When you get a personalized gift from a friend for your birthday, holiday, or any other special occasion, it’s a sign that they really care about you. On the other hand, a generic gift that doesn’t match your interests may make you feel like your friend doesn’t know you very well. In the same way, companies can deliver personalized marketing. While the term “personalization” is often used interchangeably in the marketing world, its true meaning is often lost. In today’s blog post, we’ll explore what personalization actually means and some examples of it in action.
What is personalization?
Gartner defines personalization as “the process of creating a contextually relevant, personalized experience between two parties that is intended to improve the recipient’s experience.” To put it another way: personalization is the process of personalizing an experience or a communication based on data that a company has collected about a person. Just as you can personalize a gift for your best friend, a company can personalize an experience or a message based on data that they collect about their prospect and customer base.
The possibilities for how you can leverage this data to influence experiences across these channels are endless. For instance, a business-to-business (B2B) tech site that customizes its website homepage experiences to speak to specific businesses is leveraging personalization as a part of its overall business process management (ABM) strategy.
If you’re a B2C footwear retailer that only displays nursing shoes on your homepage because you’ve expressed interest in them, then personalization is the way to go.
Personalization is a form of content recommendation on a financial services website that is tailored to the interests of each visitor.
Personalization is a form of email marketing where a retailer sends an email to a shopper to remind them of an item they left in their cart and to suggest other products they might be interested in.
Personalization is the use of a SaaS app that shows a message that provides real-time advice to get rid of the user’s confusion at the moment.
Personalization is a search engine’s way of highlighting the products that are most relevant to each searcher based on their preferences for colors, brands and styles.
These examples only scratch the surface of what personalization can do. In simple terms, any time a business customizes images, messaging, advice, messaging, communication, interactions, promotions or ads based on what it knows about a customer, it is using personalization.
Personalization vs. customization
This definition may sound a bit like another term: customization. However, there is a big difference between the two. In the case of personalization, the company changes the experience without the customer having to do anything at all. In contrast, customization gives the customer the ability to intentionally change the experience. For instance, when you change your Gmail settings by adding a signature and specifying how many messages you would like to see on a given page, you are changing your email experience for yourself. However, when Gmail shows you ads based on what interests you, you are personalizing the experience for yourself. In the former case, you are changing the experience for yourself, while in the latter case, you are receiving more relevant advertisements without taking any action on your part. Now let’s look at another example that we are all familiar with, online shopping. A lot of online shopping sites let you filter the products that are displayed on a page so that you can easily find the ones that match your specific criteria.
This is customization. You’re deliberately customizing what you see on the page to make it easier for you to find what you need. A site could do a similar thing — help you find the best product for you — without you having to do anything at all. Instead, it could sort the product list and list the top products that match your preferences. For instance, if you shop on a regular basis and buy home décor in black or brushed nickel, the site might list those items at the top. That way, you don’t have to waste time scrolling through pages of useless gold or white décor. Another example of customization versus personalization is email frequency. When you sign up (or try to unsubscribe) for a company, they often offer you the ability to change your preferences to say how often you want to get emails (daily or weekly, etc.).
This is another instance of customization; you tell the company how frequently you want to hear from them, but you could achieve the same result (more or less emails) with customization. In this case, the company will pay attention to how frequently you interact with their email communications, and adjust their email sending frequency accordingly. People who open and respond to more emails will receive them more often, while people who only respond to occasional emails will receive them less often. This is personalization. Both personalization and customization have the same outcome: a more relevant customer experience. The only difference is whether or not the customer actually does the work.
When it comes to personalization, there are many reasons an organization may opt for it. It can improve engagement, conversions, loyalty, and many other key performance indicators (KPIs). But at the most fundamental level, it’s important because, in a world where personalization is the norm, people expect it. Take music streaming services like Spotify, for example. Millions of people use Spotify every day, and many of them rely on personalized playlists curated based on their prior listening habits. Netflix, for example, has millions of people watching shows and movies every week. With so many content options vying for their attention, platforms sort through them all to create recommendations tailored to each subscriber. This saves them time and improves their overall satisfaction with the service. So, even if you’re not a Spotify or Netflix subscriber, you can’t help but appreciate the importance personalization has to be in modern customer experiences. Generic experiences are a thing of the past.
Did you know that 64% of consumers expect personalized engagement based on prior interactions, while 52% of consumers say companies are impersonal? Did you know that 71% of consumers expect companies to talk to them in real time? Do you know that 90% of marketers believe personalization helps improve customer relationships? 92% believe their prospects or customers want a personalized experience? In short, personalization matters to both consumers and marketers. And at Salesforce, we think it will only get more important — so invest in it today!
Final thoughts on personalization
Whether it’s obvious, as with Spotify or Netflix, or subtle — as with some of the companies mentioned above — personalization improves the customer experience by revealing valuable information and making them feel appreciated.