking of personalization as a tactic to be used in communications has kept marketers from getting the most from it. 

Insights Power Personalization

Brendan Witcher, an analyst with Forrester Research, points out that marketers need to use  data insights to assure that every point of touch is contextually relevant to each individual customer. This is one result of the Amazonation of marketing. Today’s consumers want immediate value. When a marketer doesn’t provide it, consumers will look for it somewhere else. A consumer’s expectation of a great customer experience increases with each positive experience. Consumers are now trained to have increasingly greater expectations for the customer experience.

Notes Brendan Witcher:

• 68% of shoppers won’t return if an organization’s website doesn’t provide a satisfactory customer experience
• 77% of consumers have chosen, recommended, or paid more for a brand that provides a personalized service or experience
• 73% of consumers prefer to do business with organizations that use their information to make experiences more efficient

Don’t Think Personalization. Think Individualization.

Still, using data to improve the customer experience this way can be immensely complex. It’s not just name and address or even demographics that customers have come to expect from communications. Data needs to drive ideas and creative at the front end of the marketing process. And, it needs to support ideas on the back-end. Personalized creative is a blend of data-driven creative process and data being used to trigger connections between the brand and people throughout the customer experience.

This can’t be done with simple segmentation or by creating a few personas. The future of personalization is using data to create real-time engagement of customers as segments of one. This requires marketers to have a way to centralize their data, to drive predictive analytics to test, learn and optimize customer engagement across every relevant customer touch point. Think of this as individualization of the whole customer experience, not personalization of communications or single elements.

Witcher cautions brands to “be overt with the collection of customer data, but covert about communicating what you know about them. The best experiences should feel natural and non-intrusive to the customer; taking into account everything you know about them.”

Improving the Customer Experience

So, what kinds of data do marketers need to use to create an individualized customer experience? At a time when some marketers are testing everything from personalized products to personalized prices, too many organizations still haven’t gotten beyond the basics of name, email and address. Organizations need to go well beyond this basic data, and start using a variety of data about their subscribers and customers.

Integration of different types of data is how some marketers are able to create the kind of individualized marketing programs that engage customers. This data empowers  marketers with greater insight into their subscribers’, prospects’ and customers’ identifies, interests and preferences. It provides the context marketers need and insight into customer behaviors that can drive individualized marketing programs.

Combing Data Types

To gain the insights necessary to drive individualized marketing, it takes a combination of first-party, second-party and third-party data.

• First-Party Data: Data that is collected and stored by an organization about their site visitors, subscribers, prospects or customers.
  • Customer data: This may include names, addresses, email addresses, and phone numbers
  • Website interaction data: The pages, categories, and articles viewed, reviews, downloads, etc.
  • Communication and landing page data: Response, products and services, messages, offers, calls-to-action, subject lines, etc.
• Second-Party Data: Data from partners like publications, complementary websites, influencers, etc., that is paid or bartered for (e.g., a brand works with a publisher’s audience data or retailer’s data).
• Third-Party Data: Large-scale data purchased from a compiler (Experian, Acxiom, etc.) or aggregator (Blue Kai, EXelate, etc.)
  • Demographic data: Age, income, household composition, occupation, etc.
  • Lifestyle data: Attitudes, interests, personality, values, opinions and lifestyle
  • Intent: Actively searching or about to buy a product/service. Derived from online browsing signals and/or predictive models of offlline behavior.
  • Interest: Consumers engaged in content or previous purchasers of a product/service. Derived from online browsing behavior and offline data such as past purchase transactions, and catalog and magazine subscriptions.
  • Location-Based: App location user data collected from location data providers
  • Firmographics (for B2B marketers): Industry, location, size, business structure, performance, etc.

No Two Organizations Use the Same Data

How this data is combined will depend on the products, services, categories and individual organizations using the data. For early adapters, Artificial Intelligence can help with this process. For all marketers, this kind of hyper-personalized, individualized marketing is not a destination, but a journey. Ultimately, the question isn’t if marketers should use this approach. Once consumers experience it from some marketers, they begin to expect a more individualized approach from all marketers. If your organization isn’t providing it, isn’t it time that you start working towards this approach?      

Need help with individualized communications or your organization’s journey toward improving the customer experience? Reach out to us at info@jacobsclevenger.com.