4 Tactics to Evolve Your Marketing from Segmentation to Personalization

What’s the value of a shopping cart?

As a marketer, you may respond that there’s no clear way to measure the ROI.

But imagine you’re grocery shopping and the store doesn’t have one. You’ll likely walk out the door — and that’s the most valuable piece of information any brand needs.

With consumers having immediate access to so many options when it comes to how, what and where to buy, customer experience has overtaken product and price as a brand’s key differentiator. And if the experience isn’t good, consumers are quick to cut ties: A recent PricewaterhouseCoopers study reveals that more than 30 percent of consumers worldwide will stop doing business with a brand after just one bad experience.

Of course, what makes a satisfactory customer experience is unique to each person. Which is why personalization, as a marketing tactic, is a primary focus for brands. Yet while 89 percent of marketers claim to be investing in personalization, according to research from Forrester, only 40 percent of consumers believe information they receive from retailers is relevant to their individual tastes and interests. This is because most brands are still marketing to segments of many, instead of segments of one.

Traditional segmentation strategies often use single data points, such as demographic data, to personalize buyer journeys. But knowing one thing about an individual does not define a customer. And let’s be honest, receiving a product recommendation or birthday acknowledgment isn’t really all that personal… or useful. Thus, personalization based on segmentation provides the wrong experience to most of the people most of the time.

True 1:1 personalization means recognizing and relating to an individual with truly individualized experiences that offer value and meaning throughout the buyer journey. Accomplishing this, however, not only requires the right data and technology solution, but also a total buy-in across the organization to understand personalization as a business strategy, not just a marketing tactic. No small task, for sure. But one that every brand can begin to implement by doing the following four things.

From Segmentation to Personalization

1. Consolidate customer data from both internal databases and external partners into a single, centralized repository.

Most marketers are working with multiple technology solutions and partners, their customer data strewn among dozens of different platforms, channels, applications and silos. And while the capabilities for each may be powerful in its own right, disconnected data sets leave brands with fragments of consumer behavior past and present, online and off, which makes personalization a gamble — and irrelevancy a sure thing.

To power personalized experiences, marketers need to work with neutral solutions and open platforms that enable the continuous collection and syncing of offline and online data via one unified customer database that the entire company can access. By developing their own data foundation, brands can take advantage of authenticated and durable identifiers, such as hashed email addresses or loyalty program membership, to build customer profiles that persist and enrichen over time, driving more meaningful and relevant interactions at every touchpoint.

2. Explain to customers why you are collecting customer data — and use it to create great experiences that need no explanation.

Experience has taught us that people will share personal data as long as they get something valuable in return. And despite a growing spate data of breaches and increasingly invasive advertising, a 2018 consumer study by Adlucent reveals that consumers are more willing to share data — from product preferences to pregnancies — than they were two years ago. The catch: 96 percent of consumers want more transparency about how brands collect and use their personal data.

By being completely transparent about the value exchange from the get-go, brands make it clear what customers are giving up, and what they are getting in return. Customers and prospects that willingly share their data become actively engaged with the brand, equipping marketers with the insights needed to create individualized and meaningful experiences that advance relationships to the next level.

3. Design customer interactions with the intent to both collect and use individual customer data across the enterprise — not just within marketing channels.

Consumers don’t share their data in return for more marketing. They do it because they want something in return.

The myriad of first-party data customers leave behind with every brand engagement can be used beyond marketing to inspire new products and services, strategize better customer service and fulfillment processes, and inform smarter investments. Ultimately, it gives customers a reason to return.

4. Use personalization to solve customer pain points before trying to surprise and delight them.

As Amazon founder Jeff Bezos reminded shareholders in 2017, “No customer ever asked Amazon to create the Prime membership program.” But with more than 80 million consumers willing to pay over $100 for the convenience of perks like two-day shipping (and spending roughly twice as much annually on Amazon as non-Prime subscribers), sure turns out they wanted it.

Following in Amazon’s wake is a spate of forward-thinking startups (think Airbnb, Lyft or Stitch Fix) that are killing it because they are anticipating what customers may desire next, in turn creating authentic and unique offerings that people don’t even realize they want — but soon can’t live without. Can you remember what it was actually like to call a travel agent? Or hail a cab? Or try on clothes in a store?

Consumer wants, needs and expectations will always evolve as new personal experiences unfold. To compete in a marketplace where 31 of the top 50 disruptor companies, as defined by CNBC, have already reached the billion-dollar valuation mark in the span of a few years, brands must be able to continually take note of customers’ ever-changing demands and offer the most relevant and valuable solution. This is why personalization as a business strategy is no longer an option: It’s absolutely essential for survival.

The Marketer’s Key to Personalization

At the end of the day, a marketer’s job is to know more about her customers so that she may serve them better. This may mean different things for different people. But with a business strategy and technology solution that focuses on individual people, not groups of personas, brands can deliver the type of personalized experiences that build long-lasting brand loyalty.

In other words, put yourself in the shoes of your customer. And ask what that shopping cart means to you.