Imagine you could increase every transaction your business does by 20%. How much business value would that bring in? It’s a compelling calculation that’s even more important in times of economic uncertainty.
No doubt, the rewards of personalization can be high. However, on a daily basis it can pose significant challenges—especially when marketing teams are spread across the globe and data is splintered across multiple silos. If personalization was easy, wouldn’t everyone use it?
While a path toward improving your bottom line may not seem clear, one marketing strategy can yield impressive returns. According to a survey of marketing executives from 200 global firms, 40% of executives reported that marketing personalization efforts directly impacted sales, basket size, and profits. Moreover, studies show that personalization can also reduce customer acquisition costs by 50% and increase marketing spend efficiency by 30%. Personalization can also reduce churn, improve customer engagement, and increase cross-sell of relevant products.
Personalization Is Complex
Today’s customers have come to expect hyper-personalization based on their needs and desires—a staggering 80% are more likely to buy from brands that meet this expectation.
However, coordinating and tracking highly personalized experiences can be next to impossible. Here’s why:
- Customer data is siloed. Data lives in various sources across the organization; stitching it back together is difficult. Without connecting the dots, how can you identify interested customers? If you don’t know your customers, how can you effectively segment your audiences or send them relevant messages?
- Who individuals are and where they are in their journey isn’t transparent. It’s impossible to know exactly where each customer is on their journey, especially when you haven’t first resolved each customer’s identity into a single customer view. How can you determine where customers should go next in the funnel when the same customer is using multiple devices and identities without your knowledge?
- Messaging isn’t comprehensively tracked. Tracking how many messages customers receive from disconnected platforms is time-consuming and impractical. If you can’t track your messaging, then how do you know when you should reach out again and when you should stop?
3 Steps to Solving the Challenge of Personalization
In this article, we will take a deeper dive into each of the following steps.
- Step 1: Audience Management. Combine customer data to ensure you’re targeting the right customers at the right time with the right messaging.
- Step 2: Customer Journey Orchestration. Make sure marketing campaigns are effective at moving customers towards a conversion.
- Step 3: Multi-channel Messaging. Deliver messages across digital, social, display, email, and more to targeted audience segments.
Step 1: Audience Management, Segmentation, and Targeting
Before you can deliver personalized experiences, the first step is to understand your customers. Essentially, the purpose of audience management is to aggregate all available customer data and sift through it to find common demographics, attributes, and behaviors. Depending on the size of your organization, your parent segment might include tens of millions of users. Such an enormous dataset can be overwhelming, so where do you start? You begin by identifying your business goals.
To do that, you need to stitch together data from all of your silos to create the most complete user dataset possible.
Exploring data helps you:
- Identify key attributes of both high lifetime value customers and customers that churn.
- Better inform customer acquisition efforts by finding lookalike audiences.
- Discover common behaviors and attributes that can be grouped into smaller audience segments for activation.
Perhaps your business goal is to increase revenue. Or, maybe it’s brand awareness. Think of your goals as you explore your data, including geographic location, products, user commonalities, product purchase history, and usage patterns. Generally, you’re aiming to understand where your consumers are today and where you want them and your business to be in the future.
Example–Using Geo Location and Product Targeting to Boost Revenues
With the goal of increasing revenue, a global beverage firm wanted to know the best geo locations to focus marketing efforts. So their marketers created a report that divided its audience by country to see which locations generated the brand’s highest revenues and which had the most active users. Results showed that Japan had the most users, but their spending habits were low. In comparison, users in the U.S. and South America spent considerably more. This enabled the firm to focus marketing in locations that would generate the most revenue.
The beverage firm also had a number of product lines under various labels, ranging from small craft beers to globally recognized liquor brands. Aiming to improve revenue through savvy product targeting, the firm wanted to promote its most profitable products and engage in cross-promotion. Marketers were able to view product lines by usage, user interests, revenue, and other key metrics. Reports showed that while beer was the most popular category, whiskey generated the most revenue. Also, interest in sake was slowing. With this data, marketers were able to boost revenue by launching campaigns promoting whiskey. And they began cross-promoting sake to beer users because they knew sake and beer users shared similar interests.
Exploring your data by audience segments is another way to achieve your goals. Enriched with third-party data, these segments can help you better understand common user interests and how user behavior represents important business trends.
Step 2: Orchestrating Customer Experiences and Journeys
After you’ve explored your audiences, it’s time to design paths for your users and segments. Using customer journey orchestration, you’re solving the problem of knowing where users are in the funnel, and then designing where you want them to go next. That way, you can make sure users are receiving relevant content at every step.
Typically, customers move closer to a purchase through these stages: awareness > interest > intent > purchase > retention. Frequently, designing customer journeys and customer experiences means mapping out all the combinations of behaviors a customer may take, creating hundreds of micro-journeys that look like this: “If a user clicks this link, then send this email,” or “if a user opens this email, then send this coupon.” Such a highly detailed approach requires considerable time and effort to build on a granular level.
Segmenting Out the Journey
Customer journey orchestration provides the ability to mark critical stages in the journey to trigger messaging that helps users move from awareness to intent, and from interest towards purchase. For additional customer journey insights, machine learning such as next-best-action modeling can be used to identify the most marketing activation to deliver next and influence your users.
Customer journey orchestration helps marketers see whether their marketing efforts are working and moving customers closer towards a purchase. This enables marketers to plan the best possible journey to progress a customer towards a purchase.
Step 3: Multi-channel Messaging
Multi-channel messaging is intrinsically connected to the customer journey. During each stage of the journey, there might be a different activation. For example, in the awareness stage you might want to activate to your social channel and use lookalike modeling to reach a wider audience, while in the interest stage an email activation might work best since you’ve already collected their personally identifiable information (PII).