Is Personalization the Right Play for Your Brand?
2015 has shaped up to be the “Year of Personalization.” As marketers, it is a topic we cannot avoid at conferences or in the boardroom. At Rise, we’ve even dedicated a recent edition of our Internet Marketing Leadership Series to personalization.
So what is all the hype about? Many of us have started down the personalization road before. Some areas, such as database marketing, have already lived up to the promise of delivering unique messaging to consumers based on robust data profiles across multiple channels. And many digital brands like Amazon have been on the forefront of personalization for some time, making massive investments in the space.
What is driving this renewed emphasis on personalization? And most importantly, does personalization make sense for your brand?
Let’s start with a common definition of the word personalization as it relates to the world of marketing. To put it simply, personalization means delivering a different message or experience to a customer based on information about that individual [tweet this]. As Mike Raffensperger, director of digital marketing and content strategy for DIRECTV, shared at our recent IMLS, this data is either probabilistic or deterministic, meaning we either think we know something about a customer, or we do.
Other terms you may hear when describing digital personalization include data management platform (DMP), which is a database that stores customer information in a way that can be shared with other media, such as a website, app, or email channel; and dynamic creative optimization (DCO), the technology used to change creative messaging based on DMP data.
If you’re an industry vet, this technology may not be new to you. So what has changed in the market that is driving such a renewed demand for personalization? And I mean aside from the 2,000 ad-tech companies all vying for your budget!
What’s new about personalization?
First and foremost, let’s talk about the customer. Consumers have evolved and so have their demands. Brands collect so much customer information that there’s an assumption the information will be used to add value to a customer’s experience [tweet this]. After all, why collect the data if you are not going to use it to your customers’ benefit? Brands have taken this a step further by beginning to add titles like chief customer officer to their employee rosters, and have even formed a Chief Customer Officer Council. The expectation of relevant and personalized brand interactions will only grow as companies continue to make additional investments in customer-focused technology and human capital.
Second, the technology necessary for incorporating personalization into digital marketing strategies is now more accessible to brands than ever before.This includes the acronym laden LUMAscape of ad technologies, some of which I defined above. Marketers now have the tools to collect information, use it to more accurately reach customers and prospects, and increase the effectiveness of their digital campaigns.
Where should you start?
It is important to recognize that personalization is not in and of itself a strategy, it is a tactic [tweet this]. And, like any marketing tactic, you’ll need to determine whether or not it will help you reach your specific marketing goals before making a large investment. Typically the goal of personalization, or even more specifically, a customer strategy, is to achieve the following:
1. Understand your best customers
2. Engage them in more relevant and personal ways, thus driving more revenue and loyalty
3. Find more prospective customers of high value to engage (look-alike targeting)
Most brands are certainly interested in all of these things!
So what else should drive your decision to incorporate personalization?
A solid understanding of your audience and their preferred interactions will help ensure your efforts are welcomed and not alienating. If you are in a regulated industry or provide personal products and services, your customers may not appreciate personalized engagement due to a heightened sensitivity to the “creepy factor.” Some extreme examples of this might be personal care products, bankruptcy, divorce, or other major financial or career decisions. Personalization may not be the right investment within these areas. However, if these concerns don’t apply, start asking the following questions of your team:
- Does the data that we have support our goals? If not, what is our strategy for building more robust customer data through first party or third party methods?
- What data privacy rules do we have to adhere to and how does personalization impact these requirements?
- What other groups within the organization are needed as partners for this effort? IT? Customer service? Product development? etc.
- What customer product/service group or customer segment is the right place to start testing personalization?
- How will we measure whether or not our personalization efforts are successful?
Once you have uncovered the value you expect to gain by using personalization as a tactic in your marketing strategy, you are ready to begin identifying the partners and infrastructure to help you deliver results.
For more about aligning personalization to your brand’s goals, partner selection, or personalization in general, don’t hesitate to contact Rise.
Additionally, check out this roadmap for incorporating it into your marketing strategy, or this gifographic with key success factors.
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