In our last podcast, we talked about the difference between personalization and individualization. This we’re diving into how you can incorporate individualized marketing tactics into your digital and direct marketing strategy.
Allen: Hey to all the data driven marketers out there looking for new ways to reach unique prospects and better engage audiences. This is the sixth podcast for the 2 Guys and Some Data series, giving you the nitty gritty advice you need to actually make more money. I'm Allen Abbott.
Larry: And I'm Larry Kavanagh.
Allen: In our last podcast, we talked about the difference between personalized and individualized marketing, but we didn't really have enough time to dive into how to incorporate tactics into your marketing, even if you're an old school direct mailer. So that's what we're going to talk about today — really seeing individualization in action. For those of you who didn't get a chance to listen to our last podcast, we laid out the differences between personalization and individualization and outlined why marketers must use both tactics smarter.
Larry: Hey, Allen, if I remember correctly, you got a nicely personalized message from a fitness center discussing the benefits of exercise and better diet. Did that inspire you to ramp up your workout schedule?
Allen: You know, it really did. I actually made five visits before I lost interest, which is a record for me. But here's a quick recap to get us all up to speed. Personalization is really a mass marketing technique crafted around audience segments, groups of people who share similar demographic and other data attributes. This is a great technique to use when a consumer is just starting out on their buyer's journey, and it's great for introducing your brand to prospects. They're at the top of the funnel, and they're not quite ready to make the purchase decision.
Larry: Allen, you can think of personalization by segmentation is a little bit like targeting a LinkedIn group. Everyone in that LinkedIn group shares one interest, but their other interests could be very different. It's a surface-level connection that really gives you a starting point. If you want to start a conversation with someone in a LinkedIn group, you've got to know a lot more about them as an individual.
Allen: Right-o. And while personalization does give you the ability to create a more refined targeted marketing strategy, it really isn't enough to truly engage consumers by today's marketing standards, as they move along that elusive path to purchase.
Larry: Individualization, on the other hand, is a data-driven technique created with an understanding of the consumer as an individual. It's not only about knowing what the consumer is currently interested in, but understanding why they are online or in a store or just where they are in their path to purchase.
Allen: Yeah, that's really the key, isn't it, Larry? Knowing what motivates a consumer.
Larry: Absolutely. For instance, consider a person searching for a new pair of running shoes. You must know why they are looking for those shoes in order to deliver the right marketing message. Are they a marathon runner who's in training? Or is this just a New Year's resolution, like yours, to get fit? I found out the hard way that your goals as a runner make a big difference. And by the hard way, I really mean the hard way. Allen, did you know that your feet swell when running long distances?
Allen: You know, that's never happened to me when I was running for the train, but I'll take your word for it.
Larry: When I ran a marathon, my big toe actually burst through the top of my shoe. Fortunately, I was in too much pain everywhere else to notice at the time. But getting back to what we're talking about and not about my running, seeing the bigger picture, rather than the individual picture of these two hypothetical shoppers looking for running shoes, allows you to create a marketing message that resonates, and also get them in the right shoe.
Allen: Exactly. Consumers expect individualization today, mainly because of brands like Amazon, who know how to tailor each customer experience to that individual shopper. Individualized marketing is still relatively new, especially for small to mid-size companies, but it's now affordable for everyone.
Larry: You know, even just five years ago, the majority of marketers didn't have the technology to create individualized digital marketing, let alone individualized direct mail. That's one of the reasons why I get all geeked out about marketing today. Technology is giving us a chance to rewrite the old best practices and get to the heart of what marketing should be, providing value to the consumer. We're really starting to see marketing as consumer focus. You know, people-based.
Allen: That's why marketers really need to understand the difference between personalization and individualization, and know how and when to use an individualized piece, rather than a personalized marketing piece.
Larry: Right. And the answer lies in consumer data.
Allen: So, a little segue, Larry. We live in a world of big data. We're constantly pulling data from website visitors, tracking how they move from one site to another, one page to another. But do you know who created the first ever live webpage?
Larry: Well, I want to say Al Gore, but that joke really dates me. Okay, I'll bite. Who is the real inventor of the Internet?
Allen: Well, I'll let you know after you tell us how to put individualization into practice.
Larry: Oh, man. I knew there was going to be a catch.
Allen: So, what do you suggest we do to use individualized marketing smarter?
Larry: All right, Allen. Put me on the spot. All right, to achieve individualization ... That's hard to say. Individualization. But to achieve it, you've got to coordinate data from different sources inside your organization, and perhaps add data from outside, as well. You combine this into a single customer view, sometimes called a unified or 360 customer view. It all starts, though, with being able to identify an individual across multiple touchpoints. That includes their online and offline behaviors. You've got to encourage individuals to identify themselves in interactions with you.
Allen: You mean things like contests, online or offline, and sign ins with Facebook and product reviews?
Larry: Yeah. You got it. You also must collect data beyond the transaction a customer made. This could mean surveys or just keeping track of contacts like customer service calls and website visits. Now, I'm going to tell you where you'll end up when all of this data is together, but for those of you out there, don't listen to this and just think it's too hard or I'll never get there or it's pie in the sky. There are things you can do today that will take you down the road to individualization.
All right, so in order to create a single customer view, first you need to clean up and combine the data you have. This involves merging and de-duping records from different points of contact inside your organization, like your website, call center, retail store, all the while while noting the recency of different data elements. Next, add in data compiled by others at the individual level. What you add depends on your own product and marketing strategy. For example, if birthdays are important to you, you can get that on your entire customer file from Facebook.
Because marketing is so immediate today, speed of data is critical. You've got to update your customer view in near real time. Individualization is about creating a marketing message that addresses a customer's needs in that moment. One of the biggest challenges to consolidating all this data is cross device matching, identifying the same user, whether they're browsing on a desktop or some other device.
Allen: Yeah, and that's so important since a lot of product research is done on mobile devices. Yet when the shopper's getting ready to buy, they often switch to a desktop or laptop device. For me, using my thumbs to order something on a phone is just not physically possible.
Larry: Well, once you have all your data consolidated and it's as accurate as you can reasonably and economically make it, you need to analyze that data to gain actionable insights.
Allen: Yes. Actionable insights. I've heard that term a lot recently, and I did read a pretty good article in Forbes recently by a guy named Brent Dykes called Actionable Insights: The Missing Link Between Data and Business Value. That laid out the key attributes that are required to make insights actionable. According to Dykes, they're alignment, context, relevance, specificity, novelty, and clarity. If you get the chance, you should read the full article.
Larry: Sounds like some homework for me. All right. I'll take it on.
Allen: So we know what data is required for individualization. Let's say we have a single customer view. How and when do you use this marketing tactic effectively?
Larry: Well, Allen, how is the big question. The quick answer is algorithms and feedback loops. Now does that answer it for you? Okay. Let me go into a little more detail. Remember, old school personalization was about segmentation. It provides some large groups of people the same marketing experience. Individualization, on the other hand, combines a single customer view, all that data, with an algorithm that determines a dynamic marketing message.
You also asked how you make individualization effective. That's where feedback loops come into play. The feedback loops checks to see if the algorithm is working. Did that individualized message that the algorithm created actually result in the shopper taking an action? And to really geek out on you, machine learning systems today and in the future, can modify that algorithm so its effectiveness continues to improve.
Finally, you asked when do you use individualization. I think by that you mean in what situations is it appropriate? Is that right?
Larry: Okay. Well, it can be appropriate in a lot of places, but I tend to focus on when and where it can make the biggest difference to a business. Prospects who are close to the bottom of the sales funnel are a great place to start because it's easy to see a return on marketing investment.
Allen: So an individualized email, like the one Amazon sends for items on your wishlist or in carts, works really well?
Larry: For sure. Those are good bottom of the funnel situations where there's enough data to create an algorithm to create a unique marketing message. But individualized marketing isn't limited to online channels. Like we mentioned at the beginning of the podcast, individualization can and should be used in all of your marketing mediums.
Allen: For sure. I was brainstorming with a client recently, and he mentioned that his company was trying to dig out of a really bloated inventory position. I suggested he used individualized postcards to encourage site visitors with a history of sale purchases to visit the clearance section of the company's website.
Larry: That's a terrific use. I'd also suggest considering both prior customers and web visitors who have bought from or visited the clearance category. You can feed both past purchase and web behavior data into an algorithm to determine how motivated they are by deals, what product images are the best ones to show them — the ones most likely to get them to take an action--and when's the right time to contact a specific individual.
Allen: That's awesome. A few minutes ago, I asked Larry if he knew who created the first live webpage.
Larry: I really hope you're not going to say Al Gore.
Allen: No. On August 6th, 1991, Tim Berners Lee made live a webpage on how to create webpages and explained hypertext. It ran on a NeXT computer at the European Organization for Nuclear Research, or CERN. The site is still live today if you want to look at it.
Larry: Berners Lee. He was the father of HTML as a computer language. That was a bit of a trick question, though, because CompuServe and services like Easy Saber existed before that. But they were definitely not webpages, and they were totally brutal to use.
Allen: Yeah, I think I may still have a CompuServe email address.
Larry: You really ought to change that. Okay. That's it for this episode. Thanks for listening to two guys ramble about data and individualized marketing and the inventor of the modern Internet for the past few minutes. If you liked this topic, you'll probably find our blog The Psychology of Individualization and How to Build Trust with Your Audience interesting. You can find it and more resources at navistone.com/blog. Again, that's navistone.com/blog. We'll be back in a few weeks to talk about what we learned at eTail West. I'm Larry Kavanagh.
Allen: And I'm Allen Abbott. Have a great day, everyone.