Have you ever heard the word “personalization”?
Even if you know something about it, there may be few people who can explain it properly.
In fact, personalization is often used in business settings, and even in our daily lives, we may be affected by personalization without even realizing it.
This time, we will introduce an overview of personalization and examples of its use in business.
What is personalization?
Up until now, marketing has mainly relied on mass communication such as television and newspapers. In other words, the same information was being conveyed to many people at once.
However, in modern times when the Internet has become widespread, customers are able to obtain more information themselves, and mass communication alone is no longer sufficient to convey product information.
That’s why personalization has attracted attention. Rather than conveying the same information, you can respond to diversified needs by disseminating information with communication tailored to each customer in mind. It can also strengthen relationships with customers.
A word similar to personalization is “customization.” Customization refers to settings and changes made by individual users. For example, customization can include the ability to mute social media or set specific notifications yourself.
The difference with personalization is “Who takes the initiative and makes the choices?” Customization is driven by the individual user, while personalization is driven by the company providing the service.
What kind of advertisements are there in the apps you usually use?
For example, many people have probably experienced that a man who loves cars often sees advertisements about new car models, and a woman who buys cosmetics online often sees advertisements about cosmetics.
Advertisements that are displayed according to the preferences of the target person in this way are called “personalized” ads, and the method of displaying ads to specific people is called ”
targeting
.”
In addition to matching the preferences of the person, personalization also emphasizes the moment (timing) of display.
For example, when a woman named Miho researches neckties for men on the Internet thinking, “I want to give her a present for her husband,” Miho (female) is shown a large number of advertisements for neckties for men for a certain period of time. Probably.
The business that distributes the advertisement assumes that this person wants a necktie, and if they show him lots of necktie advertisements, he will buy it, and targets Miho with a necktie advertisement. That’s what I’m doing.
Example of using personalization
With the spread of the Internet and smartphones, we have entered an era where consumers can choose and retrieve the information they want from a large amount of information. As needs have diversified, the days when companies simply produced large quantities of the same product and relied on
mass marketing
such as TV commercials are over.
Therefore, it has become necessary to review product manufacturing methods and marketing strategies, and provide information such as products and services based on customers’ hobbies, preferences, and behaviors.
BtoB: Improving the efficiency of sales activities
Personalization can also be used in
BtoB
transactions between companies. Customer needs vary depending on the situation. Therefore, you can conduct business more efficiently by changing the content of your email newsletter and sales activities depending on the customer.
For example, it would be effective to include information about new products in an e-mail newsletter to previous customers, or to provide them with information that solves problems they had heard about during sales.
In addition to making sales activities more efficient, you can also expect to improve
customer loyalty
.
Compared to BtoC, which targets individuals, BtoB involves multiple people up to the point of purchase, and business negotiations tend to take longer.
In the past, we tended to rely on layman’s sales activities for the whole process, starting with prospect discovery, subsequent proposals, and closing, but with the development of the Internet, BtoB businesses can also rely on customer purchasing. Behavior has changed. Currently, data shows that approximately 67% of prospective customers of BtoB companies gather information on the Internet to solidify their purchasing intentions before having a business meeting with a salesperson.
Against this background, an increasing number of companies are adopting
digital marketing
in the process of discovering potential customers and cultivating purchasing intent. The key here is personalization. If you can segment your customers according to their needs and consideration phase and provide them with the information they need in advance through personalization, you will be able to eliminate competitors and speed up business negotiations.
BtoC: Web advertising/SNS advertising
Web advertising uses search history and other information to display ads for each user. By displaying ads based on the user’s interests, you increase the chances that they will catch your eye and click on your ad.
SNS advertising uses the same mechanism as web advertising. For example, Twitter uses following history and search history to display advertisements. Therefore, by narrowing down the targets for advertising in advance, you can send out ads effectively.
BtoC: EC site
When you’re shopping on an e-commerce site, you’ve probably seen messages such as “Products Recommended for You” and “I’m also buying other products like this.” This analyzes the registered age and gender, purchase history, and product viewing history to determine and display products with a high simultaneous purchase rate and highly related products. Since products are different for each user, personalization is being utilized.
Benefits of personalization
Personalization is also beneficial for customers, as it provides information that interests them and products and services that suit them.
Here we will introduce four main benefits of personalization, and what kind of effects it has from a corporate perspective.
Build relationships with customers
By personalizing the information and responses provided to each customer according to their attributes, behaviors, and requests, it can greatly contribute to building a relationship of trust between customers and companies.
If you can make your customers feel special and feel like they were treated as a valued customer, this will lead to increased customer satisfaction.
Can retain existing customers
By building a relationship of trust with your customers, you can expect them to become repeat customers who continue to use your products and services, and you can expect to see an increase in the amount spent per customer.
If you can use real reactions such as customer voices and reviews to improve product development and services, you will further deepen your relationship of trust with your customers.
Personalization measures are not limited to the digital realm. If you treat each customer individually when they visit your store, you will be able to retain more customers. Analyzing customer insights through personalization can similarly lead to improved quality in real communication.
Able to execute marketing measures efficiently
By introducing personalization, you will be able to collect and accumulate detailed customer information.
It is important to improve the accuracy of information when conducting marketing activities. By focusing on individual
customers
, rather than just a large number of unspecified
customers
, the accuracy of information will increase and marketing measures will be more efficient.
Capture potential customers
Analyzing customer information in detail can uncover latent needs that the customers themselves may not be aware of. By incorporating personalization, you can also increase awareness of your products among people who are unfamiliar with them.
Points to note when personalizing
We will explain in detail three points to keep in mind when implementing personalization.
When information is too biased, reliability decreases.
The strength of personalization is the ability to provide information that is of interest to customers by referring to their behavior and hobbies and preferences. However, if the information provided becomes biased due to personalization, the range of information that customers can view will be narrowed, and they may think that the information they know is limited.
Not necessarily the information the customer wants
It is important to check the changing needs and attributes of customers and keep updating personalization information. Human emotions are changeable, and so are our preferences. Be aware that if you are not aware of changes in your customers, you may continue to provide them with unnecessary information and they may leave you.
Analog costs more than digital
Personalization is effective not only in digital but also in analogue measures such as direct mail. In the case of analog measures, for example, there will be printing costs and shipping costs, and if you are particular about the design, there will also be creative costs.
Therefore, in the case of analog measures, it is important to carefully consider cost-effectiveness and narrow down the targets.
Examples of services that utilize personalization
We will introduce examples of services that utilize personalization in actual companies and media.
Amazon
For more than 20 years, Amazon has implemented a “recommendation function” that displays recommended products based on customers’ search history and purchase history. We also display personalized recommended products for each customer.
The recommendation function displays recommended products that customers might purchase based on information such as browsing history, purchase history, and purchase frequency.
For example, Amazon displays recommendations when you add a product to your shopping cart, or before and after reading a book on your Kindle, to stimulate your purchase intent.
News curation media
Curation media refers to a site that organizes information focused on a specific theme, and is a platform where information is compiled on one site.
One of the representative services is NewsPicks.
Personalization can be expected to improve user satisfaction,
NewsPicks allows users to register their own interests and customize the news displayed. Since you can preferentially view news in your field of interest, you will receive a higher evaluation of our services.
What is personalized advertising?
So far we’ve talked about personalization. The idea of utilizing personalization in advertising is called personalized advertising, and ads are delivered according to the user’s interests.
This is seen in web advertisements, SNS advertisements, advertisements on video sites, etc., and refers to advertisements that are delivered according to the interests of users.
Personalized advertising uses user information such as search history and browsing history on the Internet to identify the user’s interests.
Personalized advertising brings benefits to both Internet/SNS users and advertisers. From the user’s perspective, content that matches their interests is suggested as advertisements, allowing them to obtain useful information.
On the other hand, for advertisers, being able to deliver advertisements tailored to users allows them to approach more likely customers. Therefore, it can be said that personalized advertising is a tool that can provide an appropriate return on advertising costs by increasing the relevance of advertisements to users.
What is non-personalized advertising (NPA)?
Non-personalized advertising (NPA) refers to ads that are not based on a user’s past behavior. Provided by ad distribution platforms such as Google.
Non-personalized ads include ads that are targeted using contextual information such as your general location, your usage of content such as sites and apps, and your current search terms.
Personal information such as gender and age will not be used for advertising distribution.
In addition to knowing personalized advertising, you should also be aware of non-personalized advertising.
summary
Personalization is a marketing method that provides information and services tailored to each customer, whether digital or analog. By individualizing and communicating with each person, we not only increase sales but also produce results with high customer satisfaction.
Let’s bring a new and advanced breeze to the business scene by using advertising with a proven track record.