Although thought leaders in the marketing industry have been preaching the benefits of personalization for years — and although we all know some amazing personalization campaigns, like #ShareACoke -there’s surprisingly been very little in the way of how to operationalize personalization or hard data around how effective personalization can be.
As a result, many mobile marketers don’t know how to get started or what they’re leaving on the table by not doing it well.
At Localytics, we analyzed 23 billion push notifications sent by Localytics customers during 2018 and let the data tell us exactly what personalization can do for increasing engagement, and the steps marketers need to take to realize these benefits.
Using a K-Means Analysis (also called K-Means Clustering), we uncovered the natural progression of digital personalization.
What did we learn?
You can put a brand’s marketing into one of four progressively more sophisticated groups based on what methods the brand uses to personalize their messages. We’re calling these four groups the Stages of Personalization. We also discovered that the more sophisticated the Stage, the better the average message performance.
We find that personalization actually offers a strong competitive advantage — and as a result, the effort to execute personalization can’t be viewed as “too time-consuming.” You need to make time to get it right. The returns are there.
These broader findings also align with consumer surveys: Per Salesforce’s State of the Connected Customer, 57% of customers are willing to provide their data in exchange for a more personalized experience. The problem is that only 22% of customers are satisfied with the level of personalization that brands are delivering, per Segment’s 2017 State of Personalization Report.
So, don’t leave us hanging. What were the four stages?
Glad you asked. First remember that all digital personalization efforts come when message, audience, and timing are combined properly. The stages reflect how advanced a brand is getting at mixing those different elements.
Stage 1: The Beginner Stage
Brands usually start out broadcasting their campaigns, meaning every customer receives the same message. Messages in this stage are similar to a billboard, as the message is shown to every possible recipient and it isn’t personalized for the viewer in any way.
Stage 2: The Intermediate Stage
In Stage 2, there’s a dramatic change as brands almost completely abandon broadcast messages and start to take their first steps in delivering a personalized experience by building their Audiences using Profile (name, age, gender, etc.) data, OR using Behavioral (opened app, purchased product, read article, upgraded subscription, etc.) data, but not both. These approaches show terrific results e.g. +6% in Open Rates and +48% in Conversion Rates – but it gets better, read on!
Stage 3: The Advanced Stage
After working through profile-only and behavior-only targeting, brands progress to Stage 3 using one of two methodologies:
- The Combination Methodology: The majority of brands progress to Stage 3 by making their Audiences more robust by using both Profile and Behavioral data. We’re talking some rich audience building here – real understanding leveraged to increase engagement.
- The Profile Audience + Dynamic Content Methodology: Brands using this approach stick to using Profile-only Audiences, but make up for the limited personalization of this approach by complementing it, with the use of dynamic content — think of that as rich, personalized pushes. For example, a retailer might have an audience of people who have unspent store credit. Using dynamic content, the retailer could send a message that mentions the recipient’s name and the amount of store credit they currently have.
Again, the results are impressive. Brands in Stage 3 see yet another jump in Open Rates, +43% vs. those in Stage 2, and Conversion Rate, +31% vs. those in Stage 2. Imagine what those types of results could do for your brand.
Stage 4: The Expert Stage
In Stage 4, brands fully embrace Profile + Behavioral Audiences as well as the use of dynamic content In addition, brands in Stage 4 make prodigious use of triggered and location-based messaging, not to mention continued use of A/B testing. All of these factors combine to deliver a potent personalized experience that sets these brands apart from its competition.
Have any brands reached Stage 4 in this data set?
That would be a no, but we fully expect that as we work with brands we’ll have a number of them at this advanced stage, realizing tremendous benefits, in no time.
But there is undeniable value in working the steps, because performance is improving as brands advance stages:
What could a brand do right now to personalize more?
Let’s give you two quick “hacks” you could experiment with today:
- Stage 2 — > Increase audience size without diluting the relevance of the message: Consider a travel app that wants to engage customers interested in New York City. They can build an two Audiences, one that includes users who performed event “Hotel Search” at least 1 time in the last 7 days where search location filter was “New York City” (behavioral data) and, one whose users favorite destination is “New York City”(Profile data). Although these groups seem to be very different, everyone is interested in updates about travel deals in New York City and deploying either or both is representative of a Stage 2 approach.
- Stage 3 — > Build audiences from a combination of app and non-app data: Because Profile data can come from non-app sources such as a CRM or DMP, Profile + Behavioral Audiences are a great way to combine behavioral data from inside the app with Profile data from other systems. For example: “Users who performed event “viewed product” at least 3 times in the last 7 days where the category was “Clothing” (behavioral data)and who have unspent store credit (Profile data from CRM system)
Determining your Brand’s Stage
So, you’re probably asking yourself, where does my brand sit within the Stages? This is actually a question that needs to take into account three factors – 1) the level of personalization as it relates to the audience – e.g Profile or Profile + Behavioral, 2) the message i.e. are you using Dynamic Content and/or A/B testing and 3) are you sending your message at the same time to everyone or sending by timezone. You can use our Personalization Performance Calculator to determine your stage based on the answers to these questions.
Make personalization work for your brand
Brands think that instituting personalized campaigns will be too time-consuming, whereas broadcast is quick, easy, and gets some results. Broadcast does get some results, but not nearly on the level that personalized digital campaigns can get. And yes, there is some work on the front-end to set up audiences properly, but these effects can be achieved in a few hours at most. It is minimally time-consuming, but the results are worth it. So, whether you’re in Stage 1, Stage 2 or Stage 3, there’s benefits to be realized – jump in and let us know how we can help.
Where can I learn more?