Despite the benefits of personalization in marketing becoming more apparent over the years, the approach isn’t actually anything new. In fact, it’s been around since the 1870s – when businesses would handwrite letters to grow their bottom line. Thanks to new technology and customer expectations evolving, personalized marketing is once again a hot topic. And today, it’s much more than using names and locations.
In this article, we talk about some of the key benefits of personalization in marketing, as well as some of the current challenges that marketers face. That way, you can decide if your brand is in the position to adopt personalization tactics now, or in the future.
- Boost engagement across your website
- Grow your conversion rates
- Keep your customers coming back
- Strengthen emotional connections
- Create consistency across channels and devices
- Does personalization really face a looming deadline?
- Marketers are struggling to prove ROI
- The perils of customer data management
- Disconnected and disorganized content
- The future of personalization
Boost engagement across your website
The longer someone spends on a site, the more likely they are to become a customer. Personalization enables you to create on-site experiences that resonate with segments of your audience or even as individuals – resulting in more time spent on your website.
But why – psychologically speaking – do we prefer personalized content?
Simple. It’s more relevant. As human beings, we’re naturally more inclined to engage with information that we find relevant to our needs and personally interesting to our character. The science behind this is that it all has to do with your brain’s reticular activating system (RAS) – which is the gateway that information passes through to reach your brain. Your RAS filters through information so you know what to pay attention to. Have you ever missed parts of sentences? Or misheard someone speak entirely? That’s “selective attention” or “selective hearing” – the ability to focus on one element while ignoring additional information at the same time. And it’s controlled by your RAS.
“Due to the way RAS works, we naturally orient to information or ideas that we are invested in,” says psychologist Dr. Rachna Jain.
“The trick is that it needs to be relevant, meaningful, and usable. Don’t be afraid to get specific and target your audience tightly – the more relevant you are to a specific group of people, the greater attention you will receive.”
In fact, other research has demonstrated shoppers perceive greater media enjoyment when exposed to a personalized online experience than that of a standard, static one. What’s more, adult learning theory states that people are much more interested in content that addresses a specific problem they are having at the time. Personalized marketing across your website is therefore key to improving engagement. By combining customer data and content intelligence, you can create more relevant experiences that keep your visitors active on your website for longer.
You can target offers based on products or brands that a person has clicked on. You can educate him or her on topics related to the products being explored. And you can better engage returning visitors, improving their experience with each visit. That’s not all though. Website personalization enables you to go one step further, by responding to an active visitor’s behavior to influence his or her actions.
For instance, triggering messages based on the length of time he or she has spent on a particular page, interacting with a product, or if his or her mouse goes to close the tab.
Grow your conversion rates
Naturally, personalized marketing leads to better conversion rates.
In fact, a recent report from Econsultancy found that:
- 94% of brands see more sales after website personalization
- 93% of brands see more sales after search engine personalization
- 92% of brands see more sales after email personalization
It’s clear that providing personalized experiences can boost customer acquisition. For example, when a shopper visits your website for the first time, personalization offers a small but significant step towards a one-to-one buying experience. If you can identify the source that led the visitor to your site or their location, then you can deliver a welcome message that is much more in tune with their needs. Personalization techniques can also engage a first-time visitor in real time with a compelling call-to-action, such as a ‘deal of the day’ or relevant newsletter offer.
Another financial benefit of personalized marketing is the ability to increase your average order value through upselling or cross-selling activities. By personalizing your cross-selling approach based on a customer’s purchase history, you can gently nudge them into buying more than one item. Equally important is how much more effectively you can upsell your products. While shoppers tend to be open to the idea of purchasing more items, to do so successfully requires hitting them with the right message at the right time. Personalization paves the way for brands to achieve this. For example, recommending relevant accessories enables your customers to benefit from the natural synergies between your products without them having to navigate through many different areas of your website. And these recommendations work much better if they’re personal.
Research from Accenture finds 75% of shoppers are more likely to buy from a brand:
- That knows their purchase history
- Recommends products based on their purchase history
- Addresses them by name
Keep customers coming back
One of the many benefits of personalization in marketing is boosting retention rates. Not only is the cost of attracting previous shoppers to your website much lower than acquisition-based campaigns, but these customers are also likely to spend more. After all, personalization requires the collection of customer data to work successfully. And the two cornerstones of customer retention are relationship and familiarity. Through the collection of customer data, personalized marketing enables you to build strong relationships with your existing customers while creating familiarity. But, as brands collect more data, shoppers develop greater expectations.
According to Bond Brand Loyalty’s Report, only 25% of 68,000 people surveyed are ‘very satisfied’ with the level of personalization they see from loyalty programs. What’s more, brands that fail to meet customer expectations for relevance and value are at risk of losing their customer base to brands that can deliver. In fact, many marketers struggle to get personalization right because they collect a lot of data they don’t use, and rely too heavily on product-based tactics. Personalized marketing has become too purchase obsessed, with brands focusing on next-best offers and product recommendations. In order to retain customers today, brands need to broaden their delivery of personalization to ensure relevance, build resonance, and show restraint.
“Good personalization means talking to the customer about what they want to talk about; you have to be relevant in the places that are important to them,” says Emily Rudin, Chief Customer Officer at CrowdTwist.
Presenting content or providing an experience that taps into a deeper understanding of who an individual customer may be – rather than just based on their purchasing history – is essential to fostering loyalty and retention.
Strengthen emotional connections
Purchasing decisions rarely come from rational mental processes. Instead, they are driven by our emotions and how we feel at a given moment in time. As a result, content personalization can be used as a differentiation strategy to attract, engage, and retain customers for your brand. In fact, if emotionally charged content is already striking a chord with your target audience, then the impact can be amplified by integrating a layer of data-driven optimization and personalization.
Traditionally, marketers have segmented their audiences based on traits such as age, gender, and location, which has allowed them to tailor their messaging and engage customers on a slightly more personal level. But effective personalization today has moved beyond this. Better customer data and new technology makes it possible for marketers to analyze patterns and journeys to paint a more detailed – and personalized – picture of each customer.
Create consistency across your channels
Your customers interact with your brand across a myriad of different channels. Whether that’s on your website, social media, email, mobile, or somewhere else entirely – and sometimes, they’ll jump between channels multiple times in a day. So, it’s more important than ever to create consistency between them. A shopper’s experience on your website should match up with what they see on social media, which should match up with what they get from you through email, and so on.
As, you may know, the success of your brand depends on planning and aligning your content around your customers. Creating layers of consistency not only improves the customer experience, but drives business performance and boosts revenue too. So, how exactly can you achieve this? Through developing a 360-degree view of your customers (and your content).
You need to be measuring factors such as:
- Purchasing history
However, all of this customer data is worthless on its own. Without robust content data, it’s impossible to deliver contextually relevant buying experiences. True personalization pieces together both customer and non-customer data.
Does personalization really face a looming deadline?
The benefits of personalization in marketing are plenty. But we wouldn’t be providing you with balanced, educational content if we didn’t shine a light on a couple of home truths that are bouncing around the marketing world right now:
According to Gartner:
- One in three marketers will reduce spending on personalization as a line item in their marketing budget by 2021
- 80% of marketers who invested in personalization are likely to abandon their efforts by 2025
But what’s propelling these predictions?
It’s a long road to ROI
High budgets come with high expectations, yet returns on personalization platforms and software are hard to quantify for marketing. And that’s largely down to how we’re measuring the effectiveness of such investments. Most brands who have taken the leap rely on vague customer satisfaction and engagement metrics, which only connect to business value indirectly.
As a result of focusing on metrics too far away from the bottom line, it’s unlikely that marketers will be able to maintain enough financial support for such initiatives.
The perils of customer data management
Research from Gartner finds 27% of marketers believe customer data is the main obstacle to personalization – revealing weaknesses in data collection, integration, and protection. The necessary shift for brands is to focus on first-party data access, which means they’ll need to lean on the customer data that they’ve collected with full consent. Yet, one of the biggest obstacles to doing so effectively is that shoppers aren’t stagnant. They move, they change, and they never cease to be in motion. And, as you may have guessed, the data that they produce never stops either. Successful data management is a fluid process. Proper management of it can therefore seem challenging, stressful, and at times feel downright impossible.
Disconnected and disorganized content
Digitally savvy shoppers have growing expectations that put brands under pressure to deliver the right content, at the right time, to the right person. However, even if you collect every possible piece of data about your audience – gaining that elusive 360-degree customer view – there are still barriers in the way to meaningful personalized experiences.
The reason behind this? Most brands lack sufficient metadata which is necessary to fuel personalization tactics.
And the problem?
If your content isn’t tagged with enough relevant information, then selecting the right content or product offers quickly becomes a guessing game. For example, a car manufacturer’s stock images may live in the DAM, while model specifications may be found in the PIM. It’s impossible to enrich the delivery of such content without communication between the two systems. What’s more, the management of a brand’s content is often all over the place. Between old folder systems, many different content management systems, and teams sitting in silos, it’s a long road to locate and reuse content in personalized campaigns.
The future of personalization
Despite these barriers, the benefits of personalization in marketing greatly outweigh the challenges. Providing such a strategy is executed properly, of course. Successful personalization leads to meaningful, contextually relevant, one-to-one experiences for your customers across all your different marketing channels. Which drives acquisition, engagement, and retention goals, and in turn boosts revenue. And while the challenges cannot be ignored, they can be overcome.
The new era of visual commerce combines content intelligence and dynamic customer data, so that you can deliver rich, individualized content experiences that engage, sell more, and keep your customers coming back. It bridges the gap between personalized marketing and revenue, enabling you to pinpoint the exact content – from your brand, influencers and customers alike – that’s directly impacting your sales figures. And it creates a single view of your content and customer, so that it can continually optimize its selection of the right content, at the right time, to the right individual.
Find out how Johnson’s Baby went from drab to fab with visual commerce, creating content experiences that convert and reaping the benefits of personalized marketing.
This article was originally published June 3, 2016. It was updated for accuracy and comprehensiveness on February 23, 2022.