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Features, Nuts & Bolts

A Guide to Personalized Marketing In 2019

For decades, advertising campaigns were always based on what marketers believed customers wanted. That's all changed

Marshall Lemon
June 25 2019

For the past few years, marketers no longer have to guess what customers want. Using digital technologies and analytical tools, they can analyze consumer histories and predict their interests with an impressive degree of accuracy. This has opened the door for personalized marketing services, where messaging is so highly targeted that it can resonate with individual customers. And as smartphones become increasingly powerful communication channels and data collection tools, the power of personalized marketing increases as well.

As part of PostFunnel’s Nuts and Bolts series, we’ll delve into the world of modern Martech to shed some light on tools and best practices being used by you – our fellow marketers – in day-to-day strategies. Every month, our experts sink their teeth into another aspect of this fascinating field, hopefully inspiring you to elevate your business through smarter marketing.

What is personalized marketing?

Personalized marketing is a strategy in which businesses use data analytics to deploy customized marketing communications and product offerings to their customers. In some circles, it is also referred to as one-on-one marketing or individualized marketing. Personalized techniques can be applied to just about any type of marketing content, such as in-app advertisements, customized emails, or eCommerce shopping recommendations.

How does personalized marketing work?

Successful personalized marketing requires four main steps:

  • Identifying customers: You must be in a position to locate and contact some portion of your consumer base. The more details you have, the better — ideally, you want to have enough data points to recognize a customer across each contact point, medium, location, and company division that connects them with your brand.
  • Differentiating customers: Next, you need to segment customers based on their value and needs. This will help you prepare marketing strategies that focus on the most valuable individuals.
  • Interacting with customers: Personalized marketing requires you to communicate with customers through channels they’ll be receptive to. Make sure the channel you use to contact customers — be it email, SMS message, social media message, or any other method — is optimized to be cost-efficient and effective.
  • Customizing your product or service to meet customer needs: Inputting a customer’s name into an email or in-app advertisement is only the first step. To strengthen the relationship between a brand and consumer, you must adapt your product or service to the individual in some way. This may be offering a customized version of a standard item or an exclusive promotion for long-time customers. For example, payment APIs can market open banking and custom dashboards as personalized features.

Which technologies are required to manage personalized marketing campaigns?

As you might have noted in the previous steps, personalized marketing doesn’t strictly require digital technologies. That being said, smartphones enhance the performance of personalized campaigns by making it easier to collect data and deploy messaging at scale.

The data tracking capabilities of mobile devices let marketers build consumer profiles based on age, gender, location, income, and other factors that can inform your messaging. This information is then analyzed alongside metrics like conversions or click-through rates to form individualized strategies.

Data management platforms

Data management platforms (DMPs) are centralized computer systems used to collect and manage datasets from various sources. In the world of personalized marketing, they are used to import customer data, segment it into specific categories, and transmit messaging instructions to an ad network or mobile app. When a comprehensive dataset is properly segmented into relevant groupings, marketers are better equipped to deliver engaging messaging and advertisements.

Customer relationship management platforms

Customer relationship management platforms (CRMs) are highly specialized systems that analyze professional interactions with your brand. Each CRM system compiles customer records from multiple points of contact, such as email, social media messages, or website purchase histories. These data points create a customer profile that can be used to create relevant messaging, drive sales growth, and encourage customer retention.

Beacon-based platforms

Businesses can also use beacon-based platforms to market to customers in the surrounding areas. These platforms operate by communicating with smartphone chips to create a local user network. Once active, devices within the network can be sent specialized messaging by local brick-and-mortar retailers. For example, if you happen to be near a Starbucks that uses such a network, your proximity to the store will trigger personalized Starbucks advertisements that promote daily deals.

Real-Time Personalization

Real-time customer marketing is the delivery of highly personalized customer marketing messages to individual customers, at the moment of greatest relevance. When effectively executed, real-time marketing improves customer experience and generates more revenue for the company, among other benefits. Optimove’s add-on product, DynamicMail, enables marketers to embed dynamic, interactive content into emails in order to further increase the relevancy and engagement of customer emails. The content of DynamicMail-powered emails is updated in realtime, via a live database connection, at the time each recipient opens the email, ensuring the most relevant message for every customer, every time.

What are the benefits of personalized marketing?

By targeting individual customers, brands maximize engagement by providing customers with the most relevant and useful messaging. Companies that use personalized marketing see 6% higher conversions and generate 17% more revenue than companies that rely on other methods.

Personalized marketing is unique in that it offers significant benefits to both businesses and customers. Instead of convincing customers of their brand’s value, companies can adapt their promotions and services to meet individual consumer needs. Not only does its messaging directly translate into engaged customers, it mitigates the frustration of being subjected to messaging that doesn’t reflect one’s personal interests. That’s especially important when 72% of customers claim they won’t engage with marketing that isn’t personalized in some way.

What are the challenges of personalized marketing?

Personalized marketing may be powerful, but that doesn’t mean it’s simple. While the practice is certainly easier to implement in 2019 than ever before, setting up your platform and infrastructure is time-consuming and requires a heavy technological investment. Marketers also need to be familiar with one-on-one marketing platforms, DMPs, all forms of social media, and any emerging geotargeting techniques. Combined, these factors create significant time-sinks and financial costs that your marketing team will need to address.

Personalized marketing also risks creating a “filter bubble,” where customers are only exposed to variations of purchases they’ve already made. For example, if you make a major one-time purchase — let’s say a dryer — personalized algorithms might assume that you’re always in the market for dryers. This annoyance leads customers to stop engaging with branded messaging and miss out on opportunities for products they’d actually be interested in. Automated marketing campaigns need to carefully balance their personalized elements to ensure they do not unintentionally limit their customer relationships.

And that’s not even addressing what happens when personal data is mishandled, or just flat-out wrong. Shutterfly ran into a particularly embarrassing incident when it sent congratulatory pregnancy messages to women who were infertile. Now consider the PR nightmare that might unfold if a DMP or CRM sent sensitive personal information to the wrong customer or third-party, en masse. Data management platforms must always operate within enforced best practices to avoid harming customers and brands — not to mention possible legal consequences.

Personalized marketing is a cutting-edge technique, albeit one that requires special attention to detail. When implemented correctly, it is the most effective method of delivering the right advertisements to the right customers. This makes personalized marketing a valuable tool that benefits all involved parties — marketers, brands, and customers alike.

For more tips from our Nuts and Bolts series, check out “How Social Media Marketing Works In 2019”.

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