Personalised marketing: The wrongs, the rights and the recommendations
Personalised marketing has evolved rapidly in recent years.
Initially, personalisation communications took the form of a stock email with a category field that could be tailored to the customer’s name – ‘Dear Bob’ certainly being an improvement on ‘Dear Valued Customer’.
But this has, of course, become commonplace, and a recent survey about marketing messages conducted by Lyris revealed that 63% of consumers report that they now receive so many messages that use their name that it no longer has any impact.
However, companies have subsequently been able to personalise communications based on customer behaviour, with examples being basket abandonment emails and browse abandonment emails and recommendations based on previous purchases.
And more recently, brands have been using the likes of social mining to be able to deliver personalised content recommendations. And advances in technologies such as NFC, Bluetooth and RFID, now enable brands to personalise communications by location and address them where they are. For example, if a customer has a recent and consistent history of purchasing baby products and is in the store, they can be used to alert the customer to the availability of a new nappy rash cream or an offer on a bottle warmer.
The right message, the right time
Unsurprisingly, with personalised messaging increasingly becoming the norm, customers have come to expect nothing less.
“In today’s always on, always connected multichannel environment consumers are no longer willing to accept generic messages and offers – therefore, personalisation is a necessity,” emphasises Katharine Hulls, VP of marketing at Celebrus Technologies. “Consumers know that organisations have the data and the technology available to be far more personalised in communications, and expect brands to use those resources to achieve a sophisticated level of personalisation.”
Steve Shaw, head of digital at Branded3, adds: “Personalised marketing actively responds to the customer’s needs. This process matches the old marketing phrase “the right message, to the right person, at the right time”. If you can do this on an individual basis rather than mass market you can really see the value – and personalised marketing offers exactly this. Personalisation helps to reduce the noise around your marketing message and requires that message to evolve and change based on customer interactions and intent. Achieving this is becoming an increasing requirement in digital marketing, using personalisation to create a focussed marketing message and call to action is what makes it a highly effective experience.”
Certainly this kind of focus is highly valued by customers, who can be overwhelmed by the volume of content, products and services that they are bombarded with. Personalisation – and in particular predictive messages - can help time-poor customers to negotiate this increasingly noisy world, and provide a genuinely useful service.
But personalised marketing is also highly effective for the business too. 74% of marketers report that personalisation increases customer engagement, according to Econsultancy research. This also translates into improving conversions – the likes of BMW, DFS and Co-Operative Travel have all reported significant increases in conversions as a direct result of implementing personalisation, whether via email, MMS messages or on-site advertising.
What’s more, personalisation also drives recurring conversions by improving customer retention – a study of digital marketers by ExactTarget and Forrester revealed that 84% report personalisation directly impacts customer retention and loyalty, while Econsultancy research has demonstrated that post-purchase loyalty programmes containing personalised offers are one of the most important factors in driving repeat purchase.
Yet while marketers see value in marketing personalisation, research indicates that they face a number of challenges.
“In a multichannel world with consumers moving across devices to make purchases, keeping track of data in real time is challenging,” says Sandra McDill, managing partner at iProspect. “Mistakes often happen when assumptions are made based on data that is incorrect or incomplete leading to a bad personalisation experiences. Born out of the Big Data Boom, personalisation relies on data and technology working together, but still requires marketing managers to sense check that the personalisation reflects the brand and consumers they are trying to message.”
Bruno Berthezene, UK country manager at Solocal Group UK, adds: “It might sound like quite an obvious thing, but it is important to ensure you have an accurate database in place, which is updated and monitored closely to avoid formatting errors and spelling mistakes throughout the targeted marketing collateral. Bad personalisation can be as ineffective, or even counterproductive, as no personalisation at all – there is nothing more likely to lower a customer opinion of a business than a misspelt first name!
“In addition, businesses should be mindful of how they use their customers’ data when communicating with them. Personalisation is a highly effective tool in building the level of customer engagement, however if you are too intrusive you run the risk of invading a person’s privacy and this will have a damaging impact.”
And brands can sometimes also be the architect of their own downfall when it comes to personalisation.
“One of the biggest mistakes in personalisation is creating a ‘personalisation dead end’,” warns Shaw. “This is where personalisation rules are put in place that can leave a customer with a single, unwanted option. An extreme example of this would be visiting an online music store buying a single CD and then being presented with only music from that artist and no others. In any personalisation strategy there should always be the ability for a customer to become interested in other items or explore your wider catalogue of products or services.
He continues: “Another mistake in personalisation campaigns is demanding customer interaction or data entry which is subsequently not used elsewhere in the personalisation process. An example of this is visiting the same online music store as above and requesting a customer’s favourite artist only to be shown a list of the new products in stock on the next page. Being able to give a customer gratification and acknowledgement of their effort will drive higher engagement.”
Getting it right
So how can brands get personalised marketing right?
There are four key areas that need to be addressed:
- Audience. “Know your audience,” advises Shaw. “Start initial personalisation by using segmentation. Groups within your audience can help to target your message from the start. This can be as simple as segmenting by where your customer is on the acquisition, conversion or retention journey.” “Customer insight is at the heart of a personalised approach,” adds Ian Stockley, MD of Indicia. “Insight needs to be garnered not just online, but across all customer touch points to ensure a brand has a holistic view of each individual. As well as listening to customers to understand what they like, what is ignored is just as important. For example, if there are products which consumers are failing to click on in an email newsletter, this is crucial information to tailor the next interaction. Only once you understand each individual’s preference is it possible to create personalised interactions. For example, when sending out email marketing, in-depth customer insight allows marketers to tailor each email to different customers to ensure the optimum engagement and conversion rates; in essence, putting the right product in front of the right customer.”
- Intent. “The key to implementing and delivering personalisation is allowing a customer to reveal their intent. Once they have done this, you can then act on that information,” says Shaw. “Understanding the intent of your customers will make the process of marketing to them simpler. Your strategic approach should involve ways to allow the customer to reveal their intent so that you can act accordingly.”
- Relevancy. “Show why the message you are presenting is relevant to your customers,” advises Shaw. “In the digital channel, use this information immediately to present the updated journey back to the customer.”
- Trust. “If your marketing messages instil trust, then your customers are more likely to give you information about them that can be used to personalise their experience,” notes Shaw. James Burr, head of presales and consulting, for cross channel marketing at Experian, adds: “The buying purchase cycle is now extremely complex with buying decisions normally completed within a few days. Consumers prepare for a purchase by gathering information online and offline; they visit High Street stores and online shops, compare prices and discuss products with their peers. Personalisation of a communication between the brand and the consumer puts the brand in a position of trust and includes them in the preparation before a purchase. Any response or recognition of the decision-making process that a customer is going through enhances the position of the brand, which is only possible through personalised marketing.
And Neil Capel, founder and CEO of Sailthru, shares the following three tips.
- Understand your data blueprint. Where does data from your individual channels come from and what is the process for bringing it all together? Understanding who owns it, where it lives, and how it is structured are really important points. If you use an external provider, you need to understand how you can access the information required. Get a handle on your data and know what you are getting from it. What you’ll find in the marketplace today is that there are innovative technologies that have are much more advanced than the legacy systems running relational databases known for rules-based segmentation.
- Personalise on explicit and implicit data. The only way to get a true 360-degree view of your customer, which is more than just their clicks, is through analysing explicit and implicit data. Explicit data is the quantitative, whereas implicit data is qualitative. This combination allows you to build contextual customer profiles that increase the relevancy of the personalised product and content recommendations you need to provide today.
- Test, test and test again. What helps an organisation evolve personalisation to the next level is making sure it is deploying the right type of tests and personalisation. For omnichannel success, testing should be a constant process in order to understand how your unique customers respond to communications across all channels. The value for the customer is the connected experience. The value for the brand is the connected data.
And this advice could prove particularly useful, as getting personalisation right is becoming increasingly imperative for competition-conscious businesses.
“The emergence of the internet and social media means customers are more equipped to discover, compare and evaluate brands at speed. As a result, marketing needs to become more customer-centric to deliver ROI and personalisation is essential to this approach,” warns Stockley.
“With so many brands jostling to get their message heard, personalisation helps marketers achieve cut-through with more relevant and timely content that generates a meaningful brand interaction. Consumers choose the brands they want to engage with on their terms and personalisation can help secure this interaction. Not only does personalisation benefit the brand, but it also benefits the consumer too, by meeting their wants and needs.”
Furthermore, with customer expectations continuing to rise, what constitutes ‘personalised’ marketing continues to evolve – and this means that brands must keep up.
Capel concludes: “The most common mistake that many companies make is basing personalisation on name, geography or gender alone. This basic, simplistic approach is what was seen a decade ago and companies that maintain this approach are not taking that next step and leveraging all of the data they have at their fingertips. Although it can be seen as a good base – in reality it falls short of really knowing your customer.”
This is the reality brands find themselves facing in the modern business world – and the challenge that they must ultimately respond to.
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Neil Davey is the managing editor of MyCustomer. An experienced business journalist and editor, Neil has worked on a variety of newspapers, magazines and websites over the past 15 years, including Internet Works, CXO magazine and Business Management. He joined Sift Media in 2007.