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Real-Time Personalization Delivers Real Results

August 24, 2020

In this article you will learn:

Personalization in marketing has come a long way from simply using customers' names in a greeting of an email. Today it's all about the customer experience. Consumers are loyal to brands that listen to them, know what they like – and don't like – and pay attention to their needs by tailoring messages, offers and promotions to their individual interests and motivations.

Brands today must go through a marketing transformation to stay relevant in the eyes of their customers. They need to evolve from traditional marketing communications, putting a greater focus on listening to and analyzing digital conversations, then using data as the basis for delivering experiences that resonate with each individual.

To achieve this level of 1:1 marketing, real-time personalization is required. This approach provides constantly updated insights into customers interests and actions, and provides brands with the agility required to quickly adjust their efforts so they can deliver an excellent customer experience and incentivize the actions they desire.

What is real-time personalization?

Real-time personalization is a means of delivering a unique and optimal experience to each customer on a 1:1 basis. This data-driven approach leverages information from a wide variety of first- and third-party sources – from loyalty program data, such as past purchases, buying behavior and demographics to outside sources like social media, clickthroughs, pages/content viewed, geolocation and email opens – to customize experiences. It requires rapid data aggregation and analysis, as well as omni-channel deployment, all fueled by artificial intelligence and machine learning.

In real-time personalization, marketing is not "one-and-done." The various data sources must be continually monitored to identify changes in customer behavior, motivation, intent and interest. By having the tools that enable this detailed analysis, marketers can refine their offers over time and optimize results through increased customer engagement, greater sales and enhanced loyalty.

Often called a "segment of one," real-time 1:1 personalization is much broader and deeper than typical macro and microsegmentation practices. Such segmentation, where you can break down larger affinity groups into ones with more defined shared interests and demographics, is impossible to do in real time. They require manual processes for offer creation, which limits the number of segments a brand can effectively manage to between 10 and 30. Each new, smaller segment results in greater complexity. Cross-functional teams must to come together to select the promotional value, creative, details and delivery channels, then manage the results. And the process is time-consuming; it can take between 4 and 6 months to get one campaign out the door.

Why does real-time personalization matter?

Real-time personalization can be a defining factor as to whether companies meet, or beat, sales and revenue goals. And it can make or break the customer’s decision to stick with your brand or be easily swayed by a competitor.

Because customers today seek better, more relevant experiences, personalization is proving to be the foundation of customer loyalty and business growth. Our recent study noted that 79%of consumers agree that the more personalization tactics a brand uses, the more loyal they are to that brand.

On the flipside, an Adobe survey of enterprise decision makers noted that companies focused on highly engaging customer experiences believed real-time personalization was a competitive differentiator that had a positive financial impact. Companies were more than three times likely to have exceeded three business goals when relying on personalization. For example, by leveraging 1:1 personalization, companies have been able to attain revenue growth of 6% to 10% – two to three times higher than those who do not, according to Boston Consulting Group research.

Making real-time personalization a reality

Despite understanding the importance of marketing personalization and knowing they could achieve positive results, many companies are hesitant or unprepared to take it on. One recent study indicated that 63% of marketers said data-driven personalization is the most difficult online tactic to execute.

To succeed at real-time personalization, marketers first need to access and process large amounts of disparate data – including customer, transaction, and third-party data. This cannot be done manually or with traditional marketing tools. What’s required is a platform that leverages AI and ML algorithms, as well as a high level of automation, to constantly analyze an audience and finetune promotions.

AI is responsible for developing insights about the customer, such as his or her motivations, while ML is applied to drive the optimal business outcomes over time, such as the best promotion for the individual customer. These technologies bridge the historical silos of data that reside in different organizations within a company, and coalesce it with outside data, providing marketers with access to a complete picture of what customers truly want. AI and ML also give companies the agility needed to quickly turn data into insights, then into offers that capitalize on ever-changing customer preferences and other factors.

Combining this technology, advanced platforms can make the offer creation and execution process faster. It gives brands the power to develop millions of promotions – a different one for each customer – and refine them over time. Automation, AI and ML can help brands continue to scale as they grow. With AI and ML, marketers can experiment with offers to see what works, and optimize those offers by using the best-performing combinations. Marketers also are able to automate the process and continue to learn more about individuals’ behaviors and actions, so offers can be refined to improve engagement and loyalty.

Real-time personalized marketing, powered by AI, ML and automation, is a game changer for marketers. These tools enable them to quickly adjust variables without limit, and personalize a variety of factors that improve efficiency and uptake of offers. They also remove the limitations that marketers have faced with segmentation marketing, allowing brands to build stronger relationships with their customers, which drive better business results and customer lifetime value.

Learn more about the Formation platform or contact us to see how Formation can help improve your marketing results.

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