The essentials of personalization as a fundamental strategy

februar 2020 Marie Dietzer Jacobsen

The considerable and drastic change and evolution of the marketplace and its contexts, driven primarily, but not exclusively, by the digital era, have generated significant pressures over companies coping with maintaining and achieving unique competitive advantages. One of the main consequences is that nowadays customers are more empowered than ever, and they grew more demanding and difficult to please, especially in terms of relevance of the marketing and communications contents they are exposed to. Many companies have focused their efforts on retargeting in order to keep up and adjust to a such a volatile market context, however, those efforts end up to be perceived as highly intrusive, whether not annoying, to their customers. The relevance issue is one of the main concerns a company should consider, especially in an era where customers are constantly bombarded by messages, spending most of their time navigating tons of information that are neither useful nor meaningful to them, before accessing something which is truly appropriate and on-target. Furthermore, as data and insights become more and more readily available, easier to gather and analyze, companies started moving from a broad-based strategic point of view from a more structured and pragmatic modelling, especially by adopting a more customer-centric approach.

However, accessing and focusing on data through data-driven marketing processes alongside with customer-centric imperatives, the relevance of messages, communications, offers and overall interactions with your customers might still be a dramatic issue to cope with. In order to provide a unique and high-quality customer experience, throughout your customers’ journeys, constantly delivering value from an omnichannel perspective, transforming your company in a superior customer-centric organization, a step further is required. To be fully relevant, conveying valuable information and messages, all your communication efforts need to be tailored to your customers’ needs and expectations, instantaneously shaping your consumers’ experiences with your company. This polarization towards tailoring such relevant and timely messages, based on information about past and present interactions with your customers and their attitudes during those interactions, will lead your company to an incisively effective and efficient content creation, management, and distribution. Ultimately, such a strategic approach would increase your customer loyalty, engagement, and it will improve your overall performance based on embracing a mandatory task: personalization.

Personalization essence

The key to personalization is to provide tailored solutions, these being messages, contents, offerings, or customer support. Personalized marketing efforts are entirely focused on responding to customers’ needs and expectations, in a way that is both time sensitive and relevant for them, tapping exactly on what they most want, embracing them within your organization and nurturing and delivering a high-quality, genuine, and individual experience for them. By providing messages that are adjusted to your customers, personalization will also support your business in anticipating your audience attitudes and future needs. Therefore, personalization is demonstrated to address the relevance issue based on highly refined and targeted communications, which ensure your company with long-lasting customer engagement and loyalty. Moreover, personalization can reduce acquisition costs, while increasing the ROI on marketing spends, boosting sales and revenues growth.

Hence, the main imperative when considering opting for a personalization strategy is to create ad-hoc messages and experiences, which provide a considerable degree of value to your customers. To determine which messages are valuable, and consequently more efficient and relevant for them, is it necessary to take on the customer’s perspective. Customers perceive value as a function of how timely and relevant a message is related to the amount of personal information they are needed to share, boosted by the trust they place over brands. The higher the value of marketing and communications at their eyes, the more personalized those efforts result to be for your customers.

In order to develop a successful personalization, every marketing effort needs to be modeled on your customers’ attitudes, beliefs, needs and wants. Such an achievement entails a few basic organizational processes and operations. Above all, using attitudinal segmentation, to act on a customer’s attitudes, and constantly test out and adjust messages based on your customers’ feedback, are the first processes that a company considering personalization has to implement. However, these operational expedients might not be sufficient, especially in the long run, considering personalization at scale, and in terms of building up a sustainable and unique competitive advantage.

Recommendations to achieve a successful personalization

When it comes to personalization techniques, which might also lead your company to a personalization at scale, four main recommendations have to be taken into account:

1) Use data and insights to let value emerge
At the heart of personalization lies data’s considerable potential in understanding fully and in depth what your customers really want, what they consider as valuable, and which are their attitudes towards your existing marketing and communication efforts. The first mandatory step is to group your customers and to identify a profitable segment, and accessing all significant insights concerning their experiences. Secondly, an extensive analysis of your customer journey has to be integrated with the information about the most representative segment. This technique will form the foundation of one-to-one personalization.

2) Plan in advance and react rapidly
Another crucial characteristic of personalization is that your company should be in a constant dialogue with your customers. They provide information about their needs and expectations, they signal their attitudes, through purchases, inquiries, online browsing etc. Your company needs in turn to respond those signals, providing timely and relevant messages that are delivered to the individual customer. In order to progress in this dialogue, planning and matching dynamically messages according to the situation are crucial. Hence, your organization is required to develop a test-and-learn mindset.

3) Establish a cross-functional empowered team
In order to cope with all the tasks and issues that have to be managed in a time-sensitive span, your organization will need a specific group of empowered skill holders, which main job is to drive results concerning customer experience, customer journey and ultimately personalization performances. They will search and adapt the marketing efforts to the most profitable customers’ signal, developing higher potential values, and developing personalized messages, while embracing a constant iterative process.

4) Focus on technology and infrastructure
To ultimately and successfully achieve personalization at scale, within a fast-changing context and marketplace, agile and dynamic processes are a crucial operational imperative. In the digital era, where your customers are constantly growing more and more demanding, personalization grants your company with near-infinite variations and possibilities to respond to their needs and expectations. However, this approach requires a constant focus on technology and consequential adjustment to your organization’s infrastructure, which must co-evolve with the context it works within. Firstly, teams need to be sufficiently informed and empowered to roll out activities and process decision-making at a fast pace, iterating success actions and learning from eventual mistakes. The second must-have to achieve such results is a solid automation process and technology, in order to support and foster change reducing risks.

Summarizing, personalization provides undeniable advantages and benefits, although it has to be implemented considering potential challenges to your organization. Relying on data insights, planning and being responsive to your customers changing needs, establishing dedicated teams configured within a flexible infrastructure would provide the right setting in nurturing personalization. However, in the long run and considering scaling personalization your organization will irrevocably need a proven and solid automation system. It will require the tools and capabilities to execute operations and to deliver valuable personalized content to your customers across channels. The next issue will cast light on the profitable solution and technology to this challenge: marketing automation.