How Data is Shaping the Future of Marketing Personalization

Author's avatar Marketing Dec 15, 2021 10 minutes read

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    Peter Caputa

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    Ever wonder how Netflix finds the perfect cornucopia of content for you every time you log on?

    For every streaming service out there, there are ten more waiting to be discovered. This market saturation has made it difficult for streaming companies to attract new customers or keep existing ones hooked. But Netflix has cracked the code on how to keep viewers coming back for more. The streaming giant gives you what you want before you even realize you want it.

    Netflix does this through data-driven personalization, which uses users’ activity on the platform to recommend shows that are perfect for them. That’s why it’s so hard to resist Netflix’s recommendations, even though you know you’ll be paying for it at work the following day.

    While most businesses aren’t anywhere near that size, they can still take a few notes from Netflix’s data-driven approach. For marketers, data-driven personalization is one of the most important trends to consider today. As the technology for personalizing content becomes more powerful and widespread, it’s vital to adopt a data-driven strategy to ensure that you’re always reaching out to your customers with digital campaigns that’ll likely fit their individualized tastes. 

    Keep reading to find out how data can help you re-imagine and future-proof your marketing personalization strategies.


    What is Personalized Marketing?

    Earlier marketing methods primarily relied on casting a wide net and hoping to earn a few quality catches. Marketing in this era is a totally different ballgame. Today, it’s all about being specific, personal, and strategic with your efforts. 

    With data and insight at their fingertips, marketers can now continuously learn about their audiences. This knowledge helps them deliver relevant content at every step of the buyer’s journey. This practice of communicating through individualized messages is called personalized marketing.

    Why is Personalization Necessary?

    Everyone knows that feeling of being hit by a wave of fake and irrelevant advertising. These mindless interruptions that reek of desperation and opportunism have conditioned people to react adversely to marketing attempts.

    By marketing in ways relevant to the target person, brands can differentiate their strategy from the rest of the pack. Personalization helps lower the barrier between brands and customers. It creates an intimate two-way communication that makes the buying experience more human.

    How is Data Helping Expand the Scope of Personalized Marketing?

    Remember when mentioning a customer’s name in an email subject line seemed like a huge deal? Well, those days are long gone. Today, personalized marketing requires a far more robust and strategic approach. 

    This is where data comes into play.

    Your customer data can help you craft more focused campaigns that weave your story into the fabric of your customers’ lives. 

    Compare the classic example of simply addressing emails to consumers by name to this striking email sent by Netflix. It is clear from the email that the brand knows exactly what its consumers would like to indulge in. 

    personalized email marketing - example from Netflix

    A data-driven approach to personalized marketing allows you to:

    • Better optimize your advertising efforts.
    • Educate yourself on consumers’ behavior.
    • Hone in on their needs and wants.
    • Deliver an unforgettable brand experience.

    If you’re still not sold on the importance of data-driven personalization, take a look at the success of Amazon’s recommendation engine. Amazon’s recommendation algorithm is an innovative marketing tool that puts data before all else.

    The company focuses on making shopping easier for customers by analyzing their data to foresee what customers want. It then uses that data to provide customized suggestions based on shoppers’ behavior and engagement patterns with the help of its marketing funnel software. That way, it can give recommendations to make the customer journey as seamless and pleasant as possible. 

    By immersing themselves in customer data, businesses can better respond to visitor needs and wants. This information also allows them to offer new products before customers even ask for them. Which ultimately results in a loyal customer base that’s engaged with your brand right from the get-go.

    Benefits of Creating Data-Driven Personalized Marketing

    When it comes to personalized marketing, more data means better results. Here are some benefits you can expect from tracking consumer preferences and behavior: 

    Gain a better understanding of your customers

    By reviewing customer data, brands can get an understanding of their interests, goals, and actions. You can then use this information to refine marketing campaigns and fine-tune product launches, thus improving engagement and conversions.

    For example, GreenPal, a lawn care company, ran a location-targeted AdWords campaign. The company’s CEO felt that the response was good, but it could be better. So they sifted through the demographic data to spot trends they could capitalize on. They soon found out that their target location was populated with a more price-sensitive demographic. When the company adjusted its ad copy to appeal to a more price-sensitive customer base, it saw an increase in conversions of 200%.

    Gain a better understanding of your customers

    Become more aware of your customers

    While a company may have a well-informed idea of its target audience, an in-depth analysis of data will:

    • identify the channel in which their audience congregates 
    • recognize the platforms each customer frequents 
    • days and times, a user is most likely active on that platform

    It makes sure audiences are exposed to the right messaging on the right channel at the right time. Take, for instance, Starbucks’ geo-targeted offers. The coffee juggernaut uses GPS technology to trigger relevant in-app offers when a customer nears a store. 

    Define your perfect audience

    Brands often segment audiences by data. You can know who participates in your marketing efforts and how to reach them with relevant information.

    Challenges of Adopting a Data-Driven Approach

    If you’re looking to build a truly data-driven marketing disposition, there are a few challenges you need to overcome first:

    Being data deficient

    When it comes to collecting data, marketers are often afraid of what they don’t know. Their acquired data usually isn’t sufficiently accurate or relevant to yield actionable insights.

    What can you do?

    You can get around this problem by using data enrichment tools.

    These services will enrich your database with all the relevant information you’ll need to support your campaigns.

    Related: How to Analyze Data: 30+ Experts on Making Sense of Your Performance

    Bringing it all together on one dashboard

    To build a successful analytics strategy, you need to have a high-quality data pipeline that updates quickly and frequently. But manually pulling and updating your data panel can be pretty tedious. 

    What can you do?

    Data visualization platforms like Databox can help you solve this problem. These tools can help you sync all your data sources in one dashboard for quick and accurate analysis. 

    Not able to break through data silos

    The formation of data silos occurs when companies fail to centralize their data. These organizations often struggle to consolidate all of their data and customer profiles. This lack of cohesion leaves marketing teams in the dark and limits their ability to deliver effective strategies.

    What can you do?

    Trying to draw insights from a jumbled mess of data is like deciphering a novel whose pages have been ripped out. In order to solve this problem, you need to break down those silos and have everything in one place. By doing this, you will be able to detect anomalies and misdirections in your data.

    How to Get Started with Data-Driven Personalized Marketing?

    Now that you’ve been made aware of the benefits and challenges of a data-driven marketing strategy, let’s see how you can begin creating data-driven marketing experiences. Here are the steps to take:

    Define your data objectives

    As you’re setting up your brand’s first data-driven personalization campaign, your team should be following the right objectives from the start. 

     By setting objectives upfront, it’s easier to assess the success of your project and course-correct where necessary. It also aids in reducing the risk of collecting too much, too little, or useless information.

    Knowing what data points to gather

    After laying out your goals, you’ll need to determine what data you’d like to gather precisely. You can then explore different ways to collect that data using the various tools you have on hand.

    Compiling and charting the data

    Start gathering all the pertinent data into a spreadsheet or marketing reporting software like Databox. 

    Embrace cross-functional team collaboration

    Data-driven marketing demands collaboration between data, IT, sales, and marketing teams. To achieve your company’s top-level goals, these departments must share best practices and work jointly while mapping out strategies.

    Run tests

    Even with the most advanced data available, marketing is a delicate balance between hypotheses and reality. Customers are going to be unpredictable, but testing and measuring help iron out some of that unpredictability.

    Keeping track of progress

    Data-driven personalization is a continuous process that requires constant improvement. No matter how data-optimized your campaign is, you should still devise a method to monitor your progress. This is the only way to find areas for growth and make improvements.


    Future-Proof Your Marketing Plan

    Today, winning and maintaining customer loyalty requires providing unsolicited relevance at every step of the buyer’s journey. It isn’t just about staying in touch. It’s about understanding and anticipating customer needs and then giving them exactly what they want. 

    With data-driven marketing, you can leverage online communications and content to influence buying decisions and nurture relationships over time. This way, brands can build a more robust and more sustainable competitive edge. So, if your company is struggling with lackluster sales or poor reception to marketing campaigns, data-driven personalization could be the answer.

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    Article by
    Ahmad Benny

    I’m a London-born lover of technology, e-commerce, and digital marketing in general. I love learning, researching and curating value nuggets to save you time, money and help you achieve your goals.

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