Let’s get personal for a moment. The days of marketing to mass groups are are on their way out.
Companies have shifted focus of customer interaction and messaging to the individual customer through personalisation.
NB: This is a viewpoint from Dave O'Flanagan, CEO of Boxever.
To understand this shift and why it’s happening, it’s important to first know what personalisation is and is not.
Personalisation is the tailoring of content, goods, services and any other products from a company, to significantly and directly relate to a specific individual.
It is not merely changing names in a letterhead or email subject line. It is the ability to reach out to a single customer, draw them in, relate a message to them, and, most importantly, build a relationship with them.
The reasons and returns
One-to-one marketing has skyrocketed for a few reasons. First, it helps customers wade through an abundance of information and content that floods them.
Second, the software and data are now readily available. Companies used to have a much harder time personalising messaging because the tools weren’t there. Today, most content management systems include some form of personalisation functionality.
The third, and biggest reason for this personalised approach, is that it yields high returns on investment (ROI). In one study, more than eight in 10 consumers say that personalised marketing has some impact on their decision to purchase. Worldwide internet advertising spending is estimated to reach $137.5 billion (USD) this year, according to eMarketer.
In 2013, for the first time ever, online advertising exceeded broadcast television advertising. That’s not only because online advertising is easy for companies to to maintain and track, but also because it can easily be targeted – and retargeted - to specific audiences and even individuals.
And that’s just online advertising. Email is currently one of the largest marketing tools currently used. Epsilon’s 2013 email trends and benchmarks study found that 54% of emails sent by businesses are marketing messages. That’s because email marketing yields a high ROI.
In a 2013 report by the Direct Marketing Association, email marketing yielded an average 4,300% return on investment.
Much of this is due to email’s ability to be easily personalised – in the subject line, body copy and offers and the call to action.
According to a 2013 Market Email Study by Experian Marketing Service, personalised subject lines related to 26% higher unique open rates.
The study also shows that promotional emails had 29% higher unique open rates and 41% higher unique click rates.
For triggered email campaigns, personalisation resulted in double the transaction rates compared to non-personalised triggered emails.
An even larger return
Another reason ROI remains so high when companies used personalised tactics is because the cost of doing so has dramatically dropped in recent years. It’s also become much easier to manage and maintain – all thanks to big data.
A recent article by SocialFish states: “at the heart of personalization lies big data, and using big data harvests tremendous results.”
Data allows companies to research and study their customers to apply the most useful and significant messages to them. And the results are evident.
According to IBM Big Data Success Stories, companies that have taken a vested interest in data and analytics increased revenue growth by 49% versus companies that didn’t invest at all.
Also, companies that made use of that data to target customers also had an ROI of 30% higher.
Big data and personalised messaging aren’t only creating higher ROI, but a better consumer experience, which leads to loyal and repeat customers. And that’s the most valuable return on investment.
NB: This is a viewpoint from Dave O'Flanagan, CEO of Boxever.
NB2: Individual image via Shutterstock.