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Personalized marketing and customer trust go hand in hand

Marketers strive to provide personalized experiences to their customers. But customers will only reveal personal information in exchange for trust.

Old techniques of proliferating a generic message in multiple places are giving way to more personalized, relevant...

communications based on customers' individual preferences. In marketing, this represents a shift from impersonal, transaction-based messaging in favor of preference-based, tailored experiences for customers.

Voice of Customer (VoC) research by Ernan Roman Direct Marketing Corp., indicates that, notwithstanding privacy concerns, customers and prospects are willing to provide personal information to companies in exchange for something of value. It's up to marketers to meet these demands, but they can't get anywhere without good, quality data and a rich, reciprocal relationship with their customer bases.

The reciprocity of value equation

Marketers must change their strategies to use data to craft personalized communications. Companies need to take their customers' individual preference information and figure out what to offer them. A way to remember this is to employ the reciprocity of value equation:

Customer reciprocity + Business reciprocity + "Human data" = Customer experience transformation

Customer reciprocity refers to customers' acknowledgment that, to receive more relevant and personalized communications and offers, they need to provide marketers with personal or business preference information. Business reciprocity refers to marketers' recognition that they have to serve customers with content that caters to their preferences. To be truly personalized, content has to be based on more than just transactional, overlay and inferential data. Human data refers to opt-in, self-profiled customer information on needs, expectations, preferences, demographics and other personal data. When these aspects are combined, the customer experience will be more individualized and focused.

Earning the customer's trust

But marketers have to earn the right to request human data in the first place. By earning trust through marketing campaigns that motivate customers to opt in, marketers will create a high-quality database of customers who truly want to interact.

VoC research found that B2B and B2C customers won't allow companies to use human data unless specific promises are kept, including the following:

  • Deliver on the fundamental brand promise.
  • Treat the customer fairly in terms of pricing and customer service policies.
  • Protect customer information: Explain the reasons for the opt-in information requests and ensure the privacy and safety of data.
  • Improve customer experiences by using stated preferences and aversions.

Retailer earns trust and engagement

Gilt, an online retailer, has personalized its marketing efforts to drive engagement for new and existing customers. The company has increased orders, decreased email and mobile push notification unsubscribe rates and boosted repeat-purchase rates.

"Gilt's commitment to a personalized experience is evident when customers return to the homepage of the website or mobile app," said Welington Fonseca, Gilt's vice president of marketing and digital analytics. "Sales within the store [men, women, kids, home] with the highest affinity to a consumer's past behavior and preferences [browse, purchase, favorite brands, wish list] are presented at the top of their homepage with all other sales ranked according to relevance based on previous shopping behavior and collaborative filtering."

Another example of Gilt's personalization strategy is the algorithm-powered Your Personal Sale feature, which displays the most relevant brands and products based on individual shopping patterns and self-stated preferences, providing Gilt with another way to interact with customers to understand their needs.

"All communication is personalized, with the company sending [more than] 2,500 versions of personalized emails and mobile push notifications on a daily basis, eight times per week," Fonseca said. "Results have been a double-digit increase in orders and reduction in email and mobile-push-notification unsubscribes."

Key takeaways

Companies are competing for consumer attention in an ever-changing landscape of technology and evolving preferences. Make your business stand out by providing highly personalized communications, offers and experiences. Start with preference-based human data, not just traditional inferred or transactional data. But it won't be easy to use this information, because trust must be earned before the data can be used. A valuable exchange of information between the customer and the company will make the customer's experience better while boosting sales.

Next Steps

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