by Personalization Marketing
Personalized marketing, also known as one-to-one marketing or individual marketing, is a marketing strategy by which companies leverage data analysis and digital technology to deliver individualized messages and product offerings to current or prospective customers. Advancements in data collection methods, analytics, digital electronics, and digital economics, have enabled marketers to deploy more effective real-time and prolonged customer experience personalization tactics.
Beginning in the early 1990s, web developers began tracking HTML calls that their websites were receiving from online visitors. In 2012, the Web Analytics Association (WAA) officially changed its name to the Digital Analytics Association (DAA) in order to accommodate new and developing data streams that exist in addition to the web.
Technology
Personalized marketing is dependent on many different types of technology for data collection, data classification, data analysis, data transfer, and data scalability. Technology enables marketing professionals to collect first-party data such as gender, age group, location, and income and connect them with third-party data like click-through rates of online banner ads and social media participation.
Data Management Platforms: A data management platform (DMP) is a centralized computing system for collecting, integrating and managing large sets of structured and unstructured data from disparate sources. Personalized marketing enabled by DMPs, is sold to advertisers with the goal of having consumers receive relevant, timely, engaging, and personalized messaging and advertisements that resonate with their unique needs and wants. Growing number of DMP software options are available including Adobe Systems Audience Manager and Core Audience (Marketing Cloud) to Oracle-acquired BlueKai, Sitecore Experience Platform and X+1
Customer Relationship Management Platforms: Customer relationship management (CRM) is used by companies to manage and analyze customer interactions and data throughout the customer lifecycle to improve business relationships with customers, assist in customer retention and drive sales growth. CRM systems are designed to compile information on customers across different channels (points of contact between the customer and the company) which could include the company’s website, live support, direct mail, marketing materials and social media. CRM systems can also give customer-facing staff detailed information on customers’ personal information, purchase history, buying preferences and concerns. Most popular enterprise CRM applications are Salesforce.com, Microsoft Dynamics CRM, NetSuite, and Oracle Eloqua.
Beacon Technology: Beacon technology works on Bluetooth low energy (BLE) which is used by a low frequency chip that is found in devices like mobile phones. These chips communicate with multiple Beacon devices to form a network and are used by marketers to better personalize the messaging and mobile ads based on the customer’s proximity to their retail outlet.
Strategies
One-to-one marketing refers to marketing strategies applied directly to a specific consumer. Having knowledge of the consumer’s preferences, enables suggesting specific products and promotions to each consumer. One-to-one marketing is based on four main steps in order to fulfill its goals: identify, differentiate, interact, and customize.
- Identify: In this stage, the major concern is to get to know the customers of a company, to collect reliable data about their preferences and how their needs can best be satisfied.
- Differentiate: To distinguish the customers in terms of their lifetime value to the company, to know them by their priorities in terms of their needs, and segment them into more restricted groups.
- Interact: In this phase, one needs to know by which communication channel and by what means, contact with the client is best made. It is necessary to get the customer’s attention by engaging with him/her in ways that are known as being the ones that he/she enjoys the most.
- Customize: One needs to personalize the product or service to the customer individually. The knowledge that a company has about a customer, needs to be put into practice and the information held has to be taken into account in order to be able to give the client exactly what he/she wants.
Costs and Benefits
Personalized marketing is used by businesses to engage in personalized pricing which is a form of price discrimination. Personalized marketing is being adopted in one form or another by many different companies because of the benefits it brings for both the businesses and their customers.
Businesses
Before the Internet, it was difficult for businesses to measure the success of their marketing campaigns. A campaign would be launched, and even if there was a change in revenue, it was nearly impossible to determine what impact the campaign had on the change. Personalized marketing allows businesses to learn more about customers based on demographic, contextual, and behavioral data. This behavioral data, as well as being able to track consumers’ habits, allows firms to better determine what advertising campaigns and marketing efforts are bringing customers in and what demographics they are influencing. This allows firms to drop efforts that are ineffective, as well as put more money into the techniques that are bringing in customers.
Some personalized marketing can also be automated, increasing the efficiency of a business’s marketing strategy. For example, an automated email could be sent to a user shortly after an order is placed, giving suggestions for similar items or accessories that may help the customer better use the product he or she ordered, or a mobile app could send a notification about relevant deals to a customer when he or she is close to a store.
Customers
Consumers face an overwhelming variety and volume of products and services available to purchase. A single retail website can offer thousands of different products, and few have the time or are willing to make the effort to browse through everything retailers have to offer. At the same time, customers expect ease and convenience in their shopping experience. In a recent survey, 74% of consumers said they get frustrated when websites have content, offers, ads, and promotions that have nothing to do with them. Many even expressed that they would leave a site if the marketing on the site was the opposite of their tastes, such as prompts to donate to a political party they dislike, or ads for a dating service when the visitor to the site is married. In addition, the top two reasons customers unsubscribe from marketing emailing lists are 1) they receive too many emails and 2) the content of the emails is not relevant to them.
Personalized marketing helps to bridge the gap between the vastness of what is available and the needs of customers for streamlined shopping experience. By providing a customized experience for customers, frustrations of purchase choices may be avoided. Customers may more quickly find what they are looking for and avoid wasting time scrolling through irrelevant content and products. Consumers have come to expect this sort of user experience that caters to their interests, and companies that have created ultra-customized digital experiences, such as Amazon and Netflix.
Future of Personalized Marketing
Personalized marketing is gaining headway and has become a point of popular interest with the emergence of relevant and supportive technologies like DMP, geotargeting, and various forms of social media. Now, many people believe it is the inevitable baseline for the future of marketing strategy and for future business success in competitive markets.
Adapt to technology: For personalized marketing to work the way advocates say it will, companies are going to have to adapt to relevant technologies. They will have to get in touch with the new and popular forms of social media, data-gathering platforms, and other technologies that not all current employees and businesses may be familiar with or can afford.
Restructuring current business models: Adopting a new marketing system tailored to the most relevant technologies will take time and resources to implement. Organized planning, communication and restructuring within businesses will be required to successfully implement personalized marketing. Some companies will have to accept that their current business and marketing models will change radically, and probably often. They will have to reconsider the ways customer data and information circulate within the company and possibly beyond. Company databases will be flooded with expansive personal information individual’s geographic location, potential buyers’ past purchases, etc., and there may be complications regarding how that information is gathered, circulated internally and externally, and used to increase profits.
Legal liabilities: To address concerns about sensitive information being gathered and utilized without obvious consumer consent, liabilities and legalities have to be set and enforced. Privacy is always an issue, in some countries more than others, so companies have to manage any legal hurdles before personalized marketing can be adopted.
Event-Based Marketing
Event-based marketing has become a hot topic among marketers in recent years. It refers to prospect nurturing, sales and communication activities that change based on the customer or prospect’s situational needs. Rather than approaching your marketing with a “one-size-fits-all” mentality, for instance, you alter your approach based on the customer or prospect, and the impending changes in their businesses.
Defining an “Event”
Some people misunderstand the meaning of event-based marketing, believing it refers to specific dates. The “event,” however, refers to the activity or change in the customer or prospect.
An event can be any action, activity or change with a customer or prospect that could triggger new buying decisions. Some events are more noticeable, but others are more discreet. Here’s a few trigger events that typically cause significant disruption, thus change within an organization.
- Funding announcements
- Mergers and aquisitions
- Facility expansion, relocation, capital improvements
- Executive leadership changes
- Financial performance
- Hiring Announcements
- Layoffs
- New product or service announcements
- Legal or regulatory issues
Following an event or a new announcement, a salesperson could customize his or her approach based on the impending organizational change.
If you plan on using event-based marketing, though, you’ll need to take a proactive approach towards these business opportunity leads and the customers throughout their lifecycle. Without identifying “events,” you won’t be able to customize your approach based on the customer or prospect’s needs.
Benefits of Event-Based Marketing
Why should you use event-based marketing? According to an article published by Eventricity, it’s not uncommon for businesses to achieve 30% or higher customer response rates when using event-based marketing. The website cites a case study involving the National Australia Bank and ABM Amro Antonveneta, which experienced a 34% average customer response rate when using event-based marketing. This is just an average, and your business may experience even higher response rates.
