Editor’s Note: We asked Mike at Sailthru to help us understand the difference of segmentation and personalization, and how we can implement those strategies with automated marketing platforms and a cross-channel approach. Here’s what he had to say.
Mike O’Brien is a content marketer at Sailthru, where he writes about email, personalization and how technology is shaping the future of retail and publishing. Connect with him on Twitter and LinkedIn.
Sailthru strongly believes that personalization is a key business strategy. However, when we surveyed marketers in the publishing, retail and commerce space, we were shocked to find that while most marketers (61%) agree that it’s critical strategy, there are 39% that only consider personalization to be a tactic.
That made us wonder if marketers are mapping personalized marketing plans within the context of the greater customer experience. Likewise, it’s critical that retailers plan for user experience improvements with personalization in mind.
Rather than making incremental improvements in the customer experience, personalization requires a forward-thinking approach. Look toward the future and work backwards from there. If your efforts aren’t part of a larger plan to connect your channels and personalize the entire experience to drive long-term customer value, you may need to re-prioritize.
In the end, the decision of what to prioritize comes back to two things:
- Will the output allow you to better achieve your goals?
- Will the output give your customers a better experience?
With personalized automated marketing, retailers can achieve both, highlighting the symbiosis of personalization and improving the customer experience.
Differentiating Segmentation and Personalization
The short answer: They’re different, but equally important.
Marketers segment customers based on demographics and behaviors. For example, women who have engaged online in the last 30 days. Or men from a specific region who are predicted to purchase within the next week.
On the other hand, personalization isn’t about a group. It’s about creating an experience that’s unique for every individual. For example, this may be best understood in a real-life store situation. When a clerk recognizes you and makes suggestions based on what you bought last time. The clerk brings you items well-suited for your taste or your budget on a personal level. That is personalization. your customer when they login to their account and making suggestions based on purchasing or browsing history. This shows that you are bringing items well-suited for the person on a personal level — items in their price range.
You can personalize without an incredibly robust segmentation strategy to increase engagement and results from email, web, mobile, and now direct mail. Providing personalized suggestions based on purchasing history and client data can result in significantly outselling your competition.
Think of personalization and segmentation as strategies with unique, but related maturity curves. Within an email newsletter that goes to your segment of customers who have not purchased in the last 30 days, you might personalize recommendations to every individual in that segment based on recent additions to your product line or seasonal trends based on what that specific individual has historically browsed. Every person in that segment gets a different mix of products, but how you personalize is based on your specific goal for the segment. In this case, that’s re-engagement.
Analyzing Data to Personalize Customer Experience
There are two separate items you need to know: What data to collect and how to analyze it.
As far as what to collect, the best data sets — a mix of demographic, behavioral and interest data points — drive personalized marketing. You want explicit data on who the customer is, and where, when and how they engage. This includes channel preferences, purchase history and time of day, among others.
Both explicit and implicit interests are critical to offering a relevant experience. Finally, the ability to predict what someone will do next — whether that’s open an email, make a purchase or (God forbid) opt out — will help you personalize to promote or detract from specific outcomes.
In terms of analysis, it’s critical to move beyond campaign analytics and take a long-term vision approach by analyzing customer cohorts. That way, you know what is most effective in delivering both short-term wins and in making long-term gains.
Sailthru is a proud Inkit partner, bringing personalization to the next level by hitting actual mailboxes with hyper-personalized direct mail. If you’re still wondering how you can strengthen your personalization strategy to improve revenue and retention, then see how you can integrate a direct mailing component with your online customers for deeper personalization.
Learn more about Sailthru’s integrated solutions for email, mobile, web and their partnership with Inkit direct mail here.
Are you ready to improve personalization strategies for retention and loyalty?