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Personalization in online marketing – communication of the future or overestimated hype?

Our own news feed on Facebook, the matching search results on Google, music recommendations from Spotify – we are all used to content on the web being tailored to our wishes and interests.

And maybe you’ve already thought about customizing your service and communication to each customer’s interests and needs – instead of displaying the same information and offers to everyone. Users seem to expect tailor-made and therefore personalised information. Among online marketing experts, personalization is not new, but still a central topic. In today’s blog post we will therefore take a closer look at whether this is a temporary hype or whether it is worth it for you to personalise your website and customer communication.

A definition of terms

Man holding a coffe cup a speaks about Personalization in online marketing

First, however, we would like to take a look at what personalization means in concrete terms. Personalization is a means of meeting the customer’s needs more effectively and efficiently, making interactions faster and easier and, consequently, increasing customer satisfaction and the likelihood of repeat visits.[1] As you will read, it is much more than just the content of a website.

A prerequisite for being able to offer personalized content is therefore the collection and evaluation of information. At first, this sounds cost-intensive and like a lot of work. Often, however, it does not take too much effort to adapt a product to the customer. Think of the movie recommendations at Netflix, which are based on your previous movie history, the last newsletter in which you were addressed with your name or your last Starbucks coffee, on the cup of which your first name was probably written. And even without collected data, personalization is possible. Companies like Nutella have shown the way by printing first names on the labels to add a personal touch.

Do you have to collect data at all?

Sign about data and personalization

The more specific you adapt the content to your website visitors and customers, the more important will the information about them become. You receive this information in the form of data. With this data you can better understand the behaviour, wishes and needs of your customers, respond to them and offer products and services accordingly. Every time you visit your website, your visitors leave traces. These traces in the form of data reveal a lot about the preferences and the respective behaviour of the interested parties and customers. Your task now is to use this data. If you recognize different customer types behind the data, you can play out personalized content. Maybe you are dealing with a bargain hunter, then you can reach him even better by stronger price communication. Or the visitor is very trend-conscious and wants to be informed specifically about new products and trends. In order to adapt your website to the respective needs of your visitors, you must collect the appropriate data, evaluate it and then use it correctly and specifically. Once you have first determined the goal with which you want to use personalization in your company, you can consider where this should take place. If you want to address your customers by name in the newsletter, you need less data than if you want to create different landing pages for each target group. Once you have made this decision, you can see which data is relevant for your project and how you need to evaluate it. If you proceed systematically, you can make the processes from product development to marketing and sales more efficient.

Why personalization works

Excellent.org tells why personalization works

Data can help you personalize your messages and tailor them to your customers. In order to understand why this is so important at all, a look into the human psyche helps. What does an advertising message tailored to us and our needs do? Clearly, we feel valued and normally automatically sympathize with our counterpart – in this case you as a company. Because we prefer people to receive information on topics that we know about, personalized messages convey a sense of security – which in turn has a positive influence on the purchase decision. In addition, relevant news is automatically more interesting for us and is preferred in all the information overload. But how do we even know what information is important to us? The part of the brain called the reticular activation system (RAS) is responsible for this. The RAS determines which information penetrates to us. It is like a filter and navigates us through the information like an autopilot. It decides what is relevant for us and what is not. And here the following applies: familiar things and what concerns us personally is relevant. So our preferences are firmly anchored in our minds. It strikes us positively when we are addressed personally and directly. And it is precisely on this information that we concentrate.

What can you do concretely?

charts symbolize data about personalization

So far so good, but how can you now proceed concretely? The magic word here is segmentation, which means as much as “to divide the marketplace into parts, or segments, which are definable, accessible, actionable, and profitable and have a growth potential.”[2] There are unlimited possibilities to divide your customers. In the following we would like to present a few examples:

  • Segmentation by marketing channel

Actually, this is obvious – depending on which channel you use to communicate your message, you choose a different address and tonality.

  • Segmentation by end device

This has also arrived in most companies in the meantime – websites should be adapted to the respective end device. In this way you provide your users with better readability tailored to their particular situation.

  • Segmentation according to demographic characteristics

Depending on age, gender and place of residence, your marketing approach will be different, just like your needs.

  •  Segmentation according to behaviour on your website

Depending on which pages the user has visited on your website, it makes sense to present him with individual content. In this way, you give them the feeling that your offer is pretty much in line with their needs.

  • Segmentation according to buying behaviour

Perhaps you would like to greet an existing customer differently than a new customer? Or do you offer a special discount coupon on shoes to a customer who has previously only bought shoes from you?

Be creative. Get to know your customers and website visitors and respond to their needs. Or to say it with Steve Jobs: “ Get closer than ever to your customers. So close that you tell them what they need well before they realize it themselves. “

Are there any disadvantages?

In addition to all the advantages of personalization, there are a few things to consider, a few which we would like to discuss briefly. For customers, personalized advertising or personal address can be disturbing if it is not clear to them where you got their data from or why a certain advertising message is displayed to them. That is why transparency is the top priority here. Tell customers and users why a certain product is suggested to them, for example, and where you got certain information from. This gives your users back the feeling of control and promotes trust in your company. You can probably already imagine what is coming now – exactly, the subject of data protection. You may only use data if the user has previously given his explicit consent for this particular use of the data. In addition, the user must be able to withdraw this consent at any time. Please note that there may be further restrictions here, but we cannot go into these in more detail in this article. However, you will find some useful information on the net. Not to be underestimated, of course, is the effort involved in personalized communication. Besides time and money for collecting and evaluating the data, you should also take into account that your data must be updated regularly. Otherwise there is the danger that the whole project will backfire and you will scare your customers away with a wrong address or inappropriate products.

Conclusion

Personalization offers great opportunities for companies. It must be rethought and the customer must be placed in the center. If the correct data is correctly analyzed and interpreted, you as a company have the opportunity to establish better and more appreciative communication with your customers and website visitors. A customized customer communication strengthens the customer relationship, which in turn can lead to more sales, increased customer satisfaction and customer loyalty, as well as to positive effects in winning new customers. If you pay attention to a few things, you as a company have the possibility, thanks to personalization, that advertising in particular is not perceived as disruptive but rather as a decision-making aid. And e-commerce in particular can change its rather anonymous image compared to stationary retail and become more personal and customer-oriented. We would like to conclude with a quote from Marissa Mayer, former CEO of Yahoo: „To me, the future is personalization“. And we also think that the topic of personalization is more than just a temporary hype and definitely worth a try.

 

 

[1] https://searchcustomerexperience.techtarget.com/definition/personalization

[2] https://economictimes.indiatimes.com/definition/segmentation