Personalization of marketing communication is not just a good practice for retailers, but also a way to help their businesses survive. The advent of the internet has rendered retailers the opportunity to offer their customers products specifically customized for them. This is in direct contrast with mass marketing where the objective is to broadcast product offerings to reach the largest number of people possible.
Personalization of marketing communications is to treat each person as a unique individual with distinctive needs and to provide them with customized solutions 1. To be able to personalize marketing communications, retailers need to learn about the customer’s individual needs and preferences in terms of the types of content that the customer is willing to receive and other person-specific characteristics.
The strategic use of data collected during the online buying process and social media sites may be a good starting point for retailers to know their customers better.
Data – the foundation for the personalization of marketing communication
The digitalization of the entire advertising industry is generating ever increasing amounts of data that must be collected, analysed and interpreted 2. Lying hidden in all this data is information, potentially useful information that is rarely made explicit or taken advantage of. We must just find the data.
The data we need is right before our eyes. Says Woopra: “Social media interactions, email marketing, landing pages, surveys, customer relationship management (CRM) tools, and re-targeted ads are all customer touch points that can tell you about your customer’s needs and interests”.
Once the data are sorted and tabled, retailers can segment and target their customers and also position their products accordingly. However, here the process is done for each customer specifically according the individual’s unique needs, desires and behaviors (customization). So, once customization has been achieved, it makes personalization of marketing communication possible.
Personalized marketing communications used by online retailers
Online shopping has become an important channel for retailers. Unfortunately, it does not afford facile development of an interpersonal relationship or facilitate easy interactions between buyers and sellers 3. Even worse, many retailers use the online channel to send generic marketing messages via email or text, to the annoyance of their customers. This, however, is not personalized marketing communication.
Retailers need to collect and analyse data about the buying behaviour of individual customers. The profile of the customer will provide guidelines for the retailer how to personalize his/her marketing communication message. Daniel Newman, CEO of Broadsuite Media Group suggests the following ways brands can use data to build personalized marketing tactics:
- Capture complete data – are you collecting every piece of data that you possibly can? Brands today have more consumer information at their fingertips than ever before, and they can use that data to get to know their customers in depth.
- Social data – social cues and signals are excellent ways to figure out more about customers than traditional sources like email, demographics, or purchase records.
- Segmentation – you need to segment your audience into smaller groups for more accurate targeting.
What does a personalized marketing message looks like?
You’ve done all the hard work by sourcing and sorting your customer data. Now it is time to create a personalized marketing message for your customer. Below is an image from GIGYA, a customer identity management agency. The ad shows beauty products that are specifically recommended for a customer with a unique skin type and facial features.
Note that the narrative is in the second person – thus the ad is addressing the individual personally.
The advantages of personalized marketing communications
Retailers that personalize their marketing communication may enjoy the following advantages says Infor Marketing Management:
- Improved Return on Investment (ROI) – one study found that personalized website experiences resulted in an average 19% increase in sales. For email, personalization is even more powerful, generating transaction rates and revenue six times higher per email than non-personalized emails.
- Outflanking the competition – with personalization, retailers can increase the impact of each interaction to get consumers’ attention and time online – at the cost of the competitors.
- Customers expect it – most consumers said it’s important to receive relevant offers when shopping online. And, almost a third wants more personalization during their online shopping experiences, reports Infor Marketing Management.
“Personalization is retail’s future; especially as more advanced technologies allow marketers to handle personalization more effectively”, suggests Infor Marketing Management. However, retailers have to invest in the right technology, including marketing automation, CRM, social media management and data analytics tools, as well as more advanced e-commerce platforms.
Bringing the person back into the marketing message may help soften the total onslaught of marketing atomization by means of the internet of things, big data and bots.
Have a peek at this short video from Evergage re personalized marketing communication.
1 Järvinen, J. and Karjaluoto, H. 2015. The use of Web analytics for digital marketing performance measurement, Industrial Marketing Management, 50:117-127.
2 Grether, M. 2016. Using Big Data for Online Advertising Without Wastage: Wishful Dream, Nightmare or Reality? GfK Marketing Intelligence Review, 8(2):38-43.
3 Lee, Y.J., and Dubinsky, A.J. 2017. Consumers’ desire to interact with a salesperson during e-shopping: development of a scale, International Journal of Retail & Distribution Management, 45(1):20-39.