The 3 Stages of Customer Personalization & Their Tactics

According to Deloitte’s 2022 study, brands that prioritized personalization were nearly two times as likely to have exceeded their revenue goals in 2021 compared to brands with low personalization capabilities.

The digital space is saturated with reports showing customers are expecting more, higher-quality personalization from brands. They want to be known, and more than that, they want to be understood. Reflecting individuals’ wants and needs throughout their entire customer lifetime is a big opportunity for brands. And in doing so, brands are seeking to make higher profits.

Brand goals for personalization centre around these common themes:

• Driving revenue (and profits)
• Improving customer retention
• Increasing new customer acquisition, 
• Developing customer lifetime value

To make personalization really count, we encourage brands to take it a step further by adding in these personalization objectives:

• Make it relevant to the customer
• Add value, not fluff, to your tactics
• Add value to every interaction
• Create a cohesive experience across channels

Despite setting these goals, many brands are working against the clock as consumer expectations continue to shift, competition increases, and data availability grows in abundance. 

Personalization relies on two key things to start — data and technology.

Even traditional brands have made significant investments in their data and technology to deliver better personalization for their customers.

For example, McDonald’s acquired machine-learning company Dynamic Yield to tailor their drive-through signage based on relevant data. Now, McDonald’s can make recommendations by blending external information like the current weather and time of day with first-party customer data to suggest items relevant to their specific time and place — in other words, shifting from asking whether they want fries with that, to knowing that they do using machine learning.

Your technology and integration mix, paired with useful and relevant data collection will ultimately set up your brand for success in achieving your basic personalization goals.

To start, begin with a simple technology stack audit and/or an assessment of your data collection processes to understand:

• Where your data is currently stored
• What data type(s) are being collected
• Which platforms are connected to share data (and can share data)
• How you envision using customer data to deliver more personalized experiences

Ideally, integrations already exist between your high-touch (and priority) platforms using native or custom API connections. A common technology integration exists between eCommerce storefronts like Shopify or Salesforce Commerce Cloud (SFCC), and marketing platforms like Klaviyo or Salesforce Marketing Cloud (SFMC).

These platforms can integrate seamlessly to provide a unified system for managing both eCommerce and marketing efforts, allowing brands to create personalized, data-driven customer experiences across channels. This can include abandoned cart reminders, geo-targeting for in-store campaigns, and replenishment automations encouraging repeat purchases.

But sometimes, system integrations aren't possible due to internal resourcing or technology limitations.

If this is your challenge, you are likely facing the need to manually import raw data into the platforms you are leveraging for customer marketing and/or sales. While this works on a short-term basis, you will miss out on long-term personalization opportunities and full-scale impact of your technology investments. To mitigate this risk, you should prioritize a technology audit or systems integration partner to get your technology working together seamlessly.

Let’s explore where your particular opportunities exist by looking at different stages of personalization and what tactics are typically used within them.

Start Here: Personalization Basics

To achieve basic personalization, you need to collect zero and first-party data and then use it in your different sales and marketing channels. This is where technology and system integrations play a major role.

Basic personalization looks like:

• Customer segmentation 
• Ad retargeting 
• Behavioural pop-ups onsite
• Dynamic content for channels like email/SMS

This stage will help activate the bare minimum for personalization, but likely won’t meet consumer expectations. However it is where brands often need to start, and is also where they can fail fast.

Failing to meet basic personalization requirements is usually due to poor data hygiene and collection, which limits brands’  ability to “personalize” their communications using simple components like customer first name and city. 

Levelling Up: Intermediate Personalization

Intermediate personalization tactics require a deeper understanding of customer behaviour and preferences, offering more opportunities for targeting and segmentation. They go beyond basic personalization by incorporating more data points and leveraging more sophisticated tools, and can help strike a better balance for brands scaling their personalization strategies.

In this stage, brands can offer more tailored experiences for their customers in a controlled number of channels, without the complexity of fully dynamic 1:1 personalization. You may find that you need to expand on your usage of existing platform features if you’re not already leveraging them, such as predictive or AI-powered features.

Some effective intermediate personalization tactics include:

• Personalized search and web experiences that present unique offers and product recommendations based on customer segments and behaviours
• Predictive automations, which use behavioural triggers such as product replenishment or churn risk management to target customers at individualized intervals based on data patterns among similar groups
• Channel preferences, which go beyond basic segmentation by incorporating customer behaviour. You can discern your customers’ channel preferences by sending an email or an SMS campaign, (not both). This a more relevant personalization effort that shows customers that you have a deeper understanding of them

This stage is a realistic personalization goal for brands — once you’re here, we recommend staying  within this phase for a while to benefit from machine learning, trend analysis, and data enrichment opportunities. There are many variables and opportunities for testing, optimization, and tactic enhancement, and your customers will benefit from your learnings over time.

While benefits like this are a huge motivator for brands, it’s a goal that is within reach for most organizations — but it takes time, planning, and internal alignment to achieve.

A common pitfall for brands at this stage is a lack of understanding or ability to activate the full feature set of their tech stack and data availability. You may know what you want, but not how to get there.

Top Tier Execution: Advanced Personalization

Predictive and dynamic personalization represent the pinnacle of customer personalization. At this advanced stage, personalization transcends contained segments or channels and becomes the core foundation of your entire digital strategy. While rich in customer experiences, this stage can take years to successfully achieve and requires a significant amount of ongoing resource investment.

Some advanced tactics available to you as you emerge into more complex personalization include:

• Messaging that delivers contextual messages to users based on real-time data such as location, weather, and current events. This tactic increases the relevance and timeliness of communications to make them more impactful and engaging, but often requires additional data integrations, like location-based data, to be effective.
• Product recommendations based on past behaviours, preferences, and similar user profiles. Using machine learning algorithms. These recommendations increase the relevance of suggestions, leading to higher engagement and conversion rates. This tactic requires vast amounts of data and advanced algorithms to make accurate predictions.
• Dynamic content personalization, which ensures that customers receive the most relevant and timely information, enhancing their experience and increasing the likelihood of conversion. This requires advanced data integration and real-time processing capabilities.
• Omnichannel personalization, where app, web, and in-store experiences integrate seamlessly across all touchpoints in near real-time. This tactic improves customer satisfaction and loyalty, especially long-term as data enrichment expands with increased purchase frequency.

Advanced personalization tactics, such as predictive product recommendations, dynamic content personalization, and omnichannel experiences, significantly enhance customer engagement and satisfaction. While these tactics require substantial investment and careful management, the rewards in terms of customer loyalty and increased revenue can make them well worth the effort if you’re ready to embrace customer personalization to its fullest extent.

Personalization is no longer a luxury but a necessity for brands aiming to stand out in a competitive market. By effectively integrating personalization across sales and marketing channels using available data and technology, brands can deliver superior customer experiences, drive engagement, and boost conversion rates.

However, overcoming challenges related to data quality, privacy, and technology is crucial to achieving true personalization. Brands that master these elements will not only meet but exceed customer expectations, paving the way for sustained growth and success.

Want to chat with an expert about leveling up your brand’s personalization? Get in touch with us today.