The Importance of Personalization
November 2005
INTRODUCTION When e-mail was first introduced as a viable marketing and communications vehicle, organizations used it to send mass messages to large databases of contacts. It was a fast, cost-effective tool. Since then, email has become a more complex marketing medium as a result of both regulatory and market demands requiring marketers to update their use of this medium. Audiences today favor demassification and personalization of the marketing messages they receive. Demassification refers to the process of breaking down the mass market (those large lists of contacts) into focused, segmented groups based on preferences, lifestyles, purchasing trends, values and priorities—to name a few. The focus has shifted from a “one size fits all” model to content that is relevant and specific to the intended recipient. Personalization commands the user’s attention with tailored messages and products. It builds familiarity by utilizing consistent templates that employ a similar “look and feel” to what the end user is used to seeing. These attributes help establish a bond with the recipient that will, if executed correctly, promote loyalty through increased customer service. Incorporating personalization into e-mail marketing campaigns increases response rates, instills trust in the organization and the messages it sends and builds a relationship with the end user that encourages them to become an active contact. With all the advantages to this tool, why aren’t more marketers using it? Most e-marketers do use personalization on some level whether it be using the first name in the message greeting or sending different messages based on geography or membership status. The most successful marketers work with their e-mail service provider (ESP) to delve deeper into their database metrics and build campaigns that uncover the essential information needed to personalize messages effectively. The challenge to successful personalization is availability of data, time and cost to collect useful data and understanding the technical aspects employed by ESPs to personalize campaigns. The purpose of this paper is to review general concepts behind personalization, further investigate its advantages, discuss the challenges to personalizing campaigns and provide solutions to overcome the challenges.
DEMYSTIFYING THE CONCEPT OF PERSONALIZATION A simple Google search provides many documents written by marketers that give definitions of personalization including: • The process of gathering user-information during interaction with the user, which is then used to deliver appropriate content and services, tailor-made to the user’s needs. (Source: Personalization of Web Services: Opportunities and Challenges, http://www.ariadne.ac.uk/issue28/ personalization/) Building customer loyalty by building a meaningful oneto-one relationship. (Source: Doug Riecken. “Personalized Views of Personalization.” Communications of the ACM, 43(8): 27--28, August 2000.)
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While the word choice varies, the concept is the same—building customer loyalty and satisfaction by gathering and using data tailored to the customer’s needs, preferences and values. Online vendors frequently use this concept. If you visit Amazon.com and look up fitness DVDs with or without purchasing them, the next time you visit the page you will see Amazon has automatically recommended other fitness DVDs based on your recent search. You will also receive a personalized confirmation page if you purchased a DVD with additional items related to your search. Personalization occurs in different ways in an e-marketing campaign. Some ways include: • List segmentation – dividing marketing lists based on pre-determined factors to create targeted messages to each segment. Content – tailoring the text of the message to fit the list segment. Subject line – creating a subject line that is personalized to the recipient, grabs their attention and increases the likelihood they will read the message. Address line (i.e. Dear [Insert name],) – including the recipients first name in the greeting. Signature (insert a name and personal signature) – including an electronic signature from the person
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sending the message. • Type of message – a recipient may sign up or be qualified to receive certain publications such as e-newsletters or ezines.
Common Terms Call to action: In an email message, the link or body copy that tells the recipient what action to take. Content: All the material in an email message except for the codes showing the delivery route and return-path information, including all words, images and links. Cookies: A collection of information, usually including a username and the current date and time, stored on the local computer of a person using the World Wide Web, used chiefly by websites to identify users who have previously registered or visited the site. Demographics: The characteristics of human populations and population segments, especially when used to identify consumer markets. Dynamic content: Email newsletter content that changes from one recipient to the next according to a set of predetermined rules or variables, usually according to preferences the user sets when opting in to messages from a sender. Dynamic content can reflect past purchases, current interests or where the recipient lives. Landing page: A Web page viewed after clicking on a link within an email. Also may be called a microsite, splash page, bounce page or click page. Personalization: A targeting method in which an email message appears to have been created only for a single recipient. Personalization techniques include adding the recipient’s name in the subject line or message body, or the message offer reflects a purchasing, link clicking, or transaction history. Psychographics: The use of demographics to study and measure attitudes, values, lifestyles, and opinions, as for marketing purposes. Segmentation: The ability to slice a list into specific pieces determined by various attributes, such as open history or name source. Signature: A line or two of information found in the closing of an email usually followed the sender’s name. Signatures can include advertising information, such as a company name, product, brand message or marketing call to action (subscribe to a company newsletter with the email subscribe address or Web registration form, or visit a Web site with the URL listed). Subject line: Copy that identifies what an email message is about, often designed to entice the recipient into opening the message. The subject line appears first in the recipient’s inbox, often next to the sender’s name or email address. It is repeated in the email message’s header information inside the message. CHALLENGES AND SOLUTIONS Personalizing e-marketing campaigns allow organizations to effectively target and capture potential contacts. The most notable benefits of personalization include:
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Segmentation of the distribution list is a key component of personalization. Many organizations purchase or build marketing lists that include hundreds or thousands of names from different backgrounds, interests, professions, etc. Dividing, or segmenting, the list by pre-determined factors will help guide the development of a personal message. The segmenting factors are determined by the goal and scope of the e-marketing campaign. Example: ABC Association is conducting an e-mail marketing campaign to increase attendance at its annual educational meeting. After reviewing attendance statistics for the past three years, the marketing director concludes that only 50 percent of their current membership base attends the meeting. ABC Association currently has 95 percent of their members e-mail addresses in its database. The membership represents different industries (allied healthcare professionals, automotive service workers, nursing industries, financial planners, etc) with varied professional interests, socioeconomic backgrounds, educational needs and technological skills. ABC’s marketing director works with their ESP to segment the list and subsequent messages based on the following factors: • Geography – contacts within driving distance to the threeday meeting location receive messages focused on the oneday rate and their ability to choose the day based on their educational program needs. Activity levels – members who had participated in other events or purchased publications already had a connection to the organization. They received messages targeted toward educational content and encouraging their continued learning and professional development through attendance at the three-day meeting. If they have had no history with ABC except for their membership, they received an introductory message highlighting the importance of attending the meeting. Membership type – those members that fall into a vendor category (service providers to the industry) receive messages recruiting them to exhibit and sponsor social and networking functions. Educational content – the content of the meeting was divided into tracks based on professional experience levels (i.e. beginner, intermediate, advanced). Contacts received messages targeted to their perceived experience level based on their years in the industry.
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It is important to note the difference between personalization and customization. Customization allows the user to proactively configure a Web site and/or create a profile. Personalization occurs when the marketer actively gathers information from the user or analyzes their activity and profile.
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Increasing response rates – Statistics indicate that personalized messages lead to higher response rates from users to the marketers “call to action.” The call to action is the desired action from the message. It could be a click through to the organization’s Web site or an invitation to attend an event. Building relationships – Building a relationship with the user increases the likelihood the user will purchase services or products, continue to read and act on messages, visit the organization’s site and stay on as a long-term customer or member. Promoting security with customers – The volume of spam in the recipient’s general inbox requires marketers find creative ways to ensure the recipient reads the message. Personalizing the message with relevant information increases customer’s security with the organization. Personalization helps marketers legitimize their messages to the reader.
Collecting data for personalization can occur in every campaign that is sent. For example, if a non-profit membership association conducts online membership renewal, the data collected (i.e. name, contact information, industry, title, etc) can be used to personalize messages later in the year at a relatively low cost. The key is to discuss options with the ESP instead of assuming the technology costs too much money. In the end, the return on investment (ROI) could far exceed the initial cost. Challenge: Technical Aspects In this case, the organization does not understand, own or utilize technical solutions available to personalize the message. Solution: Educate yourself on the main aspects of personalization and work with an ESP to handle the technology. If e-marketing is not your primary profession, turn to someone who is an expert (such as an ESP) to help you create an e-marketing plan that incorporates personalization. The technology around this medium changes frequently. The ESP’s job is to stay up-to-date with technology changes and communicate that to the client. CONCLUSION Personalization is a key tactic to improve the success of an e-marketing campaign. Personalized messages encourage the recipient to read the content and respond to the call to action. More importantly, personalized messages serve as a tool to build a relationship between the marketer and the recipient that can ultimately lead to consumer loyalty. In an environment where consumers are inundated with choices, employing a tool that promotes continued interaction is essential. Personalization also helps increase perception that the marketer is a viable information source. This helps to decrease spam complaints and ensure the delivery of the message. The overall concept of demassification is dynamic, much like the personalized message itself. It will continue to evolve as techniques for gathering information improve. The goal is to understand its benefits and stay up-to-date with technology available to use this beneficial marketing technique.
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Despite the opportunities available, organizations still face challenges to personalizing e-campaigns. The challenges a marketer faces vary depending on their level of e-marketing expertise, e-mail client, etc. The organization’s ESP is typically able to deal with these challenges rather easily. Gold Lasso defines the top three challenges as unavailability of data, timeliness and cost to collect data and technical aspects. Challenge: Unavailability of Data In this case, the marketer or organization does not have data to segment their distribution list or personalize the message. Solution: Incorporate surveys, polls or response forms to build database. The first step is to use any data available, even if it is just a first name, to begin personalizing the message and campaign. For example, if the organization is a non-profit membership association it likely has names and member ID numbers for billing purposes. That information can be used to initially personalize. By using the name and ID number the sender builds security with the recipient who recognizes the confidential information as a legitimate message. Incorporating templates that contain the organization’s logo and general “look and feel” will help build a brand with the recipient as well. However, gathering data should be the main focus to overcoming this challenge. Gold Lasso recommends using quick surveys, polls or response forms in the email and on the landing pages that can be merged with general databases and used in future campaigns. Challenge: Timeliness/Cost to Collect Data In this case, the organization believes they do not have the time or budget to gather the data needed to personalize the campaign. Solution: Consult with the ESP to develop tactics to gather data in current campaigns.
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