Marketers would say personalized offers erupted in 2007, and technology has been the focal contributor to the evolution of what we know as personalization marketing. However, one-to-one marketing continues to be one element slow to adoption in many marketing strategies. Speed is the future, and 1:1 marketing is the answer.
Has your marketing team kept pace with advancements in one-to-one marketing? And are you aware of the latest developments in offering hyper-personalized offers to customers?
In this article you will learn:
At the highest level, one-to-one marketing is a strategy designed to learn from, and cater to, individual customer preferences. It's a strategy that not just gets the company's attention but also improves customer loyalty and retention for the brand. One-to-one marketing is focused on integrating personalized experiences with the offers customers receive.
Personalized marketing is synonymous with one-to-one marketing because it is based on the data brands have collected from each consumer. Then marketing activities are created to align with customer preferences and needs, based on past decisions they’ve made with your brand. This marketing strategy offers every consumer a chance for a personalized experience.
Individual customers have different needs, and different motivations that will drive customer loyalty, so each product or service offered should align with their customer journey and previous engagements.
In order to create the right kinds of personalized offers or experiences, brands need to collect first-party data from their customers, and then activate that data in seamless ways. Modern consumers are accustomed to digitally-native experiences that are more tailored to their exact needs (think Netflix recommendations or curated Spotify lists) and are unlikely to give their money or personal data to brands who won’t create those seamless experiences.
The goal of one-to-one marketing is to improve c
ustomer loyalty and retention. This is done by driving a customer experience that is based on data collection that defines the consumers' needs. Acquiring new customers is a common goal for newer brands, but keeping them becomes a challenge, especially for legacy brands that have been around for years. Personalized marketing increas
es the opportunity to deliver the best offers reaching the appropriate people thus creating a cost-effective way to increase customer satisfaction.
When brands increase satisfaction, they’re also increasing customer lifetime value. There is well established evidence that just 20% of customers account for 80% of profits. In other words, keeping existing customers engaged is much more efficient—and profitable—than trying to attract new ones. So hyper-personalization is a much more cost-effective way to increase revenue than constantly focusing on acquisition tactics.
First, let’s review how fundamental personalization has become too competitive marketing teams. Consider just one study published a few years ago by Epsilon; it revealed 80% of customers value personalized offers.
However, respondents also reported that few companies were doing a good job in the area of personalization.
Marketers should take note of this opportunity to build on their one-to-one marketing efforts. Personalization is a proven, straightforward path to creating happy and loyal customers—and that’s a way to gain a competitive edge, even in markets facing substantial challenges related to customer growth and retention.
Marketers should take note of this opportunity to build on their one-to-one marketing efforts. Personalization is a proven, straightforward path to creating happy and greater customer loyalty—and that’s a way to gain a competitive edge, even in mar
kets facing substantial challenges related to customer growth and retention.
In fact, the Epsilon study showed respondents liked the idea of receiving personalized offers (including receiving coupons based on location and customized communications) from companies squeezed by digital disruption, including:
Meanwhile, massively successful brands like Amazon, Google, Facebook and Netflix have continued to lead the way when it comes to evolving conventional approaches to one-to-one marketing. These cutting-edge companies manage thousands or even millions of interactions with customers every day. They understand the power of personalization to create strong customer relationships.
While all marketers know the basics of one-to-one marketing, they can learn valuable lessons from companies that are taking rudimentary personalization experiences (such as adding a customer’s name to an email subject line) to the next level.
One-to-one marketing strategies will become an imparative tool for customer relationship management. Consumers are interested in knowing that their data is used to drive their one-to-one offers.
In fact, consumers are frustrated about the lack of personalization they’re seeing after brands have asked them to share their personal information. Only 40% of consumers believe brands are using the personal information they’ve provided to create better offers or experiences for them. The other 60% of respondents believe they’re getting the same offers as their peers, even though they have different shopping habits and preferences. No wonder consumers are growing wary of providing their personal information.
The future of one-to-one marketing is hyper-personalization, which will create deeper relationships with customers and turn them from occasional shoppers into long-term buyers. When marketers create personalized marketing campaigns with the right tools, it will expand the number of valuable customers who will continue engaging with that brand.
Now, with the availability of AI, one-to-one marketing can be automated in a process known as hyper-personalization. Many marketing teams are just starting to explore the benefits of making hyper-personalization a part of their marketing stacks. A research report released by Ascend2 shows only 9% of marketers are using hyper-personalization tools; 62% are considering such tools but have yet to adopt them.
What can we learn from the companies implementing hyper personalization in marketing? Below are a few examples.
Starbucks uses hyper-personalization campaigns to develop customer loyalty and gather valuable customer data.
Not only can customers order products and have drinks custom made to meet their requests, a core customer experience tactic used by Starbucks is individualized offers. They adopted a personalization solution based on behavior in an evergreen campaign manner. Using this technology, Starbucks can better anticipate the habits and needs of its customers and provide a 1:1 personalized experience.
The solution Starbucks uses bases personalization on customer behavior data and preferences taken from their loyalty program. This data is willingly shared by customers in exchange for product rewards and special offers. By rewarding customers for their participation in the program, Starbucks can increase brand loyalty and gain valuable data. Starbucks can then use this data to successfully create hyper-personalized campaigns and services to increase revenue and brand image.
Spotify uses hyper personalization to build custom user profiles and offer customized recommendations.
Like Starbucks, Spotify’s service model is based on the user. Spotify users are encouraged to create their own playlists, follow artists, and rate or skip songs. For hyper personalization, Spotify can then use this data to build a profile of each user and offer them custom recommendations.
This personalization is provided via their Discover Weekly and Live Concert features. Discover Weekly provides a customized playlist of songs and artists based on listening preferences in the previous week. The Live Concert feature notifies users of upcoming events featuring their favorite artists and includes an option to buy event tickets.
By applying data that users are already providing, Spotify can specially design features in their product to keep user interest. These features increase the value of the service for users and can generate new revenue streams for Spotify.
O2 leverages hyper personalization in ads to get better click-through rates and engagement.
You can find a one-off example of hyper personalization in O2’s “Tariff Refresh” ad campaign. O2 is a cellular provider based in the UK. Using customer data, such as device specifications and location, O2 created around 1,000 versions of an ad. O2 then distributed this message to users to inform them about their current plans, upgrade availability, usage, and nearby store locations.
Since these ads contained highly relevant information, customers were more likely to engage and act on the content presented. As a result, O2 found that these hyper-personalized ads resulted in 128% better click-through rate than generic marketing campaigns.
Even if you’re not ready to adopt hyper personalization tools, you can build a framework now to evolve your one-to-one marketing initiatives. Start by focusing on your users’ needs. You need to understand how users and customers view your products and what they may think of your personalizations.
It’s also helpful to understand what problems they may be trying to solve. You can then create customizations based on your customer's preferences or offer products to help. Once you have a basic idea, you can try out several methods and refine your initiatives with any feedback you receive.
To get started with creating a successful personalized marketing strategy, consider following these steps:
An AI-based hyper personalization solution can help you go through these steps in a robust, scalable and automated manner. Learn how with our latest white paper, “Where Segmentation Falls Short.”
Formation’s technology is based on an AI/ML engine that models customer interests and motivations, getting smarter and more effective with each new customer interaction it analyzes. Based on deep industry and technical expertise, the platform helps you scale marketing while increasing efficiency and driving better business results.
At the end of the day, personalization is not just important - it's expected by modern consumers, and brands that haven’t yet begun personalizing their outreach to customers are going to lose the loyalty of their current customer base. Developing personal relationships through one-to-one offers can seem complex, but implementing the appropriate processes to move your brand towards hyper-personalization will be the determining factor for customer loyalty and customer lifetime value. One-to-one marketing results in better customer engagement, brand loyalty, and overall revenue. Kick start your next personalized offer campaign by implementing these five critical components to building an offer campaign brief.
The availability of AI enables marketers to automate the process of one-to-one marketing. This process is known as hyper personalization. Personalization is a proven, straightforward path to creating happy and loyal customers. Customer loyalty is the right way to gain a competitive edge, even in markets facing substantial challenges related to customer growth and retention.
There’s a lot more to learn about one-to-one marketing. To continue your research, take a look at the rest of our blogs on this topic:
How to Leverage Customer Personalization for Growth
Marketers often engage with customers in a “one-to-many” fashion. Customer personalization makes those messages feel more unique to each individual consumer. However, while personalization creates unique journeys for each customer, it can be challenging to operate at scale.
To solve this, companies are implementing machine learning (ML) and artificial intelligence (AI) solutions to increase engagement. These solutions analyze a large amount of various data points and create actionable insights. These insights are used to create individual journeys for each customer.
Transform Your Customer Experience With Personalization
When trying to build a customer-centric marketing plan, marketers often focus on segmenting their audience by categories like demographics, psychographics, lifestyle and habits. But this type of segmentation doesn’t create a tailored experience on an individual level.
Instead, marketers should focus on using customer data to build a single view of each customer, then finding the right solutions to turn that data into a fully personalized customer experience (also known as 1:1 personalization).
We have authored in-depth guides on several other hyper-personalization topics that can also be useful as you explore the world of one-to-one marketing.
Learn how one-to-one marketing can impact marketing effectiveness and your bottom line, and how brands are scaling personalization across digital channels.
See top articles in our one-to-one marketing guide:
Today, marketing is not just about customer acquisition but also retaining your biggest fans. And the best way is to increase customer loyalty through a loyalty program.
See top articles in our customer loyalty guide:
Learn about the importance of customer engagement, and get practical advice to build a customer engagement strategy that transforms customers into fans.
See top articles in our customer engagement guide:
Traditional types of customer segmentation fall short on many accounts. Learn how AI and ML can personalize offers with the best combination of incentives.
See top articles in our customer segmentation guide:
If you’re a marketer, you probably aren’t too concerned about what’s “under the hood” of the martech tools you’ve adopted. You want it to be easy to use, and able to drive the results you expect – whether its creating and deploying offers, increasing engagement or improving sales.
See top articles in our AI for marketing guide: