Personalisation helps businesses give customers a better experience and stand out from competitors. Getting started can seem daunting, but the benefits are clear. Here’s what personalisation can do for your business and how to get past some of the common challenges.
What is personalisation and why is it important in digital marketing?
Personalisation means understanding your customers’ needs, preferences and interests so you can give them exactly what they’re looking for, right when they’re looking for it. Done well, it helps you engage customers, build loyalty and retention, and boost sales.
How is AI used to personalise customer experience and what are the benefits?
AI personalisation involves collecting a vast amount of data, from demographic information to purchase history, and using it to learn each customer’s specific needs and preferences. It has plenty of benefits. Here are just a few.
Provides a better customer experience
AI-powered personalisation lets businesses engage with customers on a more individual level. Machine learning can analyse customer data and behaviour patterns to deliver personalised recommendations, offers and content, which leads to more engagement and happier customers.
Saves time
AI cuts down the time and effort it takes to personalise customer experiences. It can process large amounts of customer data, spot patterns and make recommendations much faster than manual methods. That saves businesses time and resources while delivering personalised experiences at scale.
Increases conversion rates
By delivering tailored recommendations and offers at the right moment, AI-driven personalisation can lift conversion rates. This is where marketing automation comes in. AI algorithms learn customer preferences and can use automated predictive analytics to suggest products people might be interested in.
Reduced customer churn
Customer churn is the percentage of customers who stop buying your products or services over a given period. A personalised experience for each customer helps bring churn down, because people are more likely to stay loyal to a business that understands their preferences and meets their needs.
Provides data-driven insights
AI-powered personalisation produces valuable behavioural data. Businesses can use it to understand their customers’ behaviour and preferences and to improve their marketing strategies.
Offers a competitive advantage
Customers increasingly expect a personalised experience and are more likely to choose businesses that offer one. Using AI to personalise the customer experience gives you an edge and helps you stand out in the market.
Real-world examples of successful personalisation
Grammarly’s weekly usage reports
Grammarly takes writing help a step further by sending weekly reports. They show how many words you wrote that week, how many mistakes you made, and where you could improve.
Nike’s personalised shoes
Nike’s push into personalisation starts with its 3D sneaker customisation platform, where you can design shoes to suit your feet and your style. Its loyalty program also offers personalised benefits, plus the ability to scan items to see if they’re available in your preferred colour and size.
Starbucks’ personalised perks and freebies
The Starbucks app personalises ordering by remembering your favourite drinks and offering perks and freebies based on your preferences. Starbucks also uses an AI algorithm to develop dynamic content, sending more than 400,000 versions of personalised messages to customers to promote unique offers.
Overcoming the challenges of personalisation
Personalisation has its advantages, but it can be tricky, especially with large data sets. Some common challenges include:
Lack of quality data
Personalisation needs a single, unified source of accurate information, so data quality can be a challenge. Targeting based on incorrect information can do harm, causing customers to ignore your messaging or even turn away from your brand. Luckily, there are steps you can take. A good place to start is choosing the right AI and data analytics tools. Compare their features, cost and compatibility to find the right fit for your needs.
Customer segmentation challenges
Segmentation is a key part of effective personalisation. Targeting specific groups helps businesses improve the customer experience and increase their chances of conversion. Segmenting your customer base and targeting people accurately within each segment can be tricky, though.
To get started, you can segment by demographics or, if relevant, geography. Lifestyle segmentation can also help, particularly for customers who share interests and hobbies.
Omnichannel marketing challenges
Omnichannel delivery means giving customers a personalised experience no matter which channel they use to interact with a business. A major obstacle is working out which channel a customer first engaged with and which one influenced them to buy.
Luckily, you can solve this with strong marketing technology that tracks all kinds of marketing activity, not just the point of conversion.
The future of personalisation with AI
Customer data platforms become essential
Businesses are collecting more and more data, especially first-party data, and they’ll need customer data platforms (CDPs) to manage it. CDPs also give brands a unified view of each customer, which makes personalising experiences easier.
Security becomes more important than ever
According to Forbes, almost 1 in 4 consumers say they’re less comfortable with their data being used for personalisation than they were a year earlier. Businesses need to prove they can handle customer data securely, so customers feel comfortable sharing the information that better personalisation depends on.
Evolving tools to measure personalisation success
According to international personalisation research by Twilio, the best way to measure success with AI personalisation is still up in the air. While 47% of businesses say accurate data is a measure of success, 42% say time savings are what make personalisation successful. One thing is certain: personalisation technology will keep evolving, and so will the ways we measure its success.
Ready to harness the power of AI personalisation for your business? Get in touch to find out how OMDIGI can help.
