How to Implement Personalized Marketing | One-to-One Marketing Basics

business professionals shaking hands in a meeting

Although marketing has roots in simple exchanges of early human societies, it has evolved drastically and become one of the key business functions since the beginning of the twentieth century. Fast forward to the end of the twentieth century, and something phenomenal happened when web developers realized that they were able to track online visitors who reached their websites. Gathering data from online users initiated an enormous opportunity for marketers as the Internet immediately brought customers to digital storefronts. Marketers have come a long way since then, and now advancements in digital technology, data collection, and data mining methods have taken them to the new level of real-time and prolonged personalized marketing strategies. For a business, personalized, or one-to-one, marketing 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” (Peppers, Rogers, & Dorf, 1999).

Eventually, to create loyalty, each customer should be treated with some level of personalization.

What Are the Benefits of Personalized Marketing?

Personalized marketing makes it easier for customers to return and stay loyal to businesses. It can reduce customer acquisition cost by about 50%, increase revenue 5-15%, and increase the efficiency of marketing spend 10-30% (Ariker, Heller, Diaz & Perrey, 2015).

Just Look at Amazon and Netflix for One-to-One Marketing

One of the best examples of personalized marketing is what Amazon has done by remembering its customers’ individual tastes and preferences for thousands of choices. Because of this strategy, 59% of Amazon’s sales are from return customers, which is roughly twice the rate of typical brick-and-mortar stores (Peppers, Rogers, & Dorf, 1999).

Netflix is another example. More than 60% of Netflix’s service usage comes from personalized messages and suggestions based on customers’ previous viewing behavior (Osborne, 2017).

4 Elements to Personalize Your Marketing

There are four major elements that positively influence the success of a personalized marketing campaign: identifying the customers, differentiating the customers, Interacting with customers, and customizing to customers’ needs (Peppers, Rogers, & Dorf, 1999).

1) Identifying the Customers

It’s important to recognize your customers with as many details as possible. The more details you have about their needs, their interests, and their purchasing behaviors, the more you will be able to address their needs on a personalized level.

2) Differentiating the Customers

Every company has a very diverse group of customers with different values, different needs, and different levels of loyalty. Once you’ve recognized and segmented your customers, it’s possible to provide a personalized marketing activity.

3) Interacting with Customers

For a successful personalized marketing strategy, companies need to pay attention to both effectiveness and efficiency. According to Peppers, Rogers, and Dorf: “Cost-efficiency improves by directing customer interactions toward more automated and therefore less costly channels... Effectiveness improves by generating timely, relevant information, providing either better insight into a customer’s needs or a more accurate picture of a customer’s value” (1999).

4) Customizing to Customers’ Needs

Eventually, to create loyalty, each customer should be treated with some level of personalization tailored with the information learned about the individual.

More Examples of Personalized Marketing

When we talk about personalized marketing, many people think of emails that start with their names. Although that’s a good first step, there are several examples of companies who have implemented it creatively. Let’s take a look at some of them.

Coca-Cola

Back in 2011 in Australia, Coca-Cola launched its famous “Share a Coke” campaign with the goal of reaching more millennials. In this campaign, which was implemented based on personalized marketing strategy, each bottle of Coke was stamped with one of the most popular first names assigned to the millennial generation. It proved to be a great hit, resulting in “12 million media impressions, a 7% increase in young adult consumption, and a 4% increase of category” (Goehring, 2017) and came to the US in 2014. Starting in the summer of 2017, Coca Cola got even more personal by offering bottles with last names on it (Schultz, 2017). Even for a limited time, from May through July of 2017, customers could go to ShareaCoke.com and order their very own personalized bottles.

Grammarly

Grammarly, a smart grammar and spell check software, collects its users’ data and then generates their activity into personalized reports to keep them engaged (Neely, 2016). The report also compares the activity of the individual with other users of the software, proving to be a powerful motivator to use the program more often.

OfficeMax & Spartan Race

Simpler examples are OfficeMax and Spartan Race who target their customers with location-specific information and location-based messages. For instance, OfficeMax sends personalized information about certain store events to customers based on their location and makes it easier for them to take next steps. Or, Spartan Race sent personalized emails to subscribers based on their location which increased their website traffic by 50%, new users by 25%, and conversions by 13% (Neely, 2016).

Make Sure It’s Personalized Properly

For our fast-paced technology driven lifestyle, personalized marketing is becoming a necessity. Marketers who do not take advantage of such incredible opportunity will face consumer dissatisfaction and ultimately market share loss. Consumer research by Janrain shows that “74 percent [of consumers] get frustrated with websites when content, offers, ads, promotions, etc. appear that have nothing to do with their interests” (2013).

When done right, personalized marketing increases customer engagement and loyalty by offering tailored strategies to customers’ real needs.

 

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Written by Dr. Avisha Sadeghinejad, Program Chair , and Bill Davis MA, CM, CDM in the Forbes School of Business & Technology™.

 

References

Ariker, M., Heller, J., Diaz, A., & Perrey, J. (2015). How marketers can personalize at scale. Harvard Business Review.

Goehring, R. (2017). 45 examples of personalized marketing that really work. Retrieved from Reward Stream at https://rewardstream.com/blog/45-examples-personalized-marketing-really-work/

Janrain (Customer Identity and Access Management Platform). (2013). Online Personal Experience study. Retrieved from http://www.janrain.com/about/newsroom/press-releases/online-consumers-fed-up-with-irrelevant-content-on-favorite-websites-according-to-janrain-study/

Neely, P. (2016). 3 types of personalized emails that get our attention. Retrieved from Nifty Images at https://blog.niftyimages.com/2016/11/01/3-types-of-personalized-emails-that-get-our/-attention/

Osborne, M. (2017). How to use behavioral data in personalized marketing campaigns. Forbes. Retrieved from https://www.forbes.com/sites/forbesagencycouncil/2017/06/26/how-to-use-behavioral-data-in-personalized-marketing-campaigns/#50e73e136fbf

Peppers, D., Rogers, M., & Dorf, B. (1999). Is your company ready for one-to-one marketing?. Harvard Business Review. Jan-Feb 1999 Issue. Retrieved from https://hbr.org/1999/01/is-your-company-ready-for-one-to-one-marketing

Schultz, E. J. (2017). Why Coke is adding last names to ‘Share a Coke’. AdAge. Retrieved from http://adage.com/article/cmo-strategy/coke-adding-names-share-a-coke/308678/

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