The practice of using analytics to make advertising messages and product experiences feel unique to each customer. Personalized marketing is much more than just inserting the customer name into the same marketing email that goes to all of your customers. It’s about reaching the right person with the right message at the right moment with the right suggestions.
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Personalized marketing is a strategy that uses data to connect with target audiences and existing customers to offer an optimized marketing experience. By collecting and using data, businesses can identify patterns to more effectively target potential customers. These insights not only allow marketing strategists to identify their target audience but also help them nurture leads throughout the buyer’s journey.
What’s more, personalized marketing strategies allow businesses to reach more people without spending money on marketing methods that are ineffective or target the wrong audience.
Personalized marketing is much more than just inserting the customer name into the same marketing email that goes to all of your customers. It’s about reaching the right person with the right message at the right moment with the right suggestions.
When you personalize your marketing, you send the right message to the right people at the right time. Not only does it give your content a touch of humanity, it can drive revenue, too. Here’s why you should make your marketing unique to every customer.
What is personalized marketing?
Personalized marketing is when you tailor your marketing based on the data you’ve collected from your contacts. This includes interests, shopping preferences, purchase history, and more.
When you use this data to customize the content your contacts receive via email, ads, and other platforms, you’re using personalized marketing.
Personalized marketing trends
As companies have become more familiar with this strategy, personalization has affected many forms of communication with customers. Here are a few recent trends:
Personalized emails: Emails that have personalized subject lines are 50% more likely to be opened
Less generic advertising: With the rise of personalization, consumers are becoming increasingly less accepting of generic ads: Impersonal shopping experiences frustrate nearly three-quarters of customers. On the other hand, over 70% of shoppers respond to marketing only when it’s customized to their interests.
Personalized product recommendations: 75% of consumers are more likely to buy after receiving personalized recommendations.
The benefits of personalized marketing
When done right, both businesses and customers win. Some of personalized marketing’s main benefits include:
1. A more satisfying customer experience
The more we feel that someone understands our needs, the more inclined we are to trust them with our problems.
When you deliver a personalized experience to a customer, it tells them that you understand their pain points. It makes their whole customer journey easier, and it transforms the buying process from a transaction into a relationship.
As you build that relationship, the customer learns to trust your recommendations and will be more likely to go to you when they have a need you can meet.
2. Increased customer loyalty
You know the value of making your customers happy. After all, 65% of a company's business comes from repeat customers.
Personalization can also earn your customers’ loyalty. Over 40% of consumers say they will like become repeat customers of a business that offers a personalized shopping experience, and 80% of self-identified frequent shoppers only buy from brands that do so.
3. A better return on your marketing investment
Personalized marketing is a more cost-effective strategy than traditional advertising. When you send a general ad out, some percentage of the audience will have no use for the product. Your return on investment (ROI) is limited.
Personalized recommendations, however, can drive customers to spend more. Almost half of the shoppers surveyed made an impulse purchase based on a brand’s suggestions, and 85% of those people were happy with their purchase.
According to McKinsey & Company, one of the world's leading producers of marketing insights, personalized marketing can increase sales by 10% (or more!) and deliver up to 8x the ROI on what you spend on marketing.
The challenges of personalized marketing
According to a survey of marketing influencers, nearly two-thirds reported that data-driven personalization was the most difficult digital strategies to execute.
Don’t let that stop you. It might not be easy, but it can be worth it. Here are some common struggles and how you can overcome them.
1. Gather data without hassling your customers.
To deliver a truly personalized experience, you need to be able to accurately predict how each person will respond to a certain product or scenario. That means you need to collect data about your contacts (stored in a CRM), which can be hard to do.
There are 2 basic channels for gathering data:
- Analytics track people’s behavior. The pieces of code you place on your site don't intrude on the customer experience, but some customers are uncomfortable when they see ads for products that they recently viewed.
- Customer surveys and forms are more transparent, and many customers are more comfortable with them, but they take time to fill out. And the more questions a form has, the less likely a participant is to finish.
It's difficult to walk the line between transparency and convenience, but it’s possible. Before you make a change, ask yourself, “Would I actually appreciate this, or would it annoy me or creep me out?” Always put yourself in the customer’s shoes.
2. Strike the right level of subtlety.
While some consumers like when brands speak to their interests, they dislike when those brands come on too strong. Only 6% of consumers in a 2017 survey expressed appreciation for retargeted ads.
It's all about balance. You need to clearly show the value you’re providing with personalized content and avoid aggressive targeted ads. At the same time, you need to emphasize their respect for privacy without focusing on it so much that your audience starts to wonder if they should be worried.
3. Allocate enough resources.
To develop an effective personalized marketing strategy, companies need to have the staff, funds, and time to do it. Automation can go a long way toward reducing the time and labor costs of personalization, but the overall strategy still needs to come from people.
Personalized marketing needs to be planned, targeted, and tracked. Tech can handle the nitty-gritty of data aggregation, but you still have to figure out what data matters to you and how to use it. You have to know how willing your customers are to share their information, when to collect it, and when to send out personalized messages.
You also have to keep track of what's working so you can funnel your resources into the most effective channels. Only people can do that. Make sure your marketing team has enough resources and that you’re not relying on your algorithms to handle everything.
How to create a successful personalized marketing strategy
1. Create a team to spearhead the effort.
To structure and monitor a personalization strategy, you need a team of skilled professionals, including:
- People who know the tech
- Experts in developing use cases
- Customer outreach professionals to handle questions
- Strategic campaign designers who have experience with personalization
Coordinate with senior leadership so that your efforts align with larger corporate goals, and make sure you have a plan in place to produce high-quality content with an appealing design.
2. Collect information, but respect people’s privacy.
As mentioned, customers want personalized experiences, but many are also wary of having their personal information out in the world. Remember to think about what data is most effective to track, and focus on the data that will allow you to deliver the best experience to your customers that you possibly can.
As a consumer, who would you trust more?:
- A company that only prints “We care about your privacy” at the bottom of their emails
- A business that includes a detailed breakdown in its welcome email explaining how they will use your information, what you’ll get in return, and how you can opt out if you want
You’re likely to trust the second company more. That trust can then solidify as your relationship with the business develops and they stay true to their promise to only send you high-quality personalized content.
3. Use data to segment your audience.
When you have enough data about your contacts, you can organize them based on:
- Demographic data
- Spending levels
- Product interests
- Buying patterns
Not all of these segments will be relevant to your marketing, so decide what characteristics will help you send them messages that matter.
4. Choose where you'll personalize.
There are a number of different platforms that can benefit from personalization. You can send automated emails, remarketing ads—even landing pages. It all depends on where your customers are spending time. Use your data to figure out optimal placements.
Personalized marketing FAQs
Why is personalized marketing important?
Personalized marketing is important because it allows you to connect with your customers and more effectively reach your target audience. It also humanizes your organization, allowing your customers to get to know you as well.
Personalized marketing also mitigates waste. Rather than spending your marketing budget on reaching a broad audience, you can hone your efforts on a more defined group. With a marketing strategy personalized for your business and your customers, your efforts are focused on who you want to reach in a way they will appreciate.
What is an example of personalized marketing?
Personalized marketing takes many forms, here are a few examples:
- Personalized emails: From custom subject lines and greetings to personalized messages, there are plenty of ways you can add a personalized touch to your email campaigns.
- Product recommendations: If you’ve ever made a purchase based on a brand’s suggestion of products “You Might Also Like”, you know the power of personalized product recommendations.
- Personalized products: Coca-Cola’s “Share A Coke With…” campaign is one of the most successful examples of product personalization.
What makes personalized marketing such a successful strategy is there are so many customizable strategies businesses can leverage depending on their needs and target audience.
How effective is personalized marketing?
Personalized marketing is very effective, especially when it is used to make long-lasting relationships with your customers. Customers are more likely to return to a business they feel connected to. A solid personalized marketing strategy will help you establish that connection, it’s up to you to add the finishing touches that will keep bringing them back again and again. If you build a good connection through personalized email marketing, the customers who love you will spread the word and help you expand your audience.
Build customer relationships with personalized marketing
Personalized marketing strategies give your business the ability to make strong connections with its customers on a very personal level. Consumers expect businesses to customize their shopping experience to their interests. Good personalized marketing makes for happier customers, increases brand loyalty, and improves profits. This one-on-one connection will establish a bond that will keep the customer coming back. You are able to give the customer exactly what they need to feel comfortable about doing business with you. It can be challenging, but the payoff is worth it!