If you’re still sending out generic offers to your customers in 2017, something’s wrong. However, according to a recent article in The Wall Street Journal about personalization using data, “banks, including Chase, know they are sitting on a large deposit of gold—and they intend to mine it.” The same is true across every industry, particularly larger institutions with both legacy data from historical transactions. They’re trying to find ways to combine that data with real-time, behavioral data (from their website, for example) so they can use it to personalize interactions with their customers. This will improve customer experience and has been proven to increase loyalty, retention, and revenue.
Marketers have unprecedented access to data that can add value for customers today, but they’re still struggling to unite their data, to bring it all together in a way they can actually use it. All the data is there, it’s just a question of how to design a process around it. Customers are more likely to buy from a brand that understands them and their immediate needs. Personalized marketing is a way to offer products, offers, and services that cut through the noise and connect with your customer. Customers remember that personal touch, and tend to buy more and stay longer with brands that act like they know them – as they should!
5 steps to using data to personalize communications with your customers:
Keeping those 3 components outside the complexities of your marketing technologies allows you to continue to swap and change out these tools as they improve or fall behind, without losing your customer intelligence data.
Typically there are two main obstacles to forming a comprehensive view of every single customer so you can act appropriately towards each person that interacts with your business. The first is cultural – different departments with different concerns and more importantly different Key Performance Indicators (KPIs) are difficult to align around what is a company-wide, holistic effort to unite data from every department and source. The second is technological – integration with existing technologies and building on top of marketing stacks that cost a lot and are only beginning to deliver ROI is sometimes not worth the effort when measured against the current roadmap. IT departments particularly face big challenges when building a personalization solution that encompasses the whole customer journey and not just one or two channels (email and web for example). This is especially true when companies choose a ‘build it yourself’ option- costing millions in many cases. This is why cloud solutions seem to make a whole lot more sense for personalization alone.
Given the challenge and significant investment required to overcome cultural and technical barriers in most businesses, especially larger institutions, what you’ll see is that most choose to cut their losses and focus personalization efforts on a ‘per channel’ basis. This means they’ll invest in a channel focused technology – like an ESP (email service provider) for example, that’s designed to use the data available to personalize communications. Mastering these takes time, but when used well they can be very effective. There are a couple of serious drawbacks to this approach however. The first is that once you begin using a channel focused tool to form a view of the customer, it’s very difficult to transport that view of the customer over to another channel. There’s usually a border between your email service provider and your website optimization tool, for example. Even if you’ve got a pseudo-omnichannel technology in place (meaning that it serves more than one channel, as opposed to ALL channels), you’re still restricted in another way. Most of these tools do not have the data science or capacity installed in them to overcome the challenges of using ALL the data in your organization. For that you need a level of sophistication in your machine that requires artificial intelligence or machine learning – something well out of reach of the average marketing cloud solution.
So to summarise, it is possible to personalize communications to some extent using some of your data on any given channel. It is a much harder and costlier proposition to use ALL your channels and ALL your data in every single interaction with a customer. That takes time. Smart marketers are aware of this and are taking a step by step approach as they move towards more and more personalized communications.
A step by step approach:
Even the most basic personalization of video, web or email communications has been proven to increase conversions and ROI, by factors of 4X or more. It’s worth finding solutions that allow you to personalize the customer experience in the short term so you can learn about the customer and make money while you’re doing it.
Your efforts could be augmented by a more efficient way of advertising using third party DMPs/DSPs to find the right audiences for your products. If you are in a position to use data science to segment your customers more intelligently, why not use Custom or Lookalike audiences to explore new products and services? The key is to coordinate with Marketing and to use a central hub that makes the customer, your inventory and operational data available to identify and advertise to the right segments at the right time – something only a cloud solution can do at scale.
Customer insights are key to strategic planning and implementation of growth initiatives. The more accurate and actionable the insights, the more likely it is that profits will grow. Personalization is a two way street – measurement and analytics are just as important as the ability to serve a personalized message or offer. You need an ability to see what’s working and what isn’t so you can constantly improve and iterate. Acquisition, Conversion and Retention are the primary concerns of most digital marketing but the more you know your customer, the more value you can deliver. Delivering value generates happy, loyal customers and most importantly revenue and profit.
Focus on Customer Experience not only to keep the customer happy, but also because it makes financial sense to do so. Key differentiators for many brands, such as convenience and the path to purchase, are being disrupted by new players and search engines that cut into the customer journey and provide the customer with more options and better prices. Customers have more choice and higher expectations than ever before.
Andrew is a Product Marketing and Sales Enablement consultant who can help you communicate clearly with your customers, so they’re more likely to buy. Over the last 15 years he's worked with some of the best sales and marketing companies in the world (including Google, IBM, Vodafone and Altify).