This time it's personal
Those of us who were introduced to the marketing mix at school know it as the 4 Ps: price-product-place-promotion. This may have been simplistic even in the days of one-to-many marketing, but it’s definitely time for an update: now marketers rely heavily on personalization to get the right message out at the right time.
You can’t rely on transactional data
It’s hard to personalize marketing effectively if you’re relying solely on historical data. Sure, you know Tim likes chocolate because he buys it several times a week, but without some more information you can’t guarantee your Free-Chocolate-With-Purchase promotion is going to reach him at the right time. Sending him an alert when he’s at work an hour away is not going to get him back in store in a hurry; sending it when he’s actually nearby and in a position to act makes much more sense. But to be able to offer that level of personalization you need to
collect contextual data – customer preferences, location, traffic conditions, even the weather.
Personalization increases immediate relevance
Most retailers hold a wealth of transactional data: what customers bought, in what combinations, and when. Which is necessary, because without it you’d be annoying customers with a bunch of generic and largely irrelevant messaging. The real advantage comes from collecting contextual data, giving you more information on what customers are doing now and helping predict what they’ll do in the future.
One of the best sources for this data is the humble smartphone - nearly everyone has one (at least one!) and nearly everyone takes them nearly everywhere. Research by Deloitte shows that most people use mobile devices to influence their purchase decisions – over 70% use them in-store – and people who use these devices are more likely to convert. If mobile retail apps are configured to collect location, social and other lifestyle data then you have a potential treasure chest of data waiting to be plundered. Your records may tell you which customers have hay fever, but how much more awesome would it be if you could then send targeted messages for hay fever medication when those customers are actually near your stores on days when the pollen count is out of control, humidity is low and the wind is rising?
The meat pack example:
You’re probably not going to get quite this manic about personalizing your promos, but here’s how maverick Guatemalan shoe retailer Meat Pack used customer location data to get customers running (literally!) in store. https://www.youtube.com/watch?v=yH8Br_f3p9E - watch your volume on this one…
Privacy, Protection and Permission also start with P
In return for volunteering the personal details required to get this level of personalization, customers expect a certain level of privacy. Specifically, they expect that their personal information’s only going to be used by the company they gave it to (in a reasonable way) and not used by anyone else for any other reason. Privacy is obviously a massive and fraught topic, but in brief: collect only what you’re going to use to personalize the shopping experience (if you’re not sending a birthday promotion, don’t ask for a birth date), and only personalize what’s appropriate. The more you can cleverly aggregate or anonymize, the less risk there is of compromising someone’s personal data. Or seriously creeping them out.