Top 3 Factors Driving Demand for Personalization

If there’s one thing that’s clear to today’s digital marketer, it’s that personalization is here to stay. If we think of the evolution of B-to-C marketing on a timeline, we’ve come a long way from the mass-market “one size fits all” approach to today’s ultra-personalized and contextualized messaging. Carrying on with the evolution analogy, it’s true that some marketing methods that seemed like good ideas at the time aren’t around any more. Remember the “brand within a brand” concept that a lot of major airlines rolled out in the 2000s, like Delta Song and United Ted? Enough said. So what is driving the adoption of personalization, both from a marketer’s perspective as well as the consumer’s perspective? Let’s take a look at the three major factors driving the demand, and supply, of personalization. The Rise of the Millennial Shopper Most retailers can tell you that the “Millennial Generation” spends more per shopping trip than Baby Boomers, and that that spending is expected to grow every year (Opens as a PDF). The simple truth is you can’t market to, say, a Baby Boomer the same way you market to a Millennial. It just doesn’t work. Millennials grew up in a digital environment — they didn’t have to “adopt” it like older generations — and they simply expect their interactions with your application or your email marketing to be ultra-personalized. If you try putting a mass-market message in front of Millennials, they think, “They must be talking to someone else.” This is probably the biggest factor in the adoption and reception of personalization — your biggest and fastest-growing customer segment simply expects it. The Cost to Implement Personalization Can Be Low Initially, personalization was confined only to big budget B-to-C marketers with the staff, time and money necessary to implement it. Today, there are scores of vendors offering personalization functionality, as well as the data necessary to drive those applications at investment points that most digital marketers can easily afford. The conversation around personalization has shifted from, “Should we do it?” to “Of course we’re doing it, now let’s decide how to implement it.” Shifts like this in the digital marketing world mean personalization has moved from a luxury to a necessity, which means it is here to stay. The ROI Is Proven — It Pays for Itself I’ve seen a lot of studies and individual company A/B test results around personalization. In the vast majority of cases, the return on investment analysis is quite positive, driven in turn by the lower investment required to implement, as well as the lift produced in the ultimate measurement of marketing effectiveness — revenue. Just as the cost of implementing personalization is low, so is the cost of doing a simple pilot or A/B test, which I encourage everyone to do when looking at implementing new marketing technology, no matter how attractive it looks at the outset. Taken together, these three factors are ensuring that not only is personalization here to stay, but that the technology will keep evolving to deliver ever-more effective and relevant marketing messages to consumers, which is a world in which both consumers and marketers win.

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Top 3 Factors Driving Demand for Personalization

Joe Dalton

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Joe Dalton