The Power of Personalization

Transcription

1 The Power of Personalization By John Sisson, President, Wilde Agency universalwilde.com 26 Dartmouth Street, Westwood, MA P F Universal Wilde. All rights reserved.

2 Forrester reports that spending on marketing in the US will balloon to $2 billion by 2014 that s a compound annual growth rate of nearly 11%. The reason is that marketing is cost effective and provides a good ROI. A recent Direct Marketing Association study noted that commercial returned an incredible $43.62 for every dollar spent in In many cases, communications are used as a customer retention tool. Forrester reminds us that the bigger challenge for marketers is finding a way to get your brand to stand out, because by the year 2014 consumers will be deluged with more than 9,000 marketing messages annually. With this as the marketing landscape, how will your brand stand out? By 2014 direct marketers will waste $144 million on s that never reach their primary target, said Forrester Research Vice President and Principal Analyst David Daniels. Successful Direct Marketing pros will alter their tactics to overcome inbox clutter and increase relevancy. Are Your s Being Seen? Table 1 shows performance data from a recent report by Epsilon and the Experience Council. 2 While continues to be a popular communication tool for marketers, it s not going to solve all lead generation challenges. With open rates averaging between 14.8 and 38.6% across industries, and click-through rates averaging between 3.8 and 8.1%, we are continuously fighting an uphill battle to capture share of mind. In fact, to get the most out of your marketing program Epsilon recommends getting personal, utilizing consumer data both stated preferences and past behavior to personalize and individualize campaigns that appeal to the consumer and create a one-to-one dialogue. 3 Delivering the right message to the right person at the right time is still the best way to engage your target. Table 1: d Performance by Industry Industry Non-Bounce Open Rate Click Rate Click Rate to Open Rate Business Products/Services General 95.5% 23.0% 3.9% 16.9% Business Publishing/Media General 97.1% 18.8% 5.1% 26.9% Consumer Products CPG 97.8% 18.7% 8.1% 43.0% Consumer Publishing/Media General 98.8% 15.1% 5.6% 36.9% Consumer Services General 96.7% 20.5% 4.8% 23.5% Consumer Services Telecom 95.6% 19.0% 5.9% 31.1% Financial Serviced CC/Banks 96.2% 38.6% 6.1% 15.9% Financial Services General 96.9% 32.5% 6.9% 21.3% Retail Apparel 98.8% 14.8% 3.8% 25.6% Retail General 98.4% 27.8% 6.6% 23.7% Retail Specialty 97.5% 19.6% 4.0% 20.6% Travel/Hospitality Travel Services 97.7% 27.2% 4.5% 16.6% Q Trends and Benchmarks, Presented by Epsilon and the Experience Council 3 Q Trends and Benchmarks, Presented by Epsilon and the Experience Council 2 of 7

3 Relevancy: Going for a Deeper Connection Relevancy is perhaps becoming the most overused word in marketing next to the phrase social media, but it is a vitally important part of marketing. We often hear about relevancy as part of social media planning, but the reality is that it needs to be part of the total marketing strategy because it affects all areas of communication, especially generation of leads. Much of lead generation today is still interruption driven, companies send information that may or may not be of interest to the contact. Relevancy drives a contact to respond to messages and offers. But can you systematize relevancy? It s easy to create an offer, podcast, or video that is interesting and relevant to a specific audience, but how do you handle that across multiple audiences in a single campaign? List segmentation is often used to match relevant messages to specific audiences. In most cases, segmentation is done at a basic level that groups records into buckets such as geography, function in the organization, industry, etc. But, we know that tools like customer relationship management (CRM) systems and social media are delivering insight into the behaviors and preferences of our audiences that go beyond the basics. We already know how hard it is to get people to respond to marketing campaigns. The question is, how do you make a deeper connection? And how do you build relevancy into the way you market as a whole? The answer is moving beyond relevancy into personalization. And becoming more personable as a brand. How Powerful is Personalization? Personalization is not a new concept. It was first studied in 1999 when David Broudy and Frank Romano conducted groundbreaking research that uncovered the power behind personalization of direct marketing tactics 4. According to Broudy and Romano, Businesses need to know that the expenses involved in a personalized print run will generate a profitable rate of return on their investment before they invest in it. Their report, An Investigation: Direct Mail Responses Based on Color, Personalization, Database, and Other Factors, identified several factors that exponentially increase the success of direct mail pieces. They found that full-color printing, name personalization, integrated database information, and discount offers had a powerful impact on response. Using static (no personalization), black-and-white mailing pieces and a 0.46% response rate as a baseline, the researchers tracked the results of increasingly complex versions of two B2C and two B2B campaigns. Some 144,000 pieces later, the team had their results (see Figure 1 on next page). According to their research: Personalizing the mailer with a recipient s name increased response rates by 44% Printing a piece in full color, versus black and white, increased response rates by 45% Combining full-color printing and basic name personalization increased response rates by 135% 4 Broudy, D. & Romano, F. An Investigation: Direct Mail Responses Based on Color, Personalization, Database, and Other Factors. (1999). Digital Printing Council 3 of 7

4 Integrating database information about the recipient such as purchase history into the offer increased response rates by over 500% At the time of the publication of these findings, the technology to execute a campaign of this nature was not widely available. Harnessing Technology Thirteen years after Broudy and Romano s groundbreaking research, the capabilities and use of personalized data printing, also called variable data printing, have increased and advertisers and direct marketers continue to raise the bar. Personalization opportunities have increased as customer and prospect databases have become more sophisticated. Where early databases included just a few fields of information, today s databases combine basic demographic data, such as gender and age, with psychographic information, such as recent purchases and preferences. And this is where personalization really gets powerful. An InfoTrends/CAP Ventures study found that campaigns using variable data strategies like personalization have up to: 36% higher response rate 47% increase in repeat business 24% average order value increase 31% overall revenue profit increase 5 The core marketing elements in a direct marketing campaign including print, , and personalized landing pages (PURLs), can all feature intricate graphics, strong branding elements, text and images customized to the individual recipient s preferences. PURL content can be even more extensively tailored to a contact, making your company website that much more relevant to the How Personalization and Color Impact Response Rates 600% 500% 400% 300% 200% 100% 0% Name Personalization 4C Printing Personalization and 4C Database Integration Figure 1: Broudy and Romano demonstrate effect of personalization and color on response rates 5 Multi-Channel Communications Measurement and Benchmarking, InfoTrends, of 7

5 respondent. It can include things like questionnaires, dynamic text and images customized according to the visitor s database information, special offers, links to sales representatives, and suggested next steps links that point to information available on your website that will help in decision making. Taking a Multichannel Approach A multichannel approach in marketing campaigns means using all your available communication channels to reach your audience. In the last couple of years, as marketing budgets were slashed, there was an increase in digital marketing as the main method for lead generation and customer retention tactics. Unfortunately, this left out other channels and opportunities to reach customers and prospects that can help a company stand out from the crowd and increase response rates. In Figure 2, we can see how multichannel communications affect response rates. A recent study by Gartner G2, imedia Communications, and Wharton School of Business at the University of Pennsylvania surveyed 212 U.S. marketing professionals from B2B and B2C companies with marketing budgets from $1 million to $50 million plus. 6 This study showed that personalized marketing is increasing in importance. Reported benefits of personalized marketing include: Improvements in customer and prospect time: 44% Greater customer retention: 43% Overall revenue increases: 43% How a Multi-Channel Approach Impacts Response Rates 10% 8% Improvement over print-only campaigns 6.5% 19% 28% 34% 35% 8.3% 8.7% 8.8% 7.7% 6% 4% 2% 0% Print Only Print & Web Landing Pages Print & Print, , Web Landing Pages & Mobile Marketing Print, , & Web Landing Pages Figure 2: Effects of multichannel communications on response rates of 7

6 Enhanced average time spent at site by prospects and clients: 42% Improved employee efficiency: 38% Reduced costs: 26% Increased margin of average sale: 25% How to Build a Successful Personalization Campaign Without the right technology in place, managing multiple marketing campaigns across channels can be a complex task, not counting reporting and evaluating return on investment for your marketing dollars. Adding the ability to personalize both printed and digital communications can be a challenge as most marketing automation systems require you to work with a vendor capable of producing both print and digital data for your marketing campaigns. Here s how to get started: 1. Build an Accurate Marketing Database Many companies get hung up on their database, worrying that it is not in shape to support a fully personalized marketing campaign. A good vendor can help you build important information into your marketing database, even if it s a simple spreadsheet, to prepare for a fully personalized campaign. In some cases, personalization can be geared to gathering preference data about your customers and prospects to enhance the personal information in each database record. 2. Provide a Valuable and Relevant Offer The offer is the litmus test for any marketing campaign. Marketers must design a valuable enticement that will invite contacts to respond and interact with your company. Different offers can be used based on personal preferences, and you can quickly test which offer performs better. 3. Test to Gauge Response Adding personalization in a marketing campaign allows you to test messaging, offers, and PURLs at many different levels. When carving out your campaign strategy, build in different testing options to gauge response rates on the variable data that is being used. Also test landing page behavior and links that visitors choose to seek out. 4. Choose an Experienced Personalization Vendor Marketing automation systems can track personal data, but they can t tell you how to execute a combination print/digital campaign using personalized variable data. Partner with a full-service vendor who can provide a soup-to-nuts approach in your campaign including: 3 Personalized print 3 3 PURLs 3 Promotional items 3 Mail and digital fulfillment 3 Campaign reporting 3 CRM integration Any successful vendor providing these services will be able to show you examples and results of other programs and help shape the success of your next personalized marketing campaign. 6 of 7

7 The Holy Grail: Achieving 1-to-1 Marketing As more marketers add personalized communications, we get closer to the oft-hailed holy grail of 1-to-1 marketing. With flexible yet powerful technology and the ability to report detailed campaign results and ROI, the road to personalization will become second nature to our marketing efforts. As adoption increases, the sophistication and level of personalization will continue to build and soon become expected by consumers. By making efforts to better understand and serve consumer needs, we ll encourage stronger relationships, more interaction, and regular feedback. Talk about the holy grail of marketing! About Universal Wilde Universal Wilde is the largest privately held print/communications business in the Northeast, providing complete end-to-end information management solutions. The company offers integrated print, mailing, and fulfillment and distribution services, plus the added advantage of an on-site award-winning direct response agency, an expansive promotional products division, and a fully functioning USPS facility. Discover how you can reduce your costs and improve your results by choosing a single trusted source for all your communication needs. FOR MORE INFORMATION Contact your UW representative, or visit us at: universalwilde.com 7 of 7 universalwilde.com 26 Dartmouth Street, Westwood, MA P F Universal Wilde. All rights reserved. WP