Overview

Here’s how personalization and marketing segmentation differ, why personalization is superior, and the path to move from one to the other.

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Background

Definitions of marketing segmentation and personalization

In the modern economy, a clear consensus has emerged in direct marketing (e.g. snail mail, email, mobile): sending the same message to every customer doesn’t work.

Brands are only successful when they target specific customers with relevant messages — open, engagement, and conversion rates all increase. Fortunately, there are 2 (and only 2) ways to target messages:

  • Segmentation: send a message to a specific group of customers
  • Personalization: send a message to an individual customer
Strategy

Be on the look out for marketing segmentation claiming to be personalization

Consider the following direct marketing tactic: a retailer sends a swimsuit coupon to consumers who live in a Hawaii.

To be clear, this message is not personalized; it’s an example of segmentation. To personalize, the brand would have to send a coupon to consumers in Hawaii the moment they decided to start looking for a new swimsuit.

However — there are tons of marketing vendors who will claim both messages count as personalization. Why? Because personalized marketing, though hard, works! According to data from CMO.com

  • 74% of consumers get frustrated when advertising has nothing to do with their interests
  • Marketers who personalize experiences see an average 19% increase in sales
  • 77% of marketers feel personalization is crucial, but 60% can’t personalize their content
  • Personalized messaging has 600% better conversion rates, but 70% of brands can’t use them

Restaurants and retailers looking to improve customer engagement absolutely have to personalize marketing — the resulting positive impact is dramatic. As such, they have to make sure marketing technology providers can actually deliver personalized content, instead of just segmentation.

Implementation

At a high level, true personalized marketing requires three capabilities:

Target messages according to all four types of customer data

  1. Demographic: data about customers, e.g. date of birth, gender
  2. Behavioral: data about customer activity, e.g. location, channel preferences
  3. Purchase: data about customer spending, e.g. purchase dates / amounts, frequency
  4. Feedback: data about customer sentiment, e.g. how customers feel about their experience

Send unique content according to data targeting

No matter how data-targeted, you’re just doing segmentation if you send the same message to all customers. Personalized marketing requires being able to send a unique message depending on the data targeting done.

Send targeted and unique content at a relevant time in the customer’s purchasing process

Without relevancy, a super-targeted and unique message will never be opened.

Thanx

And it’s these three capabilities that make Thanx such a powerful technology for customer engagement. Thanx exists to give brick-and-mortar businesses the same data and personalization capabilities afforded to e-Commerce websites. Know when, where, why, and how customers shop, send them unique messages according to this information, and see engagement at least 400% higher than other marketing software options.

advice

Get help implementing personalized marketing at your business

If you’d like to learn more about how to move from traditional segmentation to true personalized marketing, please email us and we’ll get right back to you. We’re happy to provide specific recommendations about how to improve your customer engagement and overall satisfaction