Vague statements such as “personalized marketing is the future” and “personalization is the key to marketing” abound. Yet, the most popular search phrase associated with personalized marketing is, “What is personalized marketing?”, according to StoryBase. Needless to say, it might be difficult to stay on top of the ‘key to the future’ that is personalized marketing if you don’t exactly know what it is.
The issue I’ve had with these vague generalizations of personalized marketing is that they not only confuse readers but also mislead them. The fact that most articles about personalized marketing (at least the ones I’ve read) reference Netflix or Amazon as the pinnacle of personalized marketing doesn’t help. Is it pretty cool that Amazon has the ability to basically guess what I want to buy at any given second? Absolutely. Does personalized marketing mean that you have to be able to do this? Absolutely not.
I’m not trying to knock those articles that consider personalized marketing the key to the future or that cite Amazon as a good example of it. Still, they provide a very narrow idea of what personalized marketing is and build it up as an unreachable ideal for the average marketer.
Where is Personalized Marketing Today?
According to Pardot’s article 5 Incredible Examples of Personalized Marketing:
- Businesses that personalize web experiences see an average 19% increase in sales. (MarketingProfs)
- 71% of companies fail to personalize their websites. (Dynamic Yield)
- Personalized marketing emails receive 29% higher open rates and 41% higher click-through rates. (Experian)
- 70% of companies don’t personalize marketing emails. (Experian)
Additionally, Dynamic Yield reported the following findings:
- 94% of in-house marketers agree that website personalization is critical to current and future success. (Econsultancy)
- 74% of online consumers get frustrated with websites when content (e.g., offers, ads, promotions, etc.) appears that has nothing to do with their interests. (Gartner)
- 72% of companies say they don’t understand how to carry out website personalization. Common barriers are a lack of technology or inability to translate data into action. (Econsultancy)
So what does that tell us, that in 1999 Harvard Business Review claimed that ‘too many companies have jumped on the one-to-one bandwagon’ (as addressed below) but recent research shows that 71% of companies fail to even personalize their websites and 72% of companies don’t understand how to carry out website personalization. Does this mean that people are trending backward and have stopped their personalized marketing efforts? My guess is no. It’s a lot more likely that the definition is changing over time as are the accepted and available tools.
Once again, something in marketing is changing rapidly. No surprise here. But, if you read on, you’ll see that the basic tenants of personalized marketing should remain the same–and that these tenants can be applied to marketing efforts in different–and personalized–ways.
So, What is Personalized Marketing, Really?
In my research, I found it very hard to find an actual definition of personalized marketing. Most articles referred to it in abstract terms and contextualized these terms with tactics or examples of big name brands using personalized marketing. While it might be interesting to look at personalized marketing efforts of Netflix, the majority of marketers out there likely don’t have the resources or business model that Netflix has.
So, what does personalized marketing mean to you? Check out the definitions I gathered below to answer that question.
“Personalized marketing (also called personalization, and sometimes called one-to-one marketing) is an extreme form of database marketing. Whereas product differentiation tries to differentiate a product from competing ones, personalization tries to make a unique product offering for each customer.” Source: Wikipedia
“The idea is simple: one-to-one marketing (also called relationship marketing or customer-relationship management) means being willing and able to change your behavior toward an individual customer based on what the customer tells you and what else you know about that customer.” Source: Harvard Business Review, 1999
PS — even in 1999, Harvard was saying: “Unfortunately, too many companies have jumped on the one-to-one bandwagon without proper preparation.”
“Personalized marketing refers to targeting a product or service to an individual customer. It can be achieved only by collecting data and information about a particular customer, or small group of customers, and then creating products and/or advertisements of special interest to that individual…Personalized marketing is the most extreme form of target marketing. Instead of creating a product designed to appeal to many people or to the whole population, the target market is one specific customer. Some forms of personalized marketing will appear to a slightly wider audience than just one person, but the market segment is still very small.” Source: Wise Geek
Ultimately, each of these can be boiled all down to is 2 key pieces:
- Data-driven audience knowledge
- Personalized communications with audience
Put these together and you get data-driven personalized communication with your audience. Somehow, that definition seems a little less daunting. That’s something you can manage, right? And it’s also something you are likely practicing already.
Owning Data-Driven Personalized Communications in Your Marketing Efforts
We’re constantly being told that our marketing efforts aren’t enough, so it’s easy to feel like your need to be everywhere and do everything. This isn’t true. In a world of information overload, you simply need to be in the right place, at the right time, for the right person.
In comparison, being everywhere might sound a little easier–and it is. Strategically, the legwork involved in personalizing your marketing is difficult and time-consuming. But, it pays off significantly in terms of results. It also leads to leaner marketing campaigns and more targeted goals. Ultimately, it will hopefully mean less unnecessary, inefficient work and more alignment throughout your marketing team.
Depending on the resources available to your marketing team, there are many ways that you can incorporate personalized marketing into your efforts. Starting with low investment beginning steps, such as analytics and data segmentation, persona creation, and social listening will give you a clear picture of who your audience is, what they care about, and how to reach them. On the other hand, high investment options—which include more technology implementation—can revolutionize your entire marketing program to reach audiences more effectively and more personally.
Low investment beginning steps:
- Analytics & Data Segmenting
- Persona Creation
- Social Listening
High investment technology and implementation:
“Identify: In this stage the major concern is to get to know the customers of a company, to collect reliable data about their preferences and how their needs can best be satisfied.
Differentiate: To get to distinguish the customers in terms of their lifetime value to the company, to know them by their priorities in terms of their needs and segment them into more restricted groups.
Interact: In this phase it is needed to know by which communication channel and by what means contact with the client is best made. It is necessary to get the customer’s attention by engaging with him in ways that are known as being the ones that he enjoys the most.
Customize: It is needed to personalize the product or service to the customer individually. The knowledge that a company has about a customer needs to be put into practice and the information held has to be taken into account in order to be able to give the client exactly what he wants.”
This framework comes from a 1999 article from the Harvard Business Review—the same one quoted above. I’m not referencing this because I’m too lazy to find an updated article (there are plenty), I’m referencing this because it demonstrates that the core concepts of personalized marketing have not changed. Regardless of your access to resources, if you utilize data to make informed decisions about the way you communicate with your audience segments, you’re on your well on your way to full-fledged personalized marketing.
If nothing else, take this away: you don’t have to be Amazon or Netflix to stay ahead of the personalized marketing curve.
Did you like this post? Let us know why (or why not) in the comments. In the meantime, check out our blog Who Really Controls Your Marketing? to find out what elements in the modern marketing industry are making it so hard for you to succeed.