By Lars Fiedler, Periscope By McKinsey
Consumers in this day and age expect personalized communications that are customized to their individual preferences and delivered seamlessly across every channel.
But while retailers and brands have an abundance of data to gain insights on consumers readily available, harnessing the power of personalization to target individual shoppers with the right message, at the right time, and via the right channel is proving challenging for most. Others, meanwhile, are overlooking attractive consumer segments that are eager to be engaged. Those retailers that have developed personalized marketing strategies know that there are ups and downs along the way to finding success, but what is it that really matters to consumers?
In March this year, Periscope By McKinsey conducted a survey among consumers in the U.S., UK, France and Germany to see how attitudes toward personalization are changing not only domestically but also in important European markets and for many U.S. retailers and brands. The findings highlighted several key areas that should help retailers answer the question for themselves and guide the development of their personalized marketing strategy, particularly given the research found that one-third of messages received by U.S. (37 percent) consumers had stimulated them to act.
Consumers Are Motivated By (The Right) Deals
Asked what motivates them most to act on a personalized communication, taking advantage of an offer that saves them money topped the list for consumers in the U.S. (61 percent), U.K. (59 percent), France (54 percent) and Germany (49 percent). Messages about products they wanted to buy proved the next motivating factor for consumers in the U.S. (47 percent) and U.K. (45 percent), followed by communications about products within their budget (41 percent U.S. and UK).
The number two motivating factor for consumers in Germany (48 percent) and France (47 percent) proved to be messages about products that match their personal tastes. Taking the third spot for 45 percent of consumers in Germany were communications on products they wanted to buy, while 42 percent of shoppers in France were motivated by notifications about products within their budget.
Which Channels Get Consumer Attention?
Asked what kinds of messages they had actually opened and read, SMS/text messages stimulated high engagement levels with shoppers everywhere. In the U.S., it was the channel most likely to elicit an “open and read” action, with 42 percent of all messages received being opened and scanned.
When consumers were given the option to select their top three preferred channels for receiving personalized messages, while email predominated in all countries surveyed, shoppers in the U.S., U.K. and Germany identified coupons linked to their loyalty cards as their second choice, followed by either WhatsApp (U.S. and Germany) or advertisements on Instagram (UK).
It’s Time To Raise The Bar On Personalization
What the research uncovered and customers we speak with every day are realizing, is that retailers and brands must take their personalization efforts to the next level – it is a significant opportunity to increase consumer engagement. To be successful and reap the rewards, businesses must employ advanced analytics and scalable and sustainable solutions that help them better understand their consumers and create the right mix of content, channel and timing to drive a change in the behavior of an individual customer. Not doing anything, or getting it wrong, will leave you behind the game.
One thing is for sure. Personalization does not equate to overloading consumers with high volumes of messages and communications that are not relevant or timely, or tailored to their individual likes and tastes. To be successful with personalized messaging, companies should employ the following approach:
Data: Build A Rich Real-Time View Of The Customer And Involve Them In The Process
Build a data foundation that delivers a rich customer view. Collect customer data onto a single platform, using advanced analytics to process and AI to refine this data. Mine this data to create relevant and personalized messaging that demonstrates empathy and understanding of a customer’s needs and shopping preferences.
To help overcome consumer data privacy fears, offer shoppers opportunities to share their individual wants and likes. Engage in feedback on how happy they are with the products they have purchased, and what other options they’d like to buy in the future.
Decisioning: Identify Meaningful Personalization Opportunities
Less is sometimes more especially where email is concerned, and email is an easy platform for consumers to dismiss if the messages they receive rarely relate to their interests. Consider reducing the volume of emails sent and applying decisioning engines to ensure every message is triggered by the behavioral cues that flag a true personalization opportunity.
Keep in mind that personalization is more than simply using someone’s name and try to move beyond basic personalization strategies and antiquated “list pull” segmentation practices. Instead, deploy adaptive modeling and nimble data utilization so that you can scale up the delivery of personalized interactions that are meaningful.
Design: Test And Learn To Refine Your Approach
To find the right content for each customer at a given time and channel, create hypotheses on what offer will work for an individual customer, on which channel, and when. Test out these hypotheses and improve your outreach approach, depending upon the outcome. For example, show different landing pages and use tailored/individual message layouts.
Always seek to understand what equates to value from a customer’s perspective — for customers, the value of personalization is all about getting relevant messages in a timely manner. It’s a balancing act that depends on customers trusting brands and retailers with personal information in return for insights and decisioning support that’s tailored at an individual level.
Delivery: Combine Messaging Platforms To Boost Engagement Rates
Take advantage of alternative channels like text/SMS and Instagram and try out different combinations of messaging platforms to increase engagement rates.
When it comes to location-based messages, exercise sensitivity and caution because, while catching consumers in shopping mode can create significant gains, appearing invasive may have a negative impact. Make sure you have built the appropriate trusted relationship and tested out the waters before you push the button for location-based messages to an individual shopper.
You can read more about the survey’s findings by downloading The Art of Personalization— Keeping it Relevant, Timely and Contextual.
About The Author
Lars Fiedler, partner and senior solution leader of Marketing Solutions at Periscope® By McKinsey, discusses findings from the company’s latest research on the impact of personalized marketing.