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Is there Power in Personalisation? Part 1

Author: Olivia Jackson, Senior Account Manager at Eagle Eye

A few years ago, personalisation emerged as a buzzword for marketers everywhere, and in 2015 94% agreed it was a crucial factor to their business’ success.
 
Years on, has personalisation lived up to the hype?
 
What is personalisation in marketing?
 
To some, personalisation is simply adding a first name to an email subject line. But in its raw form, the Data & Marketing Association defines personalisation as ‘an experience for the user, dictated by the user’ and ‘knowing who a person is and what they want from you’.
 
To achieve true personalisation, marketers must therefore have an informed view of who their customers are, by understanding what and when they purchase and how they interact with the business. They need to be able to store and analyse this customer data to communicate the right messages at the right time to customers as individuals.
 
Ultimately, personalisation should be used to demonstrate that the data customers share with a business is used to make their lives better and easier. This should, in turn, drive customer advocacy and support the business’s efforts to increase spend, visits and engender long-term loyalty.
 
The rise of personalisation
 
When Time magazine named ‘You’ as their Person of the Year in 2006, it recognised the rise of user generated content, enabled with the growing popularity of social networks and blogging platforms. Back then, the shift to omnichannel marketing was also just beginning, and many large businesses had started to collect and analyse their own transactional and customer data.
 
Yet the move towards personalisation can be traced back even earlier: when Tesco launched Clubcard as the world’s ever first mass grocery loyalty scheme in 1995, it gave rise to retailers collecting and tracking individual customer purchases. The retailer wanted to recognise customers and thank them for their custom, while also capturing valuable data to better understand their preferences. By segmenting customers based on their purchase history and preferences, and not assumptions that had been made about them, Tesco revolutionised the role customers had to play in the way they were marketed to.
 

Credit: https://www.tescoplc.com/about/our-history/
 
Since the dotcom boom and the rise of pureplay ecommerce businesses, it has become much easier for businesses to track customers through their purchases, using that data to drive insight that can improve their offering. As more businesses are seeing the shift toward omnichannel retailing in line with increasingly rapid ecommerce growth, data science specialists have started the move from segmented to personalised marketing, and the next stage is using artificial intelligence (AI) and machine learning (ML) to automate and further tailor communications, offers and content.
 
As more businesses, especially in the era of COVID-19, adopt more omnichannel strategies, the question they must ask themselves is how they join the instore customer experience with their digital, ecommerce one.
 
Omnichannel Personalisation
 
Omnichannel personalisation is the ability to know and communicate with every customer across any combination of channels they choose. Even in 2020, this is a significant challenge for many businesses who have to contend with antiquated back-end systems and a fragmented technical infrastructure, which means providing customers with a consistent and relevant experience across every channel and touchpoint can be incredibly difficult. 
 
Basic personalisation is no longer enough – research from Econsultancy shows only 8% of customers are likely to engage with a brand that identifies them by first name, and only 7% are likely to engage with a birthday themed email, whereas 50% are likely to engage if they are sent a relevant and timely offer. Further, Smarter HQ found 72% of consumers will only engage with a brand at all if there’s personalised messaging. Where businesses often falter is the instore experience – digitally, they are able to send coupons, offers and tailored content, but they cannot translate this instore.
 
To be successful in personalising omnichannel customer marketing, businesses need to track individuals’ relevant interactions across every area of the business, to gain a clear and insightful single customer view. A well planned and thought out marketing strategy is one that can be actioned consistently across any channel, whether it be online, instore, or via an app or social media, based on what customers want. It can take the instore data (e.g. transaction history) and use it to personalise the online experience with recommendations. Conversely, using the online data to offer instore incentives could see a business invite its customers to instore events that are relevant to their interests and purchase history, for example.
 
This omnichannel isn’t just limited to retail, food & beverage (F&B) brands can use information from their takeaway or click & collect proposition to invite customers to dine in during ‘VIP nights’ or try new menu tastings at their restaurant, so joining up both their at-home and in-restaurant offering.
 
Those marketers that succeed with omnichannel personalisation are those that are able to provide customers with a relevant, omnichannel experience based on a holistic understanding of their wants and needs.
 
Benefits of personalisation
 
But why is personalisation still so important as a marketing goal? In short, those that personalise see far better engagement and brand loyalty, leading to significant increases in revenue. A study conducted by financial services provider Experian illustrated that personalised emails generate six times higher transaction rates, and a report by Smarter Insights reports 63% of consumers will stop buying from brands that use poor personalisation tactics. It starts the process of building and nurturing a relationship with a customer, to make them feel special and appreciated for their custom.
 
Eagle Eye’s own research found that 83% of consumers were influenced to choose to a retailer or brand that recognises and rewards them for their continued custom.
 
Further, research from Econsultancy found 93% of companies are seeing uplift in conversion rates as a result of website personalisation, and 84% of customers reported sometimes or always taking action based on personal recommendations.
 
While personalisation can seem overwhelming, marketers shouldn’t be disheartened. Achieving true omnichannel personalisation is a long game. Evergage’s recent survey highlights how only 32% of marketers believe they are currently getting personalisation right, despite Harvard Business Review finding personalisation led to a 50% reduction in customer acquisition costs.
 
Customers are no longer satisfied by mass email marketing campaigns, and businesses must leverage data to personalise their marketing, especially in the face of increased competition.
 
Watch out for my next blog to read about some of my favourite examples of personalisation and find out what tools every business needs to personalise more profitable customer experiences.
 
To find out more about how Eagle Eye can help you personalise your marketing strategy and execution to foster more relevant and profitable customer engagement, please contact us.