Marketing personalization 101

Published Mar 5 2024 Last updated Mar 30 2024 8 minute read
personalized marketing
  • Sean Dougherty
    Written by Sean Dougherty

    A copywriter at Funnel, Sean has more than 15 years of experience working in branding and advertising (both agency and client side). He's also a professional voice actor.

Data and artificial intelligence are transforming the marketing industry, altering how marketers launch and manage campaigns — and it can be easy to get caught up in all the noise.

While it's encouraged to stay informed of the latest trends, some concepts tried and true tactics remain relevant. Personalization is one such example. Just take it from Jeff Bezos way back in 2000:remain relatively unchanged concerning their intent. Personalization is one such example, which is apparent based on what Jeff Bezos said in an interview back in 2000: 

"Personalization is when you go into a bar and sit down, and the bartender puts a whiskey in front of you without having to ask what you want." 

Whether you know your regulars' drinks of choice or send your customers personalized product recommendations, you're engaging in tailored, automated marketing

While this concept isn't revolutionary, technological advances are transforming the applications and possibilities. Many brands are prioritizing personalization, and customers are becoming accustomed to it. They want to feel valued and understood. So, make it a part of your ongoing marketing strategy or else you risk being left behind. 

Regardless of your current goals — whether you're striving for higher conversion rates or increased customer engagement — here's why personalization must remain top of mind and how you can get started.

What is marketing personalization?

The data is clear. Marketing personalization helps drive performance and more optimal customer outcomes — all while reducing costs. McKinsey reported that personalization can reduce customer acquisition costs by as much as 50%, boost revenue by 5% to 15%, and increase marketing ROI by 10% to 30%.

But at its core, what is personalization in marketing?

Marketing personalization is a strategy that uses data to target (or retarget) leads with messaging that speaks directly to that customer, focusing on demographics, interests, and purchasing behavior. 

The idea is to craft messages that seem like they were made for that individual — which is where the concept of "one-to-one marketing" came from. 

For many, it's a welcomed approach, especially when receiving personalized recommendations — a tactic companies like Amazon, Netflix, and YouTube do well. These suggestions are generated based on data, such as what you purchase, search, or watch. An algorithm suggests videos and products you're likely interested in, creating a more individualized experience. 

However, this is just one example, as marketing personalization applies to any industry that aims to deliver a personalized user or customer experience. As long as you're collecting and storing quality customer data, you can implement a successful personalized marketing strategy.

Personalization requires planning

Marketing personalization matters more than ever, as consumers now expect tailored experiences. So much so that 88% of shoppers say the experience is as important as a brand's product.

Data shows that over 70% of consumers expect companies to personalize interactions, and 76% get frustrated when this doesn't happen.

But what about brands that just plain get it wrong?

According to results from a Gartner survey, 55% of consumers will stop doing business with (and 60% will outright block) a brand engaging in invasive personalization.  

So, as a brand in today's competitive business landscape, you're expected to understand your customers' unique needs and interests. When you get this strategy right, you can improve customer experiences by ensuring consistency and cohesion. 

As a result, you can enjoy everything from:

  • Increased revenue 
  • Stronger brand reputation and resulting loyalty
  • Better connections with customers — leading to greater trust 
  • Improved buyer targeting 
  • Better lead generation and retargeting practices
  • Greater return on your marketing investment 
  • Greater consistency across channels 

However, it can be easier said than done — especially if you have yet to implement marketing automation

Research shows that 85% of brands think they deliver personalized customer experiences, but only 60% of consumers agree. So, you may need to take a more thorough approach. Focus on personalization best practices, follow the latest trends, implement the right technology, and create an omnichannel strategy that interacts with customers where they are. 

To inspire you, let's explore some examples of personalization in marketing. While reviewing each example, consider how you could apply that strategy based on your business operations, customer base, and goals. 

3 examples of personalized marketing strategies

To build out your personalized marketing plan, consider the following strategies. 

1. Email personalization using customer data

Research shows that personalizing emails, incorporating your leads' names, or adding other tailored details increase the likelihood of conversion. For example, open rates are over 20% higher when personalizing subject lines than non-personalized, generic emails.

Once recipients open these emails, personalized emails also increase the likelihood that the content will be read and consumers will engage. You can increase click rates by nearly 140% when personalizing. 

Email personalization tips:

  • Segment your audience so that you can deliver relevant content. The groups you create will depend on your industry and goals, but can be related to buying behavior, age, location, etc. For example, send different emails to existing customers than to people who signed up for your newsletter, but havent bought from you yet. 
  • Use dynamic content to enhance automation, leveraging options like a dynamic first name field. Each recipient sees their name written in the subject line, eliminating the one-size-fits-all experience.
  • Send triggered emails, thanks to built-in alerts. Examples include subscribing to your newsletter, leaving items in a cart, or signing up for an account. 
  • Take your data one step further, recognizing your customers on special days, such as the anniversary date they joined your loyalty program or their birthday. You can also use this data to send product recommendations based on the recipient's browsing history. 

2. Website personalization

As of 2023, more than 70% of businesses have a website, and nearly 30% of all business activity is now conducted online. 

So, website personalization is becoming increasingly relevant. This strategy involves creating personalized experiences for your site visitors. Examples include media outlets showing videos based on where someone lives, online retailers offering coupons based on browsing history, or travel sites showing promotions based on the current weather. 

To nail this strategy, consider the following:

  • Target visitors in real time to discover audiences based on their actions on your site and any other data linked to dynamic customer profiles, such as preferences, past behavior, etc.). You can then segment audiences based on buying personas, allowing you to send more effective marketing materials.
  • While interests and past behavior matter, they aren't the only focus of website personalization. You must also personalize based on device type, investing in mobile optimization
  • Consider the time spent on your site to send the best messaging. For example, if someone spends 15 minutes reading an in-depth article, you could prompt a CTA that offers a free demo. Alternatively, someone who is clicking through features may benefit from a CTA that encourages the visitor to watch an overview video. 

3. Location-based marketing

Location-based marketing — or geotargeting — takes "meeting customers where they are" literally. This strategy uses location data to send targeted messages based on the person's location and buying behavior. So, how do you personalize content based on a geographic location?

Companies often create localized content based on a user's location. Physical stores can implement this strategy well — but so can online websites, tracking where a visitor is from. For example, if you sell e-commerce products worldwide, you could automatically localize product offerings, pricing, or your communication strategy based on the user's location (which overlaps with website personalization). 

Here are a few tips:

  • Define custom target zones, such as an event, a competitor's location, or an entire neighborhood. You can also define zones around your store to track ad effectiveness. Once a mobile user consents, you can collect prospective customer data and add that consumer to your audience. 
  • Leverage AI for tasks like determining the most effective advertising opportunities. This tactic will help you optimize ad formatting based on device type and location. 
  • Send messages to current or past customers with special offers or a cross-sell campaign. 

Personalized marketing example: Spotify Wrapped

Spotify Wrapped is an example of personalized marketing at its finest, carving out a significant competitive edge for the digital music service. The brand's product is based on a personalized experience, leveraging the power of one-to-one marketing with nearly everything it offers, giving its listeners exactly what they want — and then creating fun experiences like the much-anticipated annual Spotify Wrapped.

This personalized feature, launched in 2017, allows listeners to learn more about (and share) their music preferences and listening habits. In 2021, Spotify reported that 120 million listeners engaged. By 2023, Spotify shared this data with its over 574 million listeners, offering insight into their personal soundtracks. 

Each year, Spotify adds new features based on new data and technology. For example, Sound Town matches listeners to a city based on artist affinity and listening. Other personalized strategies and features include Top 5 Genres, Top 5 Artists, and Your Artist Messages

How to get started in 5 steps 

Whether your focus is social media marketing or you're preparing a retargeting ad campaign, there are some basic steps to consider. 

Step 1: collect and review your data 

Data is the lifeblood of modern businesses, providing opportunities for learning, adaptation, and survival. As you collect customer data related to interests, behavior, and preferences, you can then use those insights to create more relevant, personalized content.

Here are some common data types:

  • Demographic (age, location, income, gender)
  • Psychographic (beliefs, values, motivations, personality)
  • Behavioral (browsing history, social media interactions, purchase history)
  • Contextual data (time of day, device, location)
  • Predictive (data used to make predictions, using tactics like machine learning algorithms)

Collect your data surveys, direct observations, analytics services (like Google Analytics 4), social media monitoring, transactional tracking, etc. 

To optimize this process, opt for a marketing data hub that combines all your data for a more centralized view. 

Step 2: segment your audience 

Data provides insight and a stepping stone toward audience segmentation — the golden ticket for tailoring messages and building stronger connections. 

This process includes several tactics, like developing buyer personas or creating personalized experiences based on single data points. For example, if you own an outdoor company, you could target past customers who purchased a certain product. Maybe they bought a camping stove that provides a cross-selling opportunity. If you're launching a line of compatible devices, you could send out an email campaign targeting those who would find this info relevant based on their history, interests, and needs. 

Another way to use segmentation, is to segment based on customer satisfaction. The raving fans of your brand probably need a different approach than the people who are unhappy with the level of service they are getting. So if you run a customer satisfaction survey, make sure to use that data.

Step 3: choose a format and channel

Once you have your segmented audiences and the data you want to focus on, select a format and channel to reach the intended audience. For example, do most of your customers live in Florida and prefer Instagram?

If so, invest in Instagram ads targeting those who live in Florida — or focus on a more specific city.

Each format and channel has strengths and limitations, so you must prioritize your content goals, brand identity, and audience preferences. If you want to showcase your brand's expertise, a blog post or podcast may be best, whereas video or social media marketing can highlight your brand's fun, creative side. 

Stay compliant regardless of what you choose, whether it be SMS or email. Consent-driven targeted marketing requires you to understand what regulations apply to you, ensure consent, and use transparent communication. 

Step 4: craft compelling content

Once you know who you're talking to and why, it's time to create content that resonates with your audience. The type of content you craft will depend on your audience, chosen format/channel, brand identity, etc. Again, let your data guide you.

Create customized content that speaks to your various personas at each stage of the customer journey — leaving opportunities for individualized content via dynamic content (sending a birthday message, personal recommendation, etc.).

Step 5: test and improve 

Monitoring your personalized content will help you pivot when needed, boosting the overall ROI of your campaigns.

For example, if you're personalizing landing pages and using varying hero images depending on location, measure personalized marketing efforts and look for opportunities to improve the content.

A/B testing is a powerful tool that can help you compare different versions of your content, helping you see which generates more clicks or higher engagement levels. For example, you could create two identical web pages except for your call-to-action (CTA).

This step is a continuous process, and when done right, you will make the most of your personalization efforts. You'll also improve the customer experience, validate assumptions, and boost conversions.  

When to avoid personalized marketing

Despite all the advantages, sometimes, personalized marketing isn't the best option. 

Suppose you work at a startup and are still working on the basics of your marketing strategy. Then, focus on that. Focus on determining your market and ideal customer, positioning, and proposition. Consider personalization in marketing primarily as a tactic you'll get to learn at some point — but not as part of your company's opening marketing strategy.

Also, the whole concept of being able to "walk before you run" applies here, too. If you're not ready and don't implement the right strategy, you could do more harm than good. In some cases, you may sink a chunk of your marketing budget without getting results — or worse, harming your reputation because you overdo it, send irrelevant content, or breach customer privacy. 

There are several reasons why personalization goes wrong, which you must be aware of:

  • Investing in the wrong tech stack
  • Lack of resources 
  • Complexity of data that is misunderstood and underutilized 
  • Treating personalization as a one-off instead of an ongoing process

Marketing personalization next steps

The age of big data is driving the future of personalization, which is why so many are investing in a customer data platform (CDP), data visualization tools, and a marketing data hub

Choosing the right tools and platforms will remain imperative concerning successful marketing personalization strategies — especially as you scale. 

You need the right data at the right time, so invest in a platform that automatically organizes complex data for analysis. This investment will boost efficiency and productivity as you benefit from a single, unified view of large data sets. 

While personalization has a place in every marketing strategy (at some point), there is no one-size-fits-all approach. So, don't overthink it. If you start small and scale up, lean on your data, and adjust tactics over time, you'll join those already enjoying the perks of strategic, data-driven marketing personalization.

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