Marketers have long understood that it’s easier to sell to your existing customers. However, research increasingly indicates that effective personalization is necessary for repeat sales. 74% of online customers get 'frustrated' by product recommendations that are irrelevant to their needs and interests. Data consistently indicates a lift in sales when personalization segments and affinity analytics are effectively applied to online marketing. However, for brands who lack Amazon’s envious average customer lifetime value from effective personalization, the problem could be your insights.
Some 52% of marketers consider personalization fundamental to successful marketing, but only 20% of marketers use behavioral triggers. The ability to generate personalized offers, deals, and recommendations when an existing customer begins searching can ensure you’re best able to capture repeat sales in micro-moments of need.
As marketers shift towards more sophisticated applications of analytics for personalized marketing, the need for better segmentation and real-time analytics is clear. Developing a strategy for earning repeat spend from your existing contacts can have a significant impact on your revenue. Generating effective product recommendations and offers that mirror your prospect’s real needs in the moment requires access to transactional, quantitative, and qualitative insights from a variety of sources.
What Does Effective Personalization Look Like?
There’s no question that creating personalized customer experiences can allow brands to increase retention and loyalty among repeat buyers. Adobe refers to 'increasing data availability' as 'disruptive', for brands with the savvy to know their existing buyers better than ever before. Per Echidna, the status quo for effective customer personalization involves:
- Optimal timing of personalized product recommendations and offers
- Sophisticated adaptation based on demographics, 'behavioral, and transactional' insights
- Multidimensional recommendations, across categories, brands, products, and offers
- Multi-channel personalization, for desktops, smartphones, and mobile devices
Brands must look beyond their first-party transactional insights to develop comprehensive understanding of their customers. By leveraging a variety of big data insights from social media, third-party transactions, and demographics, it’s possible to gain better insight into your customer’s latest preferences and purchases. Best-of-class marketers understand the importance of generating offers and recommendations based on searches your customers performed on their mobile device minutes ago, not a purchase made on your website last year.
Big Data Insights for Effective Personalization
Despite the critical importance of big data-driven personalization for digital marketing, adoption lags across industries. 26% of organizations have yet to adopt any real-time insights to personalize web experiences, and 39% of marketers believe their data is too old to produce actionable insights. While the average organization has yet to tap into 95% of their data assets, improving your utilization of internal transactional insights probably isn’t the key to better personalization.
However, simply integrating third-party data insights into your personalization strategy won’t necessarily yield improved results. In a case study of Kraft, the brand achieved approximately 50% accuracy with third-party data assets. Further analysis by Kraft’s digital marketers revealed the issue was with their data vendor’s segments. Their vendor classified women as 'trendy' if they visited a high-end furniture store website within the previous six months. The experience lead Kraft VP Bob Rupczynski to conclude 'There’s just so many problems with the quality and the recency…third-party data has a problem.'
Will Integrating Third-Party Data Insights Improve My Personalization Efforts?
For many brands, taking steps to integrate third-party data insights can provide much richer grounds for personalization. However, not all data vendors are created equal. To avoid similar results to Kraft’s by purchasing from a vendor with significant quality and recency issues, look for a Data Exchange Platform (DXP) to provide real-time, quality scored data and consider the following criteria before integrating any third-party insights into your marketing campaigns:
- Are we renting this data, or is it an owned asset? Marketers typically maintain better control over segmentation and classification of owned assets.
- Can these insights be integrated? The right data vendor will allow you to combine third-party assets with your own CRM insights conveniently in a data management platform (DMP).
- What don’t we know about our customers? Chances are, your own data assets lack understanding of your customer’s interactions with other brands, demographics, and preferences. Seek out data vendors that allow you to fill in the gaps.
For more information on the importance of personalization, we recommend our recent blog Why Personalized Mobile Marketing isn’t Possible Without Big Data.