Personalized Marketing: Strategy & Benefits

Instructor: Beth Hendricks

Beth holds a master's degree in integrated marketing communications, and has worked in journalism and marketing throughout her career.

Personalized marketing is a one-on-one approach to reaching consumers with a brand's message. In this lesson, we'll look at personalized marketing in-depth, how it works, and what benefits it provides to businesses.

Amazon Gets Personal

You log onto Amazon's website to purchase a baby gift for an old friend. You check out several options, make your purchase and continue on with your daily activities. Several days later, when you sign in to Amazon to refill some household supplies, you see diapers and other baby items in a section titled ''Recommendations For You.'' How, exactly, does Amazon populate its various lists of recommendations, top picks, and additional items to explore and make it fit so closely to your recent purchase?

Amazon's efforts at personalized marketing are well-known. Thanks to some nifty algorithms and data analysis, Amazon is able to customize each visitor's homepage with products similar to previous purchases or even browsed products and create interesting and relevant content upon log-in. It's a marketing strategy that has been successful not only for Amazon, but has also gained believers in brands like Netflix, Spotify, Target and Barkbox.

So, what exactly is personalized marketing (apart from custom-tailored product recommendations), and what types of benefits can participating brands expect? Read on.

What is Personalized Marketing?

Personalized marketing is like a brand saying ''hello'' individually to each customer; however, more than that, it's understanding what makes that customer tick and using it to reach them with targeted, relevant content.

Personalized marketing is a way of directly targeting individual consumers.
personalized, marketing, targeted, customized

As a marketing strategy, personalized marketing works by targeting messages to consumers through digital applications and use of consumer data, such as demographics (characteristics of the consumer) or browsing/buying behaviors. Personalized marketing, sometimes called one-to-one marketing, because it's a message from one brand to a single consumer, is a highly-targeted and customized way of reaching the right person at the right time with the right message.

Consider this: Have you ever gotten an email from your favorite store that addresses you by name? That's one type of personalized marketing. Has your grocery store ever sent you customized coupons for items you regularly buy? Personalized marketing. Ever received a birthday or anniversary offer from a beloved restaurant? Yep, you guessed it - personalized marketing.

How Does Personalized Marketing Work?

It may seem complicated or labor-intensive or even invasive to implement a personalized marketing approach, but customers not only appreciate it but are coming to expect it. So, how do you do it?

Here are four simple steps.

1. Gather data. The more data you have, the more personalized your marketing can be. This includes everything from gender, age, and household makeup to favorite brands, sizes, and shopping preferences. Good options for gathering data include loyalty programs and brief questionnaires.

2. Segment. Gathering data does you no good if you don't understand how to properly use it. Segment the information by the categories or groups you want to target and then use the gathered data to customize your message.

3. Reach out to consumers. Whether it's through direct email, email, or some other type of medium, this is the step where you plan how to deliver your message to your audience.

4. Customize. Personalizing marketing messages to consumers, such as addressing a customer by name or recommending items similar to a previous purchase, is an effective way to generate loyalty and repeat purchases.

Personalized Marketing Benefits

You now know the ''what'' and ''how'' of personalized marketing, but what's about the ''why?'' Why would a business want to go the extra mile and invest in a personalized marketing strategy? Here are some reasons to consider it:

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