Which is worse? A brand that knows nothing about you – or a brand that knows too much?
In the modern marketing landscape, customer expectations are higher than ever. With every brand on the planet just a Google search away, marketers are constantly looking for a way to connect with their audience. While there are a myriad of ways to do so, one of the most popular methods is through personalized marketing, where consumer data is leveraged to create customized messages and tailor user experiences.
From providing targeted recommendations of key products and services to showcasing an interface that records a history of previous actions, personalized marketing can be immensely useful in helping a customer feel seen, heard and respected. However, leveraging user data for marketing campaigns can be a double-edged sword, and there are several drawbacks and limitations that should be considered when developing how your brand interacts with the world.
On the positive side, personalized marketing can be extremely effective in terms of engagement and purchase intent. Some studies have found that up to 76% of consumers are more likely to make purchases from brands that personalize, with 78% also being likely to make repeat purchases and, perhaps most importantly, recommend the brand to others. This, in turn, improves conversion rates and builds brand loyalty, resulting in up to 200% ROI reported by marketers using advanced personalization.
However, even though these processes can boost sales and reduce conversion costs, that does not necessarily mean they are cheap or easily accessible. Developing campaigns and interfaces that support personalized messaging, as well as collecting enough customer data to inform them, can be expensive for growing brands. Even more so for those looking to go beyond the more simplistic generalization methods such as placing someone’s name in an email. Lack of budget can often be a significant barrier to successful personalization for a marketing team, so it must be considered whether or not your brand has the funding to engage in personalization properly.
In addition, while many customers greatly appreciate the relationship that personalization can provide, that is generally only the case when the information gathered is applied properly. It is not uncommon for brands to get user information wrong and certain forms of personalization or excessive requests for user data can register as “creepy”. Horror stories of the misuse of consumer information to unusual extremes are plentiful, such as Target famously predicting that a teenager was pregnant before she informed her family. Finally, the ever-present issue of data leaks also exists, and consumers are increasingly concerned about the amount of data being collected by businesses and how it is being handled.
It can be tempting to simply gather as much information as possible about a consumer and start bombarding them with personalized content. But if a customer finds this approach unsettling, or if the information isn’t actually correct, brands can lose billions of dollars. While the proper use of personalization will generally be beneficial for both the brand and the consumer, improper use or inaccurate information can potentially be worse than no personalization at all.
As with most topics in the marketing world, the question of how your messaging should be tailored to the consumer has no one-size-fits-all solution. The level of personalization required will be different for every brand and some industries will find it more helpful and successful than others. No matter the level of personalization a brand decides to implement, it should be naturally incorporated into a strong marketing strategy, and careful care must be taken to ensure that the data collected is accurate and properly applied.
To learn more about how to implement personalization for your brand, please reach out to Barbara Wray at barbara@wickmarketing.com or (512) 564-4289.
