Modern consumers have come to expect companies to deliver personalization in their marketing and services. Mega-corporations like Amazon and Netflix use their trove of data to recommend products they think you’ll enjoy. Smaller businesses retarget their customers through custom messages using loyalty program information. No matter whether your business is large or small, you can take advantage of personalization to increase your revenue growth.
Why personalization works?
Personalization has long been a part of commerce, though in different forms over history. Whether customers were purchasing a custom-tailored dress or ordering “the usual” from a preferred eatery, personalization offered a chance to build a relationship.
Research from McKinsey shows that 71% of consumers expect companies to deliver personalized interactions. Some 76% get frustrated when they don’t receive a curated experience.
With so many options in the marketplace to shop from, brand loyalty continues to plummet. Many consumers say they must be incentivized for their loyalty, whether that’s through discounts or an enhanced service.
Among the five loyalty types defined by the SAP Emarsys Customer Loyalty Index, in 2023, the majority (49%) of consumers fall under incentivized loyalty. However, even incentivized loyalty has plummeted 36%, from 76% to 49%.
Customers want to feel special and be recognized for their individualized interests and personality. Personalization helps showcase that companies understand their unique needs and desires.
McKinsey’s research additionally shows that when businesses implement personalization efforts, they see a 10% to 15% revenue lift. Additionally, some companies that particularly excel at personalization generate 40% more revenue from those activities than average players.
Personalize your content
- Segment your email list into categories relevant to your business and industry. Then, deliver content based on the buying habits typical for that niche group.
- Use automation for dynamic content, like a name field, to make each message feel uniquely tailored to the recipient.
- Triggered emails, such as for abandoned carts or newsletter sign-ups, can encourage customers to re-engage with content. Emails sent on personal dates, like birthdays or loyalty program anniversaries, can highlight recommendations based on browsing history. About 70% of e-commerce shopping carts are abandoned, but follow-up emails about them are opened 50% of the time. Research shows that of that 50%, about 20% click through back to the website, and half of those complete their sale.
- In response to the actions (or inactions) a potential customer takes online, drip campaigns prod follow-up. Follow-up messages can be used direct customer behavior based on what they’ve shown interest in.
- You can use location-based geotagging to give your online presence a brick-and-mortar feel. Clothing retailers can highlight boots, umbrellas, or coats if you know the weather in an area is rainy.
- Get creative. Coca-Cola’s globally famous “Share a Coke” campaign increased sales 7% in Australia in just the first month. While in the U.S., during its peak, the campaign pushed the entire soft drinks industry up 2%. A study by Marketing Week indicated that 51% of consumers felt a more positive connection with Coca-Cola after encountering a personalized bottle. Some colleges utilize their alumni network to hand-write letters to prospective students to commit to the school.
Risks and best practices
Data collection fuels personalization efforts through tracking, demographic generalizations, and artificial intelligence in the digital age. While people do seek out companies that implement personalization efforts, if thet tracking feels too invasive it can quickly turn off consumers.
Personalization in marketing has to find the right balance between curated and creepy.
In 2012, a story circulated about Target using predictive analysis to determine customers were pregnant — before that information had been explicitly shared with them — drawing outcry. The example of a father finding out his teen daughter was pregnant from a custom coupon book she’d received may not have been entirely accurate, but it did serve to highlight the unease consumers feel about tracking that gets too personal.
You also can’t be too careless. If you are using form data to personalize messages, ensure you have backups in case a form field is empty so that customer “Bob” doesn’t get an email addressed to “First Name.” Also, plan to periodically check any automated messages so they don’t glitch and send messages out that aren’t resonating with the target.
Using personalization can continue to be a way of aligning your marketing goals to meet the needs and desires of your targeted audience. It’s another tool showcase that your company is one that consumers should WANT to buy from.
If you’re looking for help to brainstorm creative ways you can personalize your marketing content, reach out to the expert team at Yankee Custom Marketing.