Personalization is No Longer an Option

Demand for personalized experiences from consumers with brands are increasing. 76% of consumers get frustrated when their interactions are not personalized and 71% expect it (McKinsey & Co.).  Personalization is a topic that we have written about before but its importance is ever increasing and cannot be denied. Purchasing decisions are now progressively being motivated by it. It can increase brand loyalty, customer retention, engagement and overall ROI. Turns out, it can even increase revenue if companies exercise the opportunity to approach personalization properly with the long term in mind. Here are some things that top performers of personalization do.

1.     Look at personalization as an opportunity. This is where you can determine where there is the most value using insights from customer behaviors. Use 1st party data to collect this information.

2.     Agile operating business model. Employ teams to handle each specific step of the personalization journey of your customers. Divide them into groups such as marketing, products, tech, etc.

3.     Balance of privacy and personalization. 48% of consumers say they trust brands to keep their personal data secure and use their info responsibly (State of Personalization Report Twilio, 2022). Using 1st party data to get information about your consumers is the safest and most responsible way to collect. It’s also easier to manage because the brand owns it and it provides higher quality data.

People now expect their interactions with brands they love to be personal. Brands must rise to the occasion to ensure that each individual feels as if they are being catered to, no matter how large-scale the company may be. Failure to do so can result in loss of consumers and overall revenue. Stay ahead of the curve and treat your audience like they’re business is important to you because it is. There is a person behind every purchase, behind every screen. Fostering these relationships is the way to building a successful brand.   

Personalized Advertising

We all know the eerie ad that pops up while scrolling through the gram based on a conversation you just had with a friend. This is what is called a personalized advertisement. Companies are investing a lot in this type of advertising now but should they be? Personalized advertising works by using online user data to target users with relevant advertising based on their searches, purchasing history, and now even face recognition to determine the users age, race, gender, etc. Let’s face it, we know that our phones are listening to every conversation that we have. That is definitely some Big Brother stuff. So, what do the numbers say about these types of ads? Well, “companies that use advanced personalization see returns of $20 per 1 cent!” according to a statistic on Startup Bonsai. Therefore, from an advertising standpoint it does have great ROI. However, people do find it creepy when they see a retargeting ad on social sites for items that they have browsed, 35% to be exact (Startup Bonsai). And according to Pew Research, “68% of people view online targeted advertising negatively; they’re averse to targeted ads because they don’t like having their online behavior tracked and analyzed.” BUT, in that same breath, people do want their consumer experience to be somewhat personal and actually, “60% of Millennials said that they would not hesitate from sharing personal information to suit their personal interests” (RRD). It seems to be more of an issue of having their personal information taken without consent in order to tailor their consumer ad experience. Let’s look to Netflix as an example. Users have the option to thumbs up or down the shows that they watch in order to receive a more personalized recommendation to their likes and dislikes. Consumers like this feature because it is of their own accord. That being said, Google has a strict policy regarding personalized advertisements that restricts the use of sensitive interests, clinical trial recruitment, gambling, and more. What is the solution here then? We honestly don’t know but personalized ads do seem to have more ROI than non-targeted advertisements. Although people don’t seem to love the idea of their data being taken and analyzed, they do prefer a more personalized approach when it comes to brand advertising. Seems that some middle ground should be determined in order to please consumers and advertisers alike. We may not know what that looks like just yet but hope to see some compromises in the coming years surrounding privacy.