A simple approach to personalization

January 31, 2020

This blog post originally appeared on our fantastic partner, ABTasty's blog. If you're in the market for personalization technology, they are the best.

Scaling up a personalization strategy can seem like a daunting task, especially when you’re starting from scratch. In fact, 63% of marketers say that data-driven personalization is the most difficult online tactic to execute. But it’s increasingly becoming the most important.

Personalization impacts everything from customer acquisition, to retention, conversion rates, revenue and so on. 91% of consumers say they’re more likely to shop with brands who recognize and remember their customers to provide relevance.

The point being: personalization is now non-negotiable for organizations (across all industries) to stay competitive. But fortunately, you don’t need endless resources to get started. A simple approach can be quite effective, and often it’s the best foundation to build upon.

Let’s cover the essentials.

Set Simple, but Specific, Goals

To successfully implement personalization, you need to set clear goals. Otherwise, you can lack focus and miss key data points from not having a specific (team-wide) vision. Here are some common KPIs to consider:

  1. Increase engagement (more clicks, open rates, etc.)
  2. Increase time on site or deeper content consumption on site
  3. Increase revenue (more transactions, more up-sell and cross-sell opportunities)
  4. Increase customer loyalty (higher percentage of returning customers, etc.)

Start with Broader Segments

The prospect of segmentation can seem daunting and costly, but you don’t need to do advanced analyses to segment data or use expensive third-party data to get started.

In fact, a common mistake with personalization is over-segmentation. While there is a push for hyper-specificity in customer experiences, taking too granular of a perspective in these early stages can limit both the results and your understanding of your customer base.

By starting with broader segments, you can start to analyze trends and gradually create more customized experiences.

The following four categories are the most common starting points for audience segmentation and are often used in conjunction with each other.

Geographic Targeting

Geographic targeting focuses on a user’s location, which could mean the region, country, town or city they’re currently in.

Mobile devices, like smartphones, have made geo-targeting an even more important tactic for businesses. Between 2015 and 2017, for example, mobile searches that contained some form of “can I buy” and “near me” rose by 500%.

Some campaigns that you can try running with geo-targeting include showing specific content based on your target’s headquarters location, promoting products based on weather (e.g. snowplows in the winter, lawnmowers in the summer) and displaying content in local languages and using local currency for international businesses.

Behavioral Targeting

Behavioral targeting is based on a user’s online actions. For instance, products they’ve viewed, frequency of visits to specific pages, order or content history, and so on.

Behavioral targeting can be applied in various ways, which include:  tailoring email newsletters or content on a webpage based on previous articles/web pages visited and recommending specific products to visitors based on their previous purchases (e.g. color-safe shampoo to users that have bought hair dye).

Demographic Targeting

Demographic targeting relies on data like age, income, gender, nationality. Often, the best results come from pairing demographic data with other categories, like behavioral, since this creates a more comprehensive view of customers that avoids stereotyping. However, demographic data can still be effective on its own, when used thoughtfully.

For instance, there’ve been numerous studies on the different buying habits between generations. One study found that Gen Z is more likely to look for travel destinations that offer lots of outdoor activities and best-kept-secret type of adventures.  Knowing this, travel companies can target Gen Z with trips or activities that fit these criteria.

Psychographic Targeting

This form of targeting is a bit more complex than the ones mentioned above. It’s more lifestyle-focused, looking at an individual’s interests, hobbies, and values. The goal is to get a more comprehensive idea of who the customer is and why certain products or offers appeal to them.

A common way to understand the psychographics of your audience is through surveys and gaining customer feedback, but it can also be done with Google Analytics or even social media analytics. With this knowledge, you could run campaigns that resonate with your audience because it speaks to their motivations. Think of the more personalized experiences a meal-kit service could create for customers if it knew their dietary restrictions or personal preferences (vegan, pescatarian, etc.).

Final Thoughts

As customer expectations continue to grow when it comes to relevant experiences online, the need for organizations to embed personalization into their digital strategies is becoming more and more crucial. But this doesn’t have to be intimidating. Most of the data required for the tactics mentioned here can be found in your basic Google Analytics setup.

Remember that personalization is an ongoing process, and its efficiency is tied to its momentum. Leverage the insights of each campaign to gain a better understanding of your leads and provide more nuanced dynamic experiences. By partnering software with strategy, you can then accelerate the frequency at which you launch and analyze personalization campaigns to keep pace with shifting trends in user behavior and digital technologies.

AB Tasty is a customer experience optimization company and fantastic Mighty & True partner. They help brands (and agencies) build better user experiences and unlock new levels of possibilities, faster.