Why is Personalization Important in Marketing?

Have you ever experienced that sensation of hearing someone call out your name in a crowd, and your head instinctively snaps around to find the source of the voice? It’s almost an involuntary movement, like a knee-jerk reaction.According to a study published in a scientific journal called Brain Research a few years ago, this is because the sound of your own name (or sight of it on paper) triggers something in your brain, and stimulates higher brain activity.On a primitive level, this reaction is useful for capturing each other’s attention in a crowd. On a marketing level, this is invaluable for drawing attention to your brand and its products.

In a nutshell, personalization is when a business tailors its content to engage a customer in such a way that the customer feels like their personal tastes, preferences and requirements are being considered.

There’s no limit to the ways in which a brand can do this, and we’ve covered how receipt scanning technology can make personalization a breeze for business owners in a separate article.What it all comes down to is data. By accumulating data on each customer’s spending habits, brands can divide their customer base into segments, and tailor their marketing for each segment, in order to offer a more personalized experience.But enough about how to do it (you can learn more about that here). In this article, we’re discussing why personalization is important in marketing.

Personalization allows marketers to target specific audiences within the overarching customer base.

First and foremost, personalization is a marketer’s best friend because it allows brands to send targeted communications. By this, I mean things like:

• sending emails that address each customer by their first name
• recommending relevant products based on previous purchases
• tailoring offers and loyalty rewards to cater for customers’ unique preferences
• creating an increasingly convenient brand experience by observing each customer’s shopping habits
• commemorating customer milestones and/or anniversaries with special offers
• offering spontaneous birthday rewards
• countless other utilizations

These techniques go a long way towards fostering an emotional connection between the brand and the customer.

By singling out customers individually, brands can demonstrate that they value each customer’s business, and see them as people… not dollar signs.

Consumers expect this kind of appreciation from the businesses they shop with these days, and are willing to reciprocate – a recent Motista study found that customers who feel emotionally connected to a brand have a 306% higher lifetime value than customers who don’t. They’ll also recommend this brand 26% more than the average customer.

Image Source: The Next ScoopFrom a generational point of view, Millennials and Gen Z are proven to be more immune to traditional advertising than their parents and grandparents. As these younger generations acquire more and more spending power, brands must rethink their marketing strategies.Thankfully, 70% of Millennials are happy for retailers to track their browsing and shopping behaviors if it means a more personalized shopping experience, hence why personalization is important in marketing.

Personalization and digital loyalty programs go hand-in-hand.

Rewards programs are a great example of how personalization has revolutionized marketing forever. Loyalty schemes have evolved far beyond the traditional “Buy X, Get Y” model, and now it’s commonplace for brands to offer each customer a completely unique loyalty program experience.

Image Source: ContentstackThis is because every transaction that is processed through the rewards program provides the brand with more and more insight into what the customer wants. Digital loyalty programs have even made it possible for brands that sell their products through an intermediary to directly engage the end-consumer with personalized communications.

With personalization, brands can cut down on other marketing-related costs.

As I mentioned above, consumers are increasingly impervious to standard advertising methods. By investing in personalization, businesses can ease up on tired mass-marketing campaigns and batch-and-blast communications.

When done properly, personalization is like a snowball that takes care of itself, growing in size as it rolls down the hill.

This means brands can drastically reduce advertising costs, while enjoying higher revenue from effective targeted marketing… it’s a win-win!