Customer segmentation 101 Learn the tricks of the trade

Today’s consumers expect personalized marketing, and brands who use data-driven campaigns to tailor content to their interests are seeing the results.

Figures from Salesforce reveal high performing businesses use data-targeting and segmentation 51% more than underperforming businesses. It stands to reason. Our latest research reveals:

34% of consumers would be motivated to promote their favorite brand online with content that’s relevant to their interests.

And with 3 in 4 online adults purchasing products online each month, customers not only expect personalization today, they value it.

What is personalized marketing?

Creating personalized marketing and experiences has everything to do with good quality data and the way you use it.

Brands combining consumer data with advertising technology are delivering individualized messaging, products and experiences to consumers in more innovative ways than ever.

Compare the classic example of simply addressing emails to consumers by name, to this colorful and eye-catching email sent by Lyft. Aside from the visual appeal, the email proves the brand knows exactly how its consumers like to use its services.

Personalization tactics can be deployed in a number of ways, and some are more obvious than others. Improved technology, algorithms and the way data is collected and analyzed mean these tactics are becoming more subtle, and better ingrained.

Today, we’re seeing more and more brands providing distinct web and mobile experiences for each of their customers. This is happening a lot in the ecommerce space, where content and offerings display differently depending who’s on the receiving end.

Some consumers might not even realize how many websites are purposefully displaying more of what they’re interested in.

The benefits of personalized marketing

When it comes to the benefits of personalization, much of it has to do with convenience.

What’s more effective than providing your audience with experiences that are tailored to them?

The number of options available to consumers can often be overwhelming. Personalized marketing helps bridge the gap between an endless abyss of choice on offer and the needs of consumers.

Brands who present their consumers with highly-targeted suggestions can help consumers save time and effort, driving customer loyalty.

These brilliant examples of one-to-one marketing prove the value in getting to know your audience and using personalized marketing to its full potential.

1. Amazon

Amazon’s recommendation algorithm consistently makes headlines for its strategic approach to personalized marketing.

Continually being updated to create more tailored experiences, the tool suggests products not only to fit the individual, but different aspects of their personality.

Cleverly encouraging impulse buying by highlighting key tastes and products to match, it’s a tactic that pays off.

The company reported a 29% sales increase to $12.83 billion during its second fiscal quarter, up from $9.9 billion during the same time the previous year.

Takeaway: Personalized marketing isn’t just a tactic for building brand trust. When done right, it presents endless upsell opportunities for improved sales.

2. Cadbury’s

Following the success of Facebook’s personalized video, Cadbury’s chose to create its own. But instead of giving consumers a look over their past year with the brand, it spoke to customers’ personal tastes in chocolate.

The campaign, which ran in Australia, matched a Dairy Milk flavor to users based on elements from their Facebook profile, including age, interest and location. Once the user agreed to connect with the brand, a video utilizing their own content, including photos and personal information, was automatically generated.

The campaign obtained a 65% click-through rate and a 33.6% conversation rate, proving the personal touch works.

Takeaway: Personalized stories resonate, and there’s a wealth of consumer data at your fingertips to help you tell them.

3. Marie Curie

Encouraging people to collect money for the charity on the high street, The Great Daffodil Appeal was launched, gathering each supporter’s geolocation data and matching this with its database of collection sites.

This information was used to integrate a real-time personalized map in the email campaign detailing the supporter’s nearest collection sites. The charity then used modelling to derive a target population and drive persona-driven messaging based on collection history and previous interactions with Marie Curie.

The campaign boosted registrations year on year, with a high skew towards online sign ups.

Takeaway: Consumers want to know how something directly impacts them, so personalization is sure to give a message greater resonance.

4. Starbucks

Starbucks successfully keeps customers engaged with its gamified mobile app. Integrating the brand’s rewards system with the ability to customize and order drinks via the app, it makes use of information such as purchase history and location to get as personal as possible.

The introduction of the rewards system saw Starbucks’ revenue soaring to $2.56 billion, while the app has generated around 6 million sales per month (around 22% of all U.S. sales).

Takeaway: The more data you get from your consumers, the more tailored your marketing can be.

5. Matsmart

The Swedish sustainable food retailer wanted to raise awareness of its offering on Facebook. It ran a series of prospecting campaigns segmented by the main target audiences, grouped mostly by demographics, designed to drive new visitors to its website.

The retailer then ran highly relevant dynamic ads featuring different products, based on different Facebook user profile segments.

Between October 2015 and March 2016 it achieved an 84% increase in website revenue.

Takeaway: Segmenting audiences enables brands to display the most relevant products or services to the right consumers at the right time.

6. Netflix

Netflix is famous for its viewing recommendations, using an algorithm that’s consistently being developed and improved. But the personalization doesn’t stop there.

The streaming giant has a firm strategy in place for what artwork subscribers see as they browse the product catalogue. Based on previous actions, it aims to entice the right viewer to the right content.

A spokesperson said: “This is yet another way Netflix differs from traditional media offerings: we don’t have one product but over a 100 million different products with one for each of our members with personalized recommendations and personalized visuals.”

And with a top line of around $9 billion in 2016, a 30% increase year on year, it’s a strategy that’s paying off.

Takeaway: It pays to consistently develop your approach and get creative with your data.

7. O2

Looking to make their ‘tariff refresh’ ad more relevant and engaging for mobile audiences, the team used data based on device and location to tailor their messaging to their consumers.

Using this data, they could offer personalized and niche marketing ads, that showed what the best offer for that individual was, what similar users preferred to upgrade to, and where their nearest store was located.

The personalized ads performed 128% better in terms of click-through rate.

Takeaway: Understanding how consumers use their devices, in conjunction with other behavioral data, you can optimize a campaign for more impactful results.

8. Coca-Cola

The famous ‘Share a Coke’ campaign, first launched in Australia in 2012, still retains its title as one of the most original examples of personalized marketing to date.

The idea was to spread advocacy and love for the brand by replacing the soft drinks logo with consumer names, encouraging people to share with friends and spread the brand’s message using the hashtag #shareacoke.

In the wake of the original campaign, Coca Cola Co. saw a rise in sales for the first time in over a decade.

A spokesperson from Coca-Cola said: “This campaign taught us that personalization can only be highly engaging and effective if it can be shared with a wide audience.”

Takeaway: Don’t just make it personalized, make it shareable.

9. EasyJet

To mark its 20th anniversary, the brand launched a data-driven campaign that brought each customer’s travel history with the airline to life. Its email campaign used customer data to build individual stories, such as when and where they first travelled with easyJet, and where they might like to go next.

The emails used 12 modules combining graphic devices, destination imagery and copy based on 28 key data points.

A total of 12,473,608 unique emails were sent, and open rates were over 100% higher than the average easyJet newsletter – with 25% higher click-through rates.

Takeaway: Storytelling that leverages customer data enables brands to drive more meaningful connections on a personal level and increase brand loyalty.

Key considerations when creating personalized campaigns:

  1. Know who you’re targeting by interrogating your data – from basic demographics to online behaviors, attitudes, interests and perceptions.
  2. Build real-life, data-driven personas of your target groups, and personalize your communications for each of them
  3. Use dynamic content to personalize the customer experience based on interests and browsing behaviors.
  4. Find out what social platforms your audience prefers, when they’re likely to be online and what sort of content they like to engage with.
  5. Take device ownership and usage into consideration to know what, how and where to optimize.
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