The next big thing
Personalization. Everyone’s favorite marketing buzzword. Or at least, one of the most-used buzzwords. Personalization has been at the forefront of digital marketing conversations for a very long time, for good reason.
Personalization is the act of tailoring content or an experience to an individual based on something we know about them, their interests, and the data we’ve been able to collect on them. It allows brands to connect and engage more effectively with their target audience. But using customer data isn't foolproof, especially when you aren’t validating if that data is accurate and more importantly, up to date.
In doing some research for a presentation the other day, I logged into my Facebook and Instagram accounts to take a look at what Meta had deduced my ‘ad interests’ to be. The very extensive list included: I’m British (I’m not); I’m an HR leader (nope); and that I have a keen interest in volleyball (never played). And this was just the tip of the iceberg.
Personalization is incredibly valuable to marketers. But we can do better. What does better mean to us? Real-time personalization.
What is real-time personalization?
Real-time personalization is a way to instantly deliver personalized content to individual users based on their current interactions and behavior. It allows you to understand who they are now, as opposed to who they were three months ago.
Real-time personalization is a highly effective strategy for customer engagement and customer satisfaction. For example, the average cart abandonment rate is 69.99%. And according to Forrester, cart abandonment costs brands around $18 billion in annual sales revenue. But when brands follow up with a cart abandonment email marketing automation, research has shown an open rate of 45% and a click-through rate of 21%, with 50% of users who click-through, going on to purchase.
How does real-time personalization work?
Real-time personalization – similar to traditional personalization – leverages data that is collected and stored in a user profile and allows brands to deliver contextualized personalized experiences to different users – even if they are relatively anonymous.
Customer profiles are enhanced with additional first and third-party data. The most powerful of which is real-time first-party data – the actions and customer behaviors that occur in the moment.
Think about location data as an example. If you download an app and enter your location, information can be tailored based on the zip code or city you provide.
However, if location-tracking is enabled for the downloaded app, then real-time data can be more powerful and more accurate here. The content, offers, or promotions can be tailored to a persona’s location at that point in time, not where they said they were last week. Using real-time data helps to ensure you have the most current information on consumers, so you are acting on that up-to-the-minute data.
Why care about real-time personalization?
Personalization is nothing new. We’ve been talking about it for most of the 21st century. In 2006, Time magazine named “you” (yes, you!) as its “Person of the Year”, in recognition of the growing influence of user generated content. The success of YouTube, personal blogging, and the increasing popularity of social media was turning interest onto the individual. Editor of Time magazine, Richard Stengel summed it up perfectly:
“it literally reflects the idea that you, not us, are transforming the information age”
So, why after so many years, is personalization still so crucial to marketing? There are two key reasons:
The loss of the third-party cookie
When Google announced that they would be phasing out the use of third-party cookies, following moves already made by Firefox and Safari, people panicked. Many marketers had been relying on third-party data to inform their digital marketing strategies for years and had no idea how to personalize without it.
But in reality, the pivot to first-party data is a golden opportunity. An opportunity to raise the personalization game and deliver more meaningful digital experiences. Collecting and implementing information directly from consumers, allows brands to market personalized recommendations based on their customer journeys, as opposed to the journey of a generic, pre-defined customer profile.
The content marketing explosion
Research has found that people are now spending an average of seven hours consuming online content. Understandably, this is creating content fatigue and the average marketing campaign is being drowned out by a thousand others.
Marketers need to find a way to cut through the noise. Something to stop users hitting unlike, unfollow, unsubscribe.
More content isn’t the answer. The right content is. And this is where RTP comes in. Brands need content that cuts through the noise and connects with consumers.
Before the days of digital, people would buy their essentials at the corner shop. The owner, knowing that Mr. Lee likes a particular brand of beer, has ordered it just in time for the weekend, when Mr. Lee comes in.
It is these sorts of experiences that marketers are now trying to replicate — to share relevant content, from personalized emails to landing pages to product recommendations, and messaging that resonates with consumers across all touchpoints.
Real-time personalization: The good, the great, and the awesome
There are over 7 billion people in the world and each one is different. Real-time personalization recognizes the individual and sets out to understand them.
Although RTP requires some upfront effort, it does pay off. Once you have the right tools in place to provide you with strong, connected data, RTP allows you to make use of it much more quickly. And arguably, there is less risk with RTP. Less room for error. Instead of making assumptions about a consumer based on behavior from the last few months, you can understand what journey your customers are taking in the here and now and respond accordingly.
In our 2022 survey “The Future of Personalization in Marketing”, we asked brands their top three benefits of real-time personalization:
- 44% said heightened customer retention
- 43% said enhanced lead nurturing
- 39% said increased CTA conversion rates
- 37% Increased customer trust
- 34% increased customer stickiness
And this is just a small sampling from our survey in terms of the benefits of real-time personalization, but we know that the list can go on and on. While the benefits may change for different businesses, verticals and teams, the consensus is that there are benefits abound for real-time personalization.
Looking ahead: The future of personalization
There is no doubt that for many marketers, their personalization strategies need a refresh. Traditional personalization alone can lead you to build up customer profiles that are outdated and tend to look a bit like my “Ad interests” list on Facebook.
And as people gain more control of their data, they are more likely to say “no” to cookies when they don’t think they’re getting anything in return. Or, at least when they think they’re just going to get spammed with irrelevant adverts.
And yet, Sitecore has found that 28% of UK consumers are willing to share personal data in exchange for personalized offers — and this increases to 46% if the marketing communication from brands is also seen as relevant.
Your ecommerce customers want value in return for sharing their data. And that's where real-time personalization can truly shine — by helping you optimize the delivery of the right offers and messages at the optimum time.
Of course, utilizing both approaches is the ideal strategy. Not only to understand what each customer needs in any given moment, but also to understand how they got there.
Real-time personalization is quickly gaining traction and is certainly more than just the latest buzzword. Learn more about Sitecore Personalize today.