Personalization is hot topic and 1:1 personalization is even hotter. The truth is 1:1 personalization is over-hyped by providers trying to differentiate their solutions. What matters most to your audience isn’t your ability to target them as individuals, but instead your ability to make the feel like you understand and support to their individual needs. Personalization is about relevance, which doesn’t require 1:1 bespoke marketing. It takes segmentation.
We’re All Special. None of us is Unique.
Customers’ needs, while special, aren’t totally unique. They can be predicted. For example, I live in Chicago where it’s cold most of the year. A retailer could predict, particularly in January, I’m more interested in sweaters than a swimsuits. That doesn’t take 1:1 personalization. It takes location data to recognize I’m in Chicago. It involves rules that align location, time of year, weather and product images, at scale. And it requires tagging to filter millions of SKUs and serve up those with the right attributes. But it doesn’t take 1:1 personalization. I’m special, but I’m not unique. I’m part of a geographic segment of 2.7 million Chicagoans who don’t want to freeze by wearing swimsuits in January.
But wait! If a retail site uses location based targeting to recommend a sweater it’s possible I could see the same sweater as my neighbor. Who cares?
Consumers aren’t focused on how well you differentiate their experience from someone else’s experience with your brand. They aren’t even aware of the next person’s experience. They are concerned with how well you deliver an experience that is relevant to their wants and needs. While those wants and needs are special, the can also be common across groups of consumers or segments based on lifecyle, location, gender, brand relationship and more. This applies to business buyers, as well, where segments can be defined by industry, function, role, company size and region, past purchase behavior and more.
It Don’t Mean a Thing If It Don’t Scale.
Personalization is not a goal. But it can help you reach critical business and marketing goals, like increasing purchase, improving engagement and deepening customer relationships. All of those goals imply the need for scale. Personalization efforts are only as effective as their impact on customer behaviors and business outcomes. Techniques and tests that take marketing and digital commerce teams hours to build and even longer to measure and optimize will fail to scale. A hallmark of personalization is testing, lots of testing. This means teams need to be able to adopt and use tools to set-up and conduct multiple, concurrent tests on an ongoing basis. Time and complexity stand in the way. Segmentation offers a simple, yet flexible way to test and target audiences.
There are other reasons scalability enabled by segmentation is crucial.
Since customers are special, personalized marketing , digital commerce and customer experience must be designed to respond to their changing needs. Sure, I live in Chicago where it’s cold most of the year. But occasionally we vacation. My web browsing and online shopping patterns throw retailers for a curve as I shift from buying hats and mittens to purchasing flip flops and sunscreen. Adaptability to changing behavior–in real time, at that–takes scale. This is not for human hands. It is the meeting of man and machine. It doesn’t depend on 1:1 personalization, but rather milliseconds of event processing to register the change and predictive modeling to forecast the right product or offer–based on past, present and predicted behavior of many–not just one.
If you’re running a general store and selling to 10 people, 1:1 personalization is reasonable. Otherwise, your job isn’t to figure out how to individualize millions of experiences. Your job as a marketing leader is to figure out common attributes and behaviors that shape consumers wants and needs and respond to the signals they send as their wants and needs change. Use this week’s analyst picks to find best practices on segmentation and targeting by segment and persona, including a case study by a leading B2B supplier. Take a look at the headlines for practical advice and examples of brands using segmentation to personalize marketing and applying advanced techniques and emerging technologies, like AI, to increase the effectiveness of segmentation.