What is Personalized Marketing?

/ 28 September 2022

The Strategy, Examples, and Benefits of Personalized Marketing

Personalized marketing is one of the biggest trends when it comes to customer acquisition and retention. But if you’re not already on the bandwagon, it can seem like a tricky one to get started with.

To make things easier, we’ve put together a guide including personalized marketing benefits, strategy advice, and some real-world examples. But first…

What is personalized marketing?

We know that “marketing” is the act of promoting or selling your products or services. And that “personalized” means that something is tailored to a person’s requirements. Put the two together, and you get a reasonable definition of personalized marketing – promoting or selling based on a person’s requirements.

More specifically, it’s the use of customer data to target marketing and communications. That can be broad things like age, location and gender, or more particular details like someone’s previous orders, interests or product preferences. Most importantly, it has a number of benefits…

Personalized Marketing Benefits

A Better Experience

Tailored marketing means a tailored experience. Customers are shown the products that are most relevant to them, which improves their experience with your brand. Imagine walking into a food store with all your favorites just lined up and waiting to be enjoyed.

Most importantly, that’s an experience modern consumers have come to expect. A whopping 42% of respondents in our 2022 Consumer Survey Report said they would be less inclined to shop with a brand that doesn’t tailor communications, while 52% said they were frustrated by communications that aren’t relevant to them

More Data

If personalized marketing is there for all to see, it can actually increase the amount of data customers are willing to share. According to our survey, 54% of people are happy to exchange their data for tailored offers and promotions, while 51% will do so for beneficial product and service recommendations.

In what’s essentially a continuous cycle, that data can then be used to improve personalization – in turn, attracting more data. You get the idea!

Increased Loyalty

More data, better personalization and a good user experience all adds up to customers that stick around. Don’t believe us? According to PwC 32% of customers have walked away from brands due to a bad experience, while McKinsey reports that 71% of consumers have come to expect personalized interactions – with 76% getting frustrated if that’s not the case.

In other words, most customers won’t be happy without personalized marketing – and a significant number of them will walk away as a result.

Higher Revenue!

Here’s the one most decision makers will be interested in – personalization will ultimately lead to higher revenue. According to McKinsey, it typically drives an increase of 10-15%, though that can rise to 25% depending on the sector and quality of your personalized marketing strategy.

Creating a Strategy

That’s the “why” covered; now onto the “how”. There are two key elements to any personalized marketing strategy – collection and utilization…

1.    How to Collect Data

There’s no two ways about it – personalization relies on data. As such, your business needs to start by collecting some of that sought-after information from your customers. The most important aspect here is transparency, which can truly make or break for your strategy.

Why? It’s simple. Imagine getting an email about skinny fit jeans because you told a trusted brand about your style preference. Nice, that’s helpful. Now imagine getting the same email but not knowing how they got that information. Less nice, more suspicious.

The first example is what happens when you use third-party cookies, which track users’ activity across the web after they’ve left your site. The alternative is collecting data yourself through surveys, activity tracking, and/or a dedicated customer engagement platform.

The key difference is trust. Sure, both might provide the same information. But by sacrificing trust, you could actually defeat the purpose and eliminate the personalized marketing benefits like customer experience and improved loyalty. Don’t forget that 84% of consumers prefer brands to be open and transparent about data collection!

2.    How to Use the Data

Next up in your personalized marketing strategy is how you utilize the data you collect.

Here are some popular forms of personalized marketing…

  • Emails – Sending customers updates about products or services they’re interested in is one of the simplest personalized marketing examples. That could be special offers, new products or even exclusive discounts.
  • On-site recommendations – You can also recommend products on-site based on each user’s data. A popular example are products they’ve previously viewed and not bought.
  • Retargeting – A similar approach can be used after users have left your site too. Ads on social media, for example, can be personalized based on products people browsed or just products you think they’ll be interested in.

A Personalized Marketing Example from the Tourism Sector

Sometimes it’s easier to see things in practice. That’s where our personalized marketing example can help. We worked with VisitScotland to create an interactive Scottish trivia quiz embedded on their site. The engaging, responsive quiz generated a profile based on their answers, such as ‘City Breakers’ or ‘Scottish Nature Lovers’.

As well as being a fun takeaway for users, this provided a wealth of preference information for personalized email marketing as a follow-up. VisitScotland were able to send travel itineraries tailored to each segment of their audience. They also found that ‘Outdoor Adventure’ and ‘History and Culture’ were the two main reasons given for planning a visit, giving them the opportunity to enjoy more personalized marketing benefits in the future.

Build a Personalized Marketing Strategy for Your Brand

If you want to improve loyalty and boost revenue through personalized marketing, 3radical’s customer engagement solutions can help. Our expert team can make sure you collect the right data and utilize it in the most effective way with a strategy that’s tailored to your brand, goals and customers.

To find out more, don’t hesitate to contact our team today.

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