In North America alone, about $22 billion in industry sales shifted from large to smaller companies from 2011 to 2016. These smaller companies have successfully identified and acquired niche audiences by building personalized products and communications that resonate with those audiences. According to Gartner, brands that fully invest in personalization will outsell peers that have not by more than 30%.
Personalization is a popular topic in the marketing world, but we have an opportunity to bring a lot of the tools and methods we currently use for personalization into the product development process—what we call a pre-launch personalization approach.
Impact of Personalization
Broadly known as customization, personalization consists of tailoring a service or a product to accommodate specific individuals, sometimes tied to groups or segments of individuals. In its most specific format, personalization can achieve 1:1 marketing.
Personalization is very important as it can reduce acquisition costs, lift revenue, and increase the efficiency of marketing spend. Small businesses have taken advantage of this impact as industry sales are moving from larger to smaller companies. The reason such a shift is taking place is due to the fact that smaller companies have the ability to focus on micro-segments and gain a more intimate understanding of their customers. For example, Dollar Shave Club has taken a large chunk of sales from Gillette with such a strategy; Happy Family Organics has also seen a similar result in competition with Gerber.
Whether a brand is big or small though, developing new products should start with a foundation of personalization. Most of us agree that the driver of increasing marketing spend is big data analysis used for customer expansion. But leveraging this earlier on in our processes can have many benefits.
So how do we take personalization and bring it forward to impact product and communications development? It starts by redefining today’s process of
- Identifying a target audience
- Building a product around unsatisfied needs relative to a category
- Creating communications for the audience
- Activating and reaching the audience
Today much of the marketing spend for personalization is focused on the activation, or last step of this process. Yet, dollars for analytics tools are usually coming from the market research budget. To apply personalization during the typical market research process, we start by combining multiple sources of data.
Specifically, by combining stated or survey data with big data or observed, behavioral data during the phases when we are identifying audiences and building products makes it easier to reveal insights that make personalization possible. More importantly, starting our personalization approach at this earlier stage helps natively connect insights to media planning.
To learn more about how you can start your personalization strategy well before communications, watch the webinar below. You’ll also walk through two case studies that show at a high-level how this approach works and how it truly modernizes personalization. These case studies also show how you can
- Find a meaningful audience to drive your business growth and personalize your messaging and creative to drive purchase behavior
- Identify key behavioral data to help you more effectively message to your target audience
- Establish a more holistic data approach