Developments in automation, programmatic, artificial intelligence and the Internet of Things (IoT) offer revolutionary customization and hypertargeting capabilities. For those using data for personalized marketing , this confluence of targeting abilities has strengthened their ability to target the right consumer with the right product or service at the right time.
Too many options can be detrimental to your business objective and paralyze the consumer from making a decision – which is where personalization comes into play. According to John Deighton, a Harvard Business School marketing professor, “People don’t want to have to make choices. But brands don’t know for certain what people want and so they provide options for people to choose from, but that’s a clumsy experience.”
The competitive nature of personalization
Grabbing a cup of coffee was once a modest exchange of choices, where the barista only inquired about whether you wanted your coffee black or with cream and sugar. With a multitude of coffee combinations – sweeteners, flavors, dairy variations and toppings – baristas have become quite erudite in remembering sophisticated recipes and even regular customers’ orders. Baristas who successfully execute complicated java concoctions and remember a customer’s name enhance the coffee shop’s reputation, giving them the competitive advantage in customer service and product quality.
Our coffee shop scenario exemplifies the principles of personalization in marketing. In the digital space, marketers use data to optimize the interactions they share with each user in their databases in order to differentiate themselves from competitors.
In today’s connected ecosystem, personalization is the apex of high-quality, cross-channel marketing. The May 2016 Forrester report even noted that their top three priorities for this year were personalization, people and platforms.
Historically marketers concentrate on differentiating their products, services or offerings from competitors, and personalization adds another lens to target specific audience segments. The core of these insights begin with first-party data, which is high-quality data aggregated from any owned source, such as social platforms or sales data. Unlike first-party data, third-party data is amassed from indirect sources, so marketers have significantly less control over the quality of this information.
Once customer data is established, personalization can be as simple as attaching a customer’s name to an email or sophisticated enough to strategically recommend a product or service. Now more than ever personalization is necessary to remedy fragmented consumer behavior. Cross-device usage (such as mobile) has become an indispensable part of everyday life, forever changing consumer behavior and the decision-making process.
Google has identified these intent-rich, decision-making moments as “micro-moments” in which consumers reflexively use a device (increasingly a mobile device) to instantly seek information. This mindset has translated to consumers expecting brands to satiate their needs, and Google acknowledged that only the brand’s that understand personalization and “micro-moments” will be successful.
Fortunately, marketers can implement tags to collect and integrate data in order to deliver “the right message to the right audience at the right time.” Tag management is a pragmatic tool that makes customer data actionable, and with the introduction of proximity marketing, it’s more important than ever before to bridge the gap between the digital and physical worlds in order to extract the most valuable data from each level of the marketing stack.