Has your marketing team kept pace with advancements in one-to-one marketing? And are you aware of the latest developments in offering highly personalized offers to customers?
In this article you will learn:
First, let’s review how fundamental personalization has become to 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.
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 a strong base of loyal, engaged and happy customers.
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.
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 user customization. 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 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 initiative, 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.