Small businesses often rely on the personal touch to sell products and services. But today, technology is enabling businesses off all sizes to take personalization to new levels. Here’s what you may need to know about personalization, good and bad.
Why is personalization so important to consumers?
People often like to patronize businesses where they’re treated like an old friend, where the sales clerks know their name and the waiter asks, “The usual?” That personal touch has long been one way a small business can compete against the big guys.
Why is personalization becoming such a differentiator in business?
With more and more options available to consumers today—dozens of different kinds of toothpaste, thousands of websites selling the same things—one way consumers may cut through the clutter is by making buying decisions based less on the product or service itself, and more on their experiences with the business. Companies that offer personalization may stand out from the crowd. They may also simplify shopping and save time.
What’s a good example of personalization?
Sites that can identify a user’s likes and dislikes may excel at personalization. For example, a site where returning visitors are not only greeted by name, but are immediately served up product recommendations based on their past purchases, browsing history and the purchases and reviews of customers like them. The more you buy, the more easily the site can recognize your preferences.
Doesn’t too much personalization make customers paranoid? Don't most people dislike sharing personal data?
That depends on the data. More than two-thirds of customers are willing to trade away at least some personal information (such as name and demographic information) in exchange for better, more personalized offers, products and services, a survey by Transera Inc. reports. Younger consumers and more affluent consumers are more likely than other demographics to willingly share personal data.
That said, consumers are also a bit clueless: More than half don’t think their online activities or online shopping habits are being monitored by the websites they visit.
So how can a small business use personalization?
There are three levels of personalization. You may already be using basic personalization, such as sending email or direct mail marketing messages that address the recipient by name.
Then there’s limited personalization. This means segmenting customers by demographics, spending level, or other criteria and creating different marketing messages tailored to different segments.
Advanced personalization represents a major shift. Advanced personalization includes multiple personalized elements, happens in real time and is automated. For example, a site saying, “Hi, Rieva,” recommending items for me to buy, asking me to review my last purchase and reminding me of an offer it sent me that’s expiring soon is an example of advanced personalization.
How can I compete with big corporations when it comes to personalization?
“Small businesses can communicate with customers in a way that big box retailers can’t,” says Jake Gasaway, the founder of Stitch Labs, a San Francisco-based company that enables multichannel selling for businesses of all sizes. "Notes, personalized messages and checking in with customers will become big for small [business]. Making customers feel really great about their experience when they make a purchase will set small businesses apart and drive customer loyalty.”
In fact, it's getting easier for small businesses to incorporate advanced personalization tactics, as sophisticated marketing automation tools have begun trickling down to the small-business level. Using these tools, you can help personalize your business website and marketing messages based on things such as:
- Current customer or new customer
- Location (ZIP code, state, country)
- Desktop or mobile device
- Purchasing history
- Browsing history
- Referring website
- Items left in shopping cart
In a Listrak survey, 81 percent of consumers say they're at least somewhat likely to make a purchase after receiving a personalized email. Land just a few of those shoppers, and your personalization tool may pay for itself.
Read more articles on customer engagement.
This article was originally published on January 27, 2015.