In the highly competitive world of business, companies are constantly searching for ways to gain an edge and stand out from the crowd. One of the most effective ways to achieve this is through personalization. As consumers become increasingly discerning and demand more tailored experiences, companies realize that a one-size-fits-all approach simply won’t cut it. Personalization has the power to transform the customer experience, driving sales and revenue, boosting conversion rates, and fostering customer loyalty.
Even more powerful than just personalization is the idea of contextual, real-time personalization — that is, not just making advance decisions about what message a customer will see the next time you interact with them, but being prepared to make a decision during a live interaction about what personalized message to present. In a 2021 Study, McKinsey found that while personalization drives performance and better customer outcomes, only 47% of companies offer personalized experiences based on live consumer data. So what’s the problem?
Why is real-time personalization important?
While lots of people talk about marketing personalization, and real-time personalization, these terms can mean different things to different people. Some marketers may focus more on inbound communications, others on outbound marketing, and others may focus on a specific channel like email or website interactions. The truth is, many marketers focus on just one dimension, failing to understand the full scope of what real-time personalization means.
Customers have grown increasingly overwhelmed with outbound marketing offers and, consequently, the effectiveness of traditional outbound marketing campaigns has significantly declined. The ability to connect with customers on their own terms — during those moments when customers and prospects contact you — can dramatically improve the effectiveness of your marketing efforts.
With real-time personalization, you can:
- Increase response rates in inbound channels by maximizing the relevancy of messages presented in real-time
- Improve each customer’s experience by personalizing their interaction with your company
- Maintain a consistent dialogue with customers across all channels
- Achieve better overall marketing results, including increased sales and revenue, improved online conversion rates, and strengthened customer loyalty and retention.
The following are just a few documented benefits real customers have experienced through real-time personalization:
- 4x response rate from website offers selected in real-time, not calculated • 500% increase in click-through rate
- An increased cross-sell success rate from under 10% to more than 40% in call centers and retail shops.
- 200% increase in sales attributed to offers printed on receipts at the point of sale.
- More personalized offers are delivered in a week during inbound interactions than previously in a year with only outbound campaigns, with higher response rates.
To achieve everything we have mentioned and dominate your industry, there’s one thing you simply cannot overlook: your customers. It’s not enough to just know their names and where they live. You need to dig deeper and understand their wants, needs, and behavior.
Who is the customer/prospect (and how much do we know about him?)
The most effective real-time personalization solution leverages two kinds of information:
Identity — information about each individual customer’s identity and such details as demographics, psychographics, account details, purchase history, social network relations, and so forth. Most of this is the typical information found in your customer database.
Behavior — information about how the person is behaving during the moment of interaction, for example: where a person has been on a website during this visit; location as identified by a mobile device; reason for calling as explained to a call center agent; or products about to be purchased in a store.
However, most personalization approaches leverage one kind of data more than the other.
Personalized email leverages identity information; it can’t take advantage of behavior data because there is no live interaction. The opposite is true for product recommendation engines; they generally take little into account about who you are, instead focusing on what you are doing (for example, what products you are looking at or have put in your basket).
Some forms of personalization, such as online behavioral advertising, do a better job of mixing identity and behavior. The most effective approach to personalization will be one that leverages both kinds of information. By considering both a person’s identity and behavior, you can target the right message to the right person at the right time. This approach is truly a win-win, providing your customers with attractive and relevant offers and improving your chances for a successful conversion.
The next question that might arise in your mind is so how do you do it? There are 2 different approaches to how the decision is made – The Deterministic approach and the Predictive approach. Certainly! In part 2 of this blog series, we’ll delve even deeper into these two approaches, so keep an eye out for it.
Unica empowers companies to meet the multi-dimensional aspects of real-time personalization — addressing the who, what, where, when, and how. Our solutions, like Unica Interact for real-time personalization, can help you take better advantage of moments when your customers and prospects choose to interact with your company.
Looking for more information or have a question? Don’t hesitate to reach out to us – we look forward to hearing from you!