Personalized marketing, also called one-to-one marketing, is a marketing strategy that allows companies to deliver individualized offers, content and advertising to their customers by using data analysis and automation technologies.

The main objective of this strategy is to allow companies to communicate more personally and efficiently with their clientele.

To better understand how one-to-one marketing works, I will outline the main benefits that this solution brings to enterprises.

Benefits of Personalized Marketing

Increased Loyalty

By authorizing a company to use their personal data and information, clients are expecting to be treated as the unique individuals they are.

Studies show that brands that invest time and effort in a good personalized marketing strategy increase the loyalty and satisfaction of their customers.

A study recently conducted by LiVE CLiCKER shows that, when asked “What do you like best about the email marketing offers that you receive from retailers”, 55% of consumers responded that they liked that “it includes products that are relevant to me”.

37% of the respondents, when asked the same question, answered that they liked when companies recognized them as members and showed their loyalty program balance.

55% of the people surveyed stated that they opt out of email marketing messages because the offers they receive are irrelevant or do not target their needs. This is why personalization is extremely important for any business that is serious about customer loyalty.

Increased Revenues

By sending offers and content that is relevant to your customers, you automatically give yourself a better chance to create a strong impression. This usually translates directly into a better Return on Investment (ROI) for the money you spend on marketing.

In the same study, marketers were asked to rate “the effectiveness of each marketing channel in terms of delivering revenue and results for their business”.

46% of respondents stated that email marketing was highly effective, as opposed to only 28% that answered the same concerning display advertising. For organizations with large revenues ($250 Million to $1 Billion), 57% answered that email marketing was highly effective.

Overall, 93% of marketers consider email marketing to be highly or somewhat effective, making it the most praised marketing channel.

The researchers conducting the study did an analysis of email marketing revenue among the respondents. ” We included the survey participant mean monthly sending size of 26 million messages and applied the actual performance metrics by personalization tactic utilized, which the marketers had reported to us.”

The respondents that did not utilize personalization reported monthly email marketing revenues averaging $3.2 Million.

Those that use First Name Personalization (the most basic form of personalization) have an average monthly email marketing revenue of $3.8 Million, an 18.75% increase compared to baseline.

Companies that use Behavioral Targeting average $4.1 Million in monthly email marketing revenue. This is a 28% increase in revenue compared to baseline.

Respondents that use Real-time Targeting report an average of $4.3 Million in monthly email revenue, a 34% increase compared to baseline.

The highest increase in revenue was observed for respondents that utilize Machine Learning Personalization. In this group, the average monthly email revenue reached $4.6 Million. This is a huge augmentation, more than 43% compared to baseline.

Final Thoughts

With the growing popularity of E-commerce, every sector of the economy is becoming more and more competitive.

Companies are always on the lookout for ways to gain a competitive advantage. With the surge of technologies such as big data, artificial intelligence, and machine learning, personalized marketing is more relevant than ever before.

Whether your main objective is to increase revenue (or ROI), augment customer loyalty, or both, one-to-one marketing is probably your best bet.

Personalized marketing is at its beginning and will continue to become more and more efficient with time but, even as young as it is, it has proven to be one of the most effective marketing strategies that companies can use to ensure higher returns with their marketing investments.

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