- Personalization is becoming the cornerstone of nearly every marketing strategy.
- If used strategically, personalization can significantly boost revenue.
Marketers worldwide can boost their revenue by intelligently capitalizing on personalization to drive engagement, loyalty, and growth. The digital marketing realm is fighting declining website traffic and the phase-out of third-party cookies, pushing them to find new ways to maximize visitor interaction to boost revenue. Instilling personalization can be a great point to start.
Customers nowadays are constantly bombarded with countless advertisements that seldom come with even a hint of personalization. The audience craves personalization, and businesses that facilitate this aspect can potentially garner their attention and circumvent the competition.
Here, we shall discuss the core of personalization, how it can be a vital trail for marketing strategies, three foundation pillars of personalization, types and extent of personalization to consider, how artificial intelligence can be used in the scenario, how different brands could leverage personalization to boost revenue and related aspects.
Personalization: An Important Marketing Strategy Trait
Eventually, personalization in marketing will be widely accepted as a crucial aspect of a successful strategy or campaign. It’s like a paradigm shift from generic messaging to crafting an experience tailored to individual customers. This one-to-one approach has the potential to foster stronger connections, boost engagement, and ultimately drive revenue.
Note that consumers nowadays are already used to content tailored to their interests. They get personalized social media feeds in response to what users have searched in the past. With searches also getting personalized, consumers will soon start expecting such an experience at every touch point.
Statistics Showcasing the Importance of Personalization
Adobe found in a study that 73% of consumers prefer companies and brands that use their personal information to personalize their experience. It also points out that generic marketing feels impersonal and is easily ignored. Moreover, personalization shows that the brand understands its audience, and this increases their receptiveness.
A study by Campaign Monitor says that personalization emails can generate up to six times higher click-through rates than generic emails. This is because when customers receive an email with their names, purchase history, or interests reflected in the content, they’re more likely to pay attention and take action.
Similarly, a survey by Epsilon suggests that personalized product recommendations on e-commerce sites convert at a rate 131% higher than generic recommendations. When brands understand a customer’s browsing behavior and past purchases, the marketing team can suggest relevant items that lead to more sales.
Understanding the Three Pillars of Personalization
Personalization is no magic potion but acts like one; experts suggest that any business can capitalize on personalization if they understand these three pillars.
- Harnessing Customer Data
You can only build a substantial house with a foundation. Similarly, you can only have a successful personalized marketing campaign by harnessing the power of customer data. Data allows brands to segment the audience based on demographics, interests, behavior and purchasing habits.
A study by McKinsey & Company revealed that companies that capitalize on personalization achieve customer satisfaction scores 20% higher than those that don’t. Knowing your audience lets brands tailor messaging and offerings to their specific needs.
Even if demographics provide a basic understanding of the target audience, marketers must learn to dig deeper. By tracking website behavior, social media interactions, and purchase history, marketers can attain higher levels of personalization and create a more comprehensive picture.
There are various data collection methods available for marketers and businesses. They can promote website forms to capture crucial information like email addresses and preferences during sign-up or purchases. Website tracking tools can be used to analyze browsing behavior. Marketers can also track social media interactions and gather direct input from customers.
- Connectivity: Building a Strong Bridge
Data is the foundation of successful marketing strategy, but to take advantage of data, businesses need to find a way to connect it with marketing efforts. Marketers can develop customer data platforms (CDPs) that act as a central hub to store and organize all customer data from various sources.
Plus, many marketing automation tools are available that can automate tasks like sending personalized emails, offering product recommendations, and retargeting website visitors with relevant advertisements. According to the Enterprise Marketing Trends report, marketing automation tends to increase lead generation by 53% and boost customer retention by 7%.
Similarly, Application Programming Interfaces (APIs) allow different platforms to communicate with each other. For example, businesses can connect their e-commerce stores with email marketing platforms to send personalized product recommendations based on customer’s browsing history.
- Personalizing Content & Distribution Workflow
With a strong foundation and connected system, businesses can induce personalization in content creation and delivery. Creating dynamic website content that adapts to individual users could help. They can display personalized product recommendations on an e-commerce website, showcase recently viewed items on the homepage, or tailor email subject lines with the customer’s name on them.
Studies conducted by Epsilon show that personalized product recommendations have a conversion rate of 131% higher than generic recommendations. Marketers can segment their audiences based on the data they’ve collected. They can then send targeted emails with relevant offers and promotions. Similarly, social media platforms can also promote campaigns to specific demographics.
Marketers must work on delivering personalized experiences across all touchpoints, including emails, social media, websites, and mobile applications. For example, customers who abandon their carts might receive a personalized email reminder with a discount code to incentivize them to complete the purchase.
Different Types of Personalization
After understanding the importance of personalization and how it impacts businesses and marketers in boosting their revenues, let’s discuss the different types of personalization that can be leveraged as and when required.
- Location-Based Personalization
This aspect of personalization is best for small businesses and giants entering new markets. For example, a local sports apparel store can use location data to send targeted SMS alerts to customers near the store about upcoming sales. A coffee shop can send personalized alerts to promote new offerings or menu options.
A study conducted by Retail TouchPoints found that nearly 72% of consumers asserted that personalized offers based on their location are more likely to influence their purchases. For instance, a buyer wanting workout equipment can go to the local sports shop or to the local coffee shop for a preferred cup of joe.
- Channel-Based Personalization
Businesses must be active across multiple channels to stay relevant, and they can incorporate channel-based personalization. For example, a travel company might send personalized email recommendations for weekend getaways to users who are typically active on email or targeted social media ads with visually appealing destinations on platforms frequented by their target audience.
According to Statista, 72% of consumers prefer receiving communication through preferred channels. Incorporating this aspect in marketing campaigns can impact their success and eventually boost revenue.
- Behavioral Personalization
E-commerce stores can track customers’ browsing history and past purchases. They can then use this data to display personalized product recommendations on the homepage, suggest complementary items during checkout, or send targeted email campaigns with deals on similar products.
Research by McKinsey and Company says that companies that excel at personalization could achieve customer satisfaction scores that are 20% higher than those of traditional methodologies.
- Customer-Data Based Personalization
Personalization would be sharper if marketers could leverage the details of customer data. A streaming service like Netflix can analyze customers’ viewing habits and recommend movies or shows based on their preferred genres, actors or directors. They can further use this data to personalize their interface, highlighting new releases in categories the user watches frequently.
How Brands Can Leverage Personalization to Boost Revenue?
The market is nearly saturated with generic marketing messages, and customers eagerly crave personalized experiences catering to their needs and interests. Marketers can use personalization to transform interactions from one-way broadcasts to meaningful conversations. Here’s how personalization can boost revenue.
- Increased Conversions and Sales
Businesses can use personalization to increase conversions and sales. For instance, an online shoe store could skillfully analyze customer preferences, browsing habits, and past purchases to recommend complementary products like socks, shoe care kits, etc., during checkout.
When customers feel a personal connection with a brand through messages and emails, it triggers an emotional response and could boost conversion rates and sales.
- Enhanced Customer Engagement
Personalization can enhance customer experience and engagement. For example, e-commerce platforms can send personalized emails about upcoming sales, or streaming services can capitalize on customer viewing habits and send them messages about new releases.
Customer engagement is a significant aspect of a marketing strategy, and personalization can be leveraged to enhance engagement, which leads to increased revenue.
- Improved Customer Retention and Loyalty
Brands can use personalization to improve customer retention and loyalty, which leads to repeat purchases and boosts revenue. For example, an airline can personalize its customers’ experience with loyalty programs and targeted rewards based on their travel preferences.
Research by McKinsey and Company suggests that personalization can increase customer lifetime value by up to 10%. It’s a statistical fact that businesses thrive on repeat purchases, and personalization can help.
In conclusion, personalization is the foundation of a successful marketing strategy in today’s era. Marketers and businesses can work on gathering customer data, segment their audience, provide personalized content and recommendations, inducing personalization across all and tracking and measuring results to enhance effectiveness.