Personalization drives better performance and competitive advantage. For 90% of leading marketers,  personalization significantly contributes to business profitability. According to consumers, 80% of respondents are more inclined to do business with an organization that delivers personalized experiences  (Epsilon).

Using data to drive personalized experiences stands as a cornerstone for companies aiming to enhance customer experiences and drive brand loyalty.

What is Data-Driven Personalization?

Data-driven personalization is the use of data, analytics, and technology to deliver customized experiences, messages, and products to customers based on their preferences, behaviors, and interactions with the brand.

The positive outcomes of personalization are enormous.

  • 91% of consumers are more likely to shop with brands that recognize, remember, and provide relevant offers and recommendations (Accenture).
  • More and more customers (69 percent) want a personalized and consistent customer experience across multiple channels, both physical and digital. However, few organizations are following through on it (Segment).
  • Personalized content and offers resonate better with customers, leading to higher conversion rates and increased revenue (Accenture).
  • Companies that use advanced personalization see a return on investment of $20 for every $1 invested (Liveclicker).
  • More than a third (36%) of customers will return to a brand if they had a positive experience, even if there are cheaper or more convenient alternatives (Segment).

Types of Data to Drive Personalization

Your first-party data is the best type of data to use to drive your personalization efforts.  Gather data from various touchpoints like websites, apps, social media, and customer service interactions to understand customer behaviors and preferences.

Additionally, 83% of consumers are willing to share data with brands to receive personalized experiences.  So use the data you have on hand to personalize your outreach efforts.

Demographic Data: Understanding the Who

Demographic data revolves around the quantifiable characteristics of your audience. It answers the fundamental question: “Who are your customers?” By segmenting your audience based on demographics, you can tailor your marketing efforts to align with specific attributes, such as:

Age

Different age groups have varying preferences and behaviors. For instance, younger consumers may prefer digital communication and trendy products, while older consumers may prefer traditional channels and established brands.

Location

Geographical location can impact the availability of products, shipping options, and even cultural nuances. Using location data, you can provide localized content, offers, and store recommendations.

Example of personalizing using geographic location based on the recipient’s location. (Image Source)

Household Composition

Knowing whether customers are single, married, or have children can inform product recommendations and content. For instance, parents may be interested in family-friendly products.

Occupation

Depending on your product or service offering, a person’s job or profession can influence their needs and preferences. Understanding their occupation can guide your marketing strategies and product offerings.

Birthday

Using a customer’s birthday is a great way to add a personalized touch and foster a sense of recognition and appreciation to significantly enhance the customer experience.

Example from Red Robin using birthday personalization.

Psychographic Data: Understanding the Why

Psychographic data goes beyond demographics. It aims to answer the question: “Why do your customers make certain choices?” This type of data provides insights into consumers’ lifestyles, values, attitudes, and motivations. Here are some psychographic factors to consider:

Interests and Hobbies

Understanding what activities and interests your customers are passionate about can help you create content and product recommendations that align with their hobbies.

Values and Beliefs

Knowing your audience’s values and beliefs can guide your brand’s messaging and ensure that it resonates with their worldview.

Lifestyle

Lifestyle data considers aspects such as whether customers are health-conscious, environmentally conscious, or tech-savvy. This informs the types of products or services they may be interested in.

Behavioral Data: Understanding Actions

Behavioral data provide insights into customer behavior, preferences, and engagement patterns. Here are some key types of behavioral data used in marketing personalization:

Purchase Behavior

Analyzing past purchase behavior can provide insights into customers’ shopping habits, including whether they are price-conscious, brand-loyal, or open to trying new products.

Browsing Behavior

Tracking the way users navigate your website is a treasure trove of behavioral data. This includes pages visited, products viewed, time spent on each page, and the sequence of actions taken. Browsing behavior can help you understand a customer’s interests and intent, allowing you to recommend relevant products or content.


Target Audiences Actively Shopping for Your Products & Services

See for yourself how our in-market audiences can help you boost customer acquisition and curb attrition. 


Purchase History

A customer’s past purchases provide valuable insights into their preferences and buying habits. By analyzing purchase history, you can make personalized product recommendations, offer exclusive discounts on related items, and create loyalty programs that cater to individual preferences.

Example from Sephora using email personalization based on purchase history. (Image Source)

Click-Through Rates (CTR)

CTR data from email campaigns and ad clicks can reveal which products or offers are most appealing to your audience. You can use this information to refine your email marketing and ad targeting, ensuring that customers receive content aligned with their interests.

Abandoned Cart Data

When customers add items to their cart but don’t complete the purchase, it’s a prime opportunity for personalized marketing. Sending tailored follow-up emails with reminders or incentives can encourage them to return and finalize their purchase.

Email Engagement Behavior

Beyond open and click-through rates, analyzing how users interact with email content, such as which links they click or what types of content they engage with, can guide email personalization efforts.

Conclusion

Data-driven personalization is essential for brands striving to elevate customer experiences and drive loyalty and growth. By collecting customer data and implementing personalized strategies across channels, brands can deliver more relevant and meaningful interactions.

In the era of the empowered customer, the brands that succeed will be those that make their customers feel understood, valued, and appreciated through personalized experiences.

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