One thing has become abundantly clear in the last year of hyper-awareness and media attention about artificial intelligence. Personalization is no longer a "nice to have" marketing strategy. It's a necessity. Today's consumers demand brand interactions that fit their habits, needs, and desires. So, personalization is essential for brands that want to stay relevant and competitive.
Personalization is more than addressing your customer by name in an email. It involves tailoring marketing messages, products, and services to meet individual customers' unique needs and preferences. And it's become much easier for brands to deliver.
In the Next in Personalization 2021 Report, McKinsey says 71% of consumers expect companies to deliver personalized interactions. And 76% get "frustrated" when it doesn't happen. The report also found that companies grow faster when they drive more revenue through personalization than competitors. These companies see personalization as a chance to boost customer lifetime value through customer engagement and data-driven insights.
This post will review the distinct benefits of personalization in marketing and then look at some strategies our marketing strategy team recommends to our clients.
Benefits of Personalization
Whether through customized content, product recommendations, or tailored promotions, personalization enables your brand to forge deeper connections with your audience and drive meaningful engagement.
Enhanced Customer Experience
Everyone wants to feel seen and heard. Personalized marketing campaigns show customers that you understand their needs and preferences. By delivering relevant content and offers, you create a seamless and enjoyable experience for your audience. This positive experience fosters stronger relationships and brand loyalty.
Improved Engagement and Conversion Rates
Customers who feel seen and heard are more likely to respond positively to relevant offers, leading to higher engagement and conversion rates. McKinsey reports that conversion rates can increase between 10 and 15%. Twilio’s State of Personalization report says that 60% of consumers will likely become repeat buyers following personalized experiences.
Increased Customer Satisfaction
The McKinsey study reported that a positive customer experience increases customer satisfaction by 20%. Customers feel valued and appreciated by the brand when they receive personalized recommendations or communications. This positive interaction encourages repeat purchases, driving long-term profitability and sustainability.
Deeper Competitive Advantage
By offering tailored experiences that resonate with consumers, you gain a distinct competitive edge. It sets you apart and boosts customer loyalty. The data suggests that even small changes in your personalization strategy can create a significant competitive advantage that grows exponentially over time.
Increased Brand Trust
Personalization shows your commitment to understanding and meeting your customers' needs. This builds trust and credibility. It fosters a positive brand perception and encourages advocacy and word-of-mouth referrals. McKinsey found that 78% of consumers are more likely to recommend brands to friends and family when the brands personalize their messaging.
Enhanced Customer Insights
Personalization drives better business decisions. It provides valuable insights into what customers like, do, and need. By analyzing customer data gathered through targeted marketing campaigns, you can make informed decisions across your business, including product development, customer service, and sales. These insights can even inform operational decisions such as recruitment, hiring, or acquisitions.
Personalization is critical to the short-term success of every marketing campaign. It can also contribute to the long-term sustainability of your brand. With an investment in the resources needed to collect and use data, you can reap the rewards of a personalized marketing strategy. Now, let's review the personalization tactics our marketing strategy team recommends to clients.
Personalization Strategies
Personalization in marketing requires a strategic approach. The goal is to deliver valuable and relevant brand content at the right time and through the best channels. This will help you forge deeper connections with your audience.
Personalization has helped keep email marketing a cornerstone of many brand digital marketing strategies. By segmenting lists and personalizing email content to the specific interests, preferences, and behaviors of individual recipients, you can significantly enhance the effectiveness of your email campaigns.
List Segmentation
Segmentation involves dividing your subscriber list into targeted lists based on specific criteria such as demographics, actions, or preferences. Segmentation allows you to send more relevant emails to different groups of customers. It can improve engagement and conversion rates.
Behavioral segmentation categorizes customers based on past interactions with your brand, such as buying history, website activity, email engagement, or response to previous campaigns.
Lifecycle stage segmentation organizes subscribers based on where they are in their customer journey. This includes new leads, MQLs, SQLs, active customers, and lapsed customers.
Brands also segment customers by lifestyle, personality, values, interests, or attitudes. You could also use subscribers’ self-indicated communication frequency or content preferences.
Personalized Content
83% of consumers prefer to receive hyper-personalized marketing messages. Customized email content speaks to individual recipients' interests, preferences, and behaviors. While consumers expect personalized subject lines, customization can and should include body text, images, product recommendations, and calls to action (CTA). You do this through segmented content using a targeted email list or dynamic content.
Dynamic content allows you to display different content within the same email based on specific criteria. For example, you may include personalized product recommendations driven by the recipient's past purchases or browsing activity. You can also include customized offers based on the recipient's preferences, history, or lifecycle stage. Brands that include dynamic content in their marketing emails report a 22% increase in ROI compared to brands that never or rarely use it.
By using data insights to deliver targeted messaging, every personalized email campaign will deliver higher engagement, conversion rates, and customer satisfaction.
Display Advertising
Personalized display ads are ten times more effective at generating clicks. This is because viewers pay more attention to ads that match their interests. Personalization in digital display ads involves tailoring ad content and targeting parameters to match individual users' interests, actions, and preferences.
Targeting
Parameters include demographics, psychographics (interests, values, lifestyle), and behaviors. This targeting ensures that ads are shown to users who are most likely interested in the products or services the ads promote.
Retargeting
Retargeting involves showing ads to consumers who have already visited your website. These ads are personalized by their activities on your site, such as products viewed, items added to a cart, or visited pages. Retargeting ads remind users to return to your site and continue their journey.
Dynamic Product Ads
Dynamic ads allow for real-time customization of ad content based on viewer data. For example, a user who has viewed a certain product can receive dynamically populated display ads with information about that product. This level of personalization increases relevance and engagement. Customers see ads for products they are already interested in.
Contextual Targeting
Contextual targeting involves displaying ads on websites relevant to the ad content or the viewer's interests. For example, an outdoor apparel brand may display ads on websites related to hiking or camping. Contextual targeting ensures that ads are delivered in environments most likely to resonate with the target audience.
Smart Website Content
Customizing website content based on visitors' behavior and demographics enhances user experience and encourages exploration. It showcases products they've seen before. It updates content based on their interests or demographics. Personalized web content drives engagement and conversion.
For example, dynamic content enables you to display a customized version of a landing page based on user attributes. You can also create custom landing pages tailored to specific marketing campaigns, including relevant offers and CTAs. Personalized CTAs convert 202% better than default CTAs. Aligning landing page content with what's important to the viewer increases engagement and conversion rates.
Implementing behavioral triggers delivers targeted messaging or offers based on user behavior on your website. For example, you can set up a pop-up message offering a discount when users add an item to their cart or exit your site without making a purchase. Behavioral triggers help you engage website visitors to drive desired actions at critical moments.
Connected TV Ads
In 2023, 88% of U.S. households owned at least one internet-connected TV (CTV). More than 110 million Gen Z and Millennials watch CTV. CTV offers advertising opportunities previously out of reach for many marketers due to the cost and lack of targeting in traditional broadcast ads. It enables advertisers to deliver personalized content based on customer viewing habits and demographics.
Targeting
Brands use CTV ads to target specific households or individuals based on demographics, interests, purchases, or viewing behavior. Brands can use first-party data, third-party data, or platform data to target ads. This ensures that ads are shown to the most relevant audience segments. Nearly six out of 10 CTV users in the United States think CTV ads are more relevant than ads on traditional television channels.
Dynamic Ad Content
Dynamic Ad Insertion (DAI) allows advertisers to insert personalized ads into live or on-demand streaming content in real time. You can customize the ad creative, messaging, and CTAs based on viewer attributes or environmental factors such as time of day, location, or even weather conditions.
Contextual Content
CTV ads can be targeted based on the context in which they are being viewed, like the genre of the content, the type of device being used, or the customer’s viewing environment. Advertisers curate the creative and messaging to align with the viewing experience, ensuring that ads feel native and relevant to the viewer.
Retargeting
Like digital display ads, you can use CTV ads to retarget viewers who have previously interacted with your website. Based on their past actions on your site, you can serve personalized ads to these viewers. Sequential messaging even allows you to deliver a series of messages that tell a cohesive brand story or guide viewers through their customer journey.
Interactive Engagement
Personalization in CTV ads can extend beyond targeting and customization to include interactive elements that allow viewers to engage with your content. For example, viewers may be prompted to click on hotspots, swipe to explore extra content, or complete in-ad surveys or quizzes. Interactive ads enhance viewer engagement and provide valuable data insights about your customers.
By delivering highly relevant and timely messages to the right audience, connected TV ads can drive deep customer engagement and brand affinity.
Personalization is Here to Stay
Personalization isn’t just a trend. It's a must if you want your business to thrive in today's competitive marketplace. This article focused on personalization in marketing. However, McKinsey's study reports that smart leaders use customization in every part of their company. Rather than seeing personalization as a marketing tactic, they view it as an organization-wide opportunity to drive company growth.
The marketing team at Phase 3 can help you embrace the power of personalization and unlock new opportunities to connect with your audience in meaningful ways. Contact us today to schedule a discovery call.