Context Takes Personalization Into the Future

Personalization is an automated process that combines data collection, real-time segmentation and complex algorithms

One of digital marketing’s buzz-iest buzzwords is personalization. Marketers are talking about it. Businesses are implementing it. You know you need it. But what is it, exactly?

Personalization helps customers feel like they’re directly connected to your brand, instead of just being part of the masses. Who doesn’t want to feel like the brands we love care about what matters to us? And for brands, that focus on getting as close to 1:1 marketing as possible leads to increases in loyalty and conversion.

Since the beginning of the Internet, people have sought use the web to form personal connections. While that might sound like the introduction to an eHarmony commercial, it extends beyond just connections with other individuals. We are now following and interacting with our favorite brands; we have a direct line to them. The same way we expect a person we’ve had a conversation with to remember our name and a couple key points from our discussion, we expect brands to know who we are and what we’ve “talked” about with them. That is the core of personalization.

So What is Personalization, Exactly?

The simplest, most textbook definition of personalization is the practice of customizing a digital experience to a user’s specific needs and interests, using data collected from the user. Personalization, ideally, is an automated process that combines data collection, real-time segmentation and complex algorithms to provide users with an experience that truly resonates with them. An experience can be personalized through any of the following methods: remembering customer site preferences, tailoring recommendations and offers to their purchase history, automatically recognizing what country they are in, etc.

The first step to a personalized experience is knowing who your customers are. What's their geographic location, what site referred them to yours, what device are they using to view your site? Once you’ve collected information on both known and anonymous users and segmented them by trends, you can begin to personalize for each customer segment. As you’re serving up a customized digital experience, you’re also testing different aspects -- from headlines to button placement -- to continually improve your customer’s experience and increase conversion.

The State of Personalization Today

According to a 2014 report compiled by MyBuys Inc., personalization is one of the top three priorities for retailers along with mobile and marketing. Email has been the most successful out of current personalization efforts for 80 percent of retailers participating in the report. In addition, 23 percent of retailers saw a greater than 11 percent cumulative lift when using personalization.

Personalization is not just limited to commerce, it’s also incredibly important for content too. Users are constantly bombarded with content every time they sign on. Couple that with decreased attention spans, and if you’re not showing a customer content relevant to their interests, you risk losing them entirely.

While personalization is a very customer-centric practice, it also has significant business benefits. One of the most important is helping to steer your customer along the path you want them to take on your website. You need to think beyond the initial visit and think about what you want them to see and do with each return visit. Then, look at what paths your customer has taken on their own and make sure all content that you’re driving them to is relevant based on both paths.

Contextualization is a Game Changer for Personalization

Picture this: You’re a Netflix user and you just watched The Sixth Sense. When you log back on, all your recommendations are comprised only of other M. Night Shyamalan films. This sounds like the stuff of nightmares right? If contextualization is working alongside automated personalization, this thankfully shouldn’t happen.

Contextualization is a key component to personalization. It takes into account not just what you read, saw or did on site, but where, when and why. A single action or a single purchase won’t dictate how a site is personalized to a user. For example, purchase history is often factored into personalization efforts. When it comes to purchase history, seasonality needs to be considered, as many people are buying gifts for friends and family during the holidays and they might not be interested in those products themselves.

This can also lead to a better, more personalized experience. Maybe a customer has planned a camping trip and has been stocking up on gear. While it shows an interest in camping, that doesn’t mean that they only want to see camping equipment every time they visit your site, as their preferred outdoor retailer. However, looking at the list of gear, you notice that most of it is designed for colder temperatures. This is a perfect opportunity to serve up content related to camping in extreme conditions, adding value for the customer and showing that you are paying attention.

By focusing not just on personalization but on contextualization as well, you can find the right balance of how much information to provide based on what pages the customer has visited, what they’ve searched for, how they came to your site, and if they’re viewing your content on the web or via a mobile device.

According to Teradata's 2015 Global Data-Driven Marketing Survey, 90% of marketing and communications executives said that they are focused on obtaining customer data at an individual rather than a segment level. With continued personalization improvements combined with contextualization, brands will get closer and closer to the coveted 1:1 customer interaction as possible.

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