Helping customers cross from one-time buyer to repeat buyer is key for any business to succeed long term. Yet, with the now seemingly infinite ways to shop and excess of competitor’s products to choose from it’s becoming harder and harder to reach share-of-wallet.
Successful brands are increasingly placing their marketing efforts into personalization, building on purchase history and behavioral data to create a personalized experience that keeps customers coming back for more.
Personalized customer experience is now the leading way to win customer loyalty. Today, a personalized marketing strategy is not just appreciated. According to McKinsey, 80% of customers in today’s landscape expect personalization from retailers, and can even consider it a hygiene factor.
Most marketers will be aware that they have customer data available to them, but might not be sure how to fully utilize it. By harnessing the right data tools and creating unique personalization efforts, retailers can set themselves apart – and market directly to the consumers who will pay attention.
What is data personalization?
Data personalization – sometimes referred to as ‘data-driven’ personalization – is about delivering value to customers at the right moment, generally with the goal of keeping them engaged with you for as long as possible and increasing their lifetime value.
Personalized experiences deliver specific value to each client in a way that reflects both your brand, company, and services, and their individual needs, and demographic data (i.e. the group or groups they identify with). But doing so requires companies to collect customer data to determine behavioral data, then adjust the customer experience accordingly to feed that engagement.
Data-driven insights can inform millions of individual customer experiences at scale and every touch point. This directs their attention at the right time, straight to their immediate preferences gathered from previous purchasing patterns. When marketing efforts are backed up with data-led insights and personalization, it fuels impressive growth.
Food delivery giant Uber Eats is a shining example of wielding customer data. They’ve developed a unique marketing process by adopting a ‘dish first’ approach informed by customer location, order history and taste profile, rather than simply suggesting restaurants based on where customers have visited before. They’ve shaken the fast-food industry, identifying common gaps in the market to fill, and revealing what customers really want to see on the menu.
Everything You Need To Know About Personalized Customer Engagement
Here’s what you need to know right now about personalization and building better relationships with future customers.
What is the difference between personalization and customization?
Although closely related, the two concepts look hugely different in practice.
Customization is led by the customer, given the power to manually customise their product or search requirements to arrive at their preferences. But this information tells us a lot about what marketing efforts are paying off, what products and services need adjusting to fit the market, and how to best evolve our offerings.
Personalization meanwhile typically takes place behind the scenes, without customers explicitly stating their preferences. Companies need to have access to considerable customer data – often drawn from mobile apps, behavior online, website use, and in-store purchasing habits.
From here, it’s a matter of analyzing those preferences and delivering them back to customers so that they’re getting an experience tailored to them. And the more tailored – or, to put another way, customized from the business – the better the experience they have.
Why is data personalization important in business?
It provides relevant content for your target audience
Key to any successful brand or marketing campaign is understanding who you’re marketing to, and who you intend to attract to your brand. A failure to attract customers, then, can often be due to an incorrect target audience – something that’s often signaled by a drop-off of customers.
Data personalization takes this approach and focuses it with laser precision, often by taking individual demographic data and layering on behavioral data – then giving customers finely tuned, personal marketing that drives them back to your website, app, or store.
Creates a better shopping experience
Customer-centric design should be woven into every touch point in the customer journey. From the drive-thru to the menu board, right through to digital apps and mobile devices, loyalty programs and user kiosks, the bounds of personalization implementation in the quick-serve restaurant (QSR) industry are endless. And when people are shown more of what they want, they’re simply more likely to buy.
When data-informed product preferences are obvious and upfront – something often achieved by considering that customer’s purchase history – it helps accelerate customers along their decision-making journey and fosters a better relationship. Personalization builds better bonds.
Quick and early engagement also saves customers precious time, increasing the likelihood of following through to purchase. And that’s an advantage that you can only get when you have the data and capabilities to connect behaviors back to the buyers who drive your business.
Personalized pricing and promotions are still an eye-catching way to sway purchasing behavior. While they are easily imitated by competitors, retailers can still stand out among the rest by using data personalization alongside discounts to focus their resources and achieve more sales.
McDonald’s has led this space. They analyzed data-led geographic trends informed by time and weather to support their promotional activity and employed artificial intelligence technology and machine learning to market personalized promotions directly to customers.
That kind of process requires some clever capabilities and insights, but it’s one way that this restaurant leader is owning its market.
It’s not just benefiting customers, either. Knowing what people are more likely to buy can also speed up transactions and reduce processing times in stores too – something restaurant staff are no doubt keen to take advantage of.
The most satisfying customer experiences are those that prompt what a customer may want before they even know it themselves.
A hyper-personalized shopping experience is likely to draw them back again and again. Targeting these regular shoppers is likely to prompt three times more return on investment than mass promotions – raising their lifelong value and returning more value to the business.
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How you can use data personalization to create an engaging marketing strategy
VIP perks or loyalty programs
They’re a powerful asset for attracting your customer base to keep coming back for more, and Starbucks is a leading example of this brand loyalty success.
Starbucks recently attributed 53 percent of their in-store profits to their in-app loyalty program, which helps Starbucks’ devoted fans keep their next fix just a few clicks away on their device. And repeat buyers all purchasing the same popular brew through their devices are alerted to special discounts or birthday bonuses.
If lots of people bought the same drink and snack on the same date last year – perhaps coinciding with SuperBowl or the latest blockbusting franchise release – then a discount might be sent to those customers the following year to help them enjoy the experience the same way.
Customers who are already hooked on a product are unlikely to decline an offer so tempting – potentially purchasing two, three or four days in a row in some cases and feeding into the ‘gamification’ of the brand experience. Starbucks can then track their customer data, and use it to drive more personalization efforts across all channels into the future.
Send personalized push notifications
Retailers and QSRs are now diving further into the data they have on hand to gently nudge their customers toward a purchase at just the right moment.
It’s no coincidence that devoted McDonald’s breakfast patrons are notified with a coupon at breakfast time – but smarter analytics and better data-led insights can nudge those patrons to choose a trusted custom favorite or try something new, according to their profile.
Past purchasing behavior and personalized promotions meet to make a killer push notification formula. A short, sweet, and made-to-order notification is sure to capture the customer’s attention and drive more sales.
Unified silos of customer data can come together to create a precise and optimized marketing strategy with a clear 360-degree customer view. Opportunities for personalization can come from many data sources such as customer preferences, buyer histories, demographics and offer or loyalty redemptions. Contextual data is also highly relevant.
The time of day, year, or even temperature can refine targeted recommended offers in real-time. (Why not recommend a cool ice cream on a hot day, or a hot drink when it suddenly gets cold outside?)
This concept has flipped the food and restaurant industry on its head. The advent of online purchase and delivery has seen a meteoric rise in delivery-only restaurants.
QSR brands in particular can now optimize their offerings, personalizing the entire customer experience from menu presentations and ordering, right the way through to its delivery – all profitable without a customer-observable premises.
By bringing together a constant stream of data from a range of sources such as customer preferences, historic purchases, offer and loyalty redemptions, demographic and contextual data (such as weather or events). You can supercharge your marketing campaigns by delivering targeted content and offers, and refine recommendations in real-time.
Data-led personalization will only play an increasingly important role in business in the future since it helps build relationships between brands and customers in a way that fuels fantastic lifetime values.
By tuning marketing content and push notifications to reflect purchase history and behavioral data, buyers get an experience that best reflects their engagement with your brand and builds a better shopping experience.
It is one thing to give your customer what they need, and it is another to anticipate that need before they know it themselves. Master the use of your customer data and personalize their customer experience – you’ll unlock a treasure trove of marketing potential.