Why Personalize? It Works.
Ginger Conlon, Editor-in-Chief, Direct Marketing News
Customers with high expectations are ubiquitous. The other night I hurriedly dished out some ice cream for my daughter, Claudia, and myself. I was in a rush to get back to what I had been working on. As I handed Claudia her bowl, her enthusiastic thank you was followed quickly by a disappointed, “Hey, where's the whipped cream and sprinkles?” In my rush I had neglected to “personalize” her dessert based on her known preferences.
Marketing is just like that.
Once you've shown that you know a customer—and sometimes even before that, based on her experiences with other companies—she expects you to use that information when you communicate with her. Generic messages, like ice cream without the trimmings, dissatisfy engaged customers. (You know, the ones who tend to be most valuable.)
Personalization is what captivates high-value customers. And I don't just mean using “Dear Ginger” in a message. Personalization today takes many forms. Of course, messaging is an obvious, common place to personalize communications. Other forms are channel and device, context, and timing (including frequency). One way not to personalize is to add “or current resident” after a customer's name on direct mail labels. The perception of a recipient of mailers, usually catalogs, with that message is that she's not valuable as a customer, that she's interchangeable: “Any customer will do, really, so why bother putting my name on it at all?”
Conversely, when customers receive messages that are personalized, thus relevant in some way, the response is more along the lines of: “This company not only says I'm a valued customer, but also shows it by addressing my specific needs and preferences.”
Show me you know me
As NectarOnline Founder and CEO Amrit Kirpalani points out in “Hyperpersonalize. Your Customers and CFO Will Thank You:” “We've seen brands add from 2 to 5% margin points by personalizing communications.” And as Sparked Managing Director Joseph Pigato notes in “Marketing With a Tailored Fit:” “According to eConsultancy, 68% of marketers using personalized communication report a boost to their marketing ROI.” On the other hand, he says, “Every time a consumer sees an irrelevant email, ad, pop-up, app, or text message, the consumer becomes desensitized to the company's communication. This leads to a consumer base that is habituated to not open the company's messages and feels less positive about the company.”
Think of your own experience as a customer. When you receive an email or are served a display ad that's relevant to your interests, your reaction is more likely to be “good thinking” than “what were they thinking?”
Those positive feelings translate into real business value in terms of retention. “Thunderhead.com research notes that 87% of customers feel positive about a business that puts to good use the information and data it holds on its customers,” Thunderhead CEO Glen Manchester writes in “Customer Knowledge Is the Foundation of Marketing Success:” “One in five of the customers surveyed…[said] a one-size-fits-all approach would result in their consideration to change provider.”
Engaged customers give you their business, their referrals, their loyalty. Personalization is one way to give them their just desserts.