Consumers, at this point in time, expect a certain level of personalization. In fact, “70% of consumers say that how well a company understands their individual needs impacts their loyalty.” And more companies than ever are tuning in, and for good reason. Personalization is a huge driver of customer satisfaction and a pleasant customer experience, a key driver of brand loyalty and also towards boosting your bottom line.
In order to be effective, personalization must happen at a granular, individual level. A successful personalized marketing plan “requires integrating personalized offers seamlessly into the customer experience. Fortunately, off-the-shelf technology is now available to automate much of the effort” (Boston Consulting Group). But is it worth the investment to harness consumer data at the individual level? Let’s take a closer look at how personalized marketing is better for business.
Drive more Engagement
It makes sense that personalized marketing works. Imagine getting an email advertisement for a pair of shoes you’ve never seen before, versus an email with a pair of shoes you’ve been eyeing for a few months, along with some comparable pairs. “Personalized emails drive 6x more transactions compared to non-personalized email campaigns” (Startup Bonsai).
This increase in engagement drives direct revenue increases:
“Marketers report a whopping 760% revenue increase from segmented email marketing campaigns” (Startup Bonsai).
Which leads us to our next reason for honing in on personalization…
Boost your ROI
All this consumer engagement driven by personalization tactics leads to a higher percentage of sales, because personalized offers are more likely to drive action than any other mass marketing campaign. Each of these small-scale interactions can drive huge growth for brands.
“25% of mass promotion spending to personalized offers would increase return on investment (ROI) by 200%, leading to a top-line growth opportunity of more than $70 billion annually” (Boston Consulting Group).
Reduce Marketing Costs
Because you’re getting a better return per marketing campaign, investing in personalized “programs can also reduce marketing and sales costs by around 10 to 20 percent” (McKinsey). Personalization is effective, giving you more bang for your buck, and allows for unprecedented growth, even within the consumer base you already have. Customers who engage with personalized content from brands they love are more likely to drive follow-on sales as their brand loyalty increases.
Take Starbucks, for example. They’ve moved away from mass promotions, and instead, Via their Rewards app, “emphasizes gamified specials tailored to each Starbucks Rewards member. The scaling up of such offers has resulted in sustained 8% year-on-year growth in member spending and fueled comparable store sales growth for many years.” Consumers want to feel valued, and there’s no better way to do that than to provide tangible incentives for being a loyal consumer.
So what’s stopping you?
There are some “tactical challenges in getting personalization off the ground”, which include data management—”more than two-thirds of survey respondents (67 percent) indicate that their greatest personalization challenge is the gathering, integration, and synthesis of customer data” (Forbes). Having a data aggregation system that allows you to track products and communicate directly with consumers, one one platform, is something that many brands have struggled with.
“Retailers’ in-house advanced analytics teams need to build the intelligence layer to enable these solutions. This powers the right technology stack with the necessary customer data and integrates the various solutions into a seamless experience” (Boston Consulting Group).
Vi3 offers actionable intelligence insights to equip your brand with the granular-level data you need to make marketing campaigns that take off (rather than get filtered as spam). We incorporate accessible technology to provide a platform that gives you data with pinpoint-accuracy. Talk to one of our team members today.