Here’s how modern-day personalization helps businesses
From highly personalized news feeds that show us stories based on our viewing history, to bespoke shopping deals that harness our previous buying history to give us the deals we want at a price we’re prepared to pay, we exist in a highly personalized online world.
Long gone are the days of blanketing consumers with the same dragnet of information and offers in the hopes of catching a bite. Instead, modern consumers demand that their individual needs, views, and desires are met, and technology helps businesses cater to those demands.
Data is the new oil
In order to work successfully, personalization must harness data collected from existing or would-be customers. This can be achieved by embedding cookies that track a user’s browser history, or by using information gleaned from online signup forms or e-mail questionnaires.
Research has shown that even a limited amount of information can have a huge impact – so even capturing a customer’s name and birthday could make a significant difference to your business.
A report by Yes Lifecycle Marketing found that email messages with personalized subject lines – addressing customers by name – generated a 58 percent higher click-to-open (CTO) rate than emails that didn’t personalize.
Hyper-personalization harnesses all of the above data and combines it with real-time analytics to take personalization to the next level.
You can use data to track customers on your website and offer them 20 percent off if they’re about to abandon their shopping basket, for instance.
These leaps forward are made possible by advancing technologies such as machine learning and artificial intelligence which can track and compute multiple user behaviors in real-time.
Marketing tech company Cablato is one company using this type of technology. It leverages real-time data and programmatic advertising (where a machine buys digital ads rather than a human) to create advertising campaigns designed for specific individuals.
In essence, the programmatic machines make decisions about what will work best, for which customer, and when – all in just five milliseconds. The firm says that its tech has seen ad effectiveness increase 10-fold.
Data protection laws
But the collection of data for use in personalization/hyper-personalization from customers also raises serious practical, ethical, and legal concerns which companies cannot ignore (anymore).
While recent controversies around Facebook and Cambridge Analytica have made headlines, the Data Protection Act will be replaced by the EU’s General Data Protection Regulation (GDPR), a legal framework with tougher punishments for anyone who fails to comply with new rules around the handling of personal data and storage of information.
Under GDPR, organizations in breach of the regulations can be fined up to 4 percent of annual global turnover or EUR20 million (US$28 million), whichever is greater.
3 April 2020