Personalising the Customer Experience: How AI is Reshaping Digital Marketing

Personalisation allows businesses to provide a better customer experience and stand out from their competitors. Although getting started with personalisation can seem daunting, the benefits speak for themselves. Let’s chat about what personalisation can do for your business and how you can overcome some of the common challenges.

 

What is personalisation and why is it important in digital marketing?

Personalisation refers to the process of knowing the needs, preferences and interests of your customers so you can provide them with exactly what they’re looking for when they’re looking for it. When done right, personalisation can help you better engage your customers, increase loyalty and retention, and boost sales.

 

How is AI used to personalise customer experience and what are the benefits?

Artificial Intelligence (AI) personalisation involves collecting a vast amount of data, from demographic information to purchase history, which can be used to learn their specific needs and preferences. There are plenty of benefits involved in utilising AI personalisation, here are just a few.

Provides a better customer experience

AI-powered personalisation allows businesses to engage with customers on a more individual level. The ability of machine learning to analyse customer data and behaviour patterns enables them to deliver personalised recommendations, offers, and content. This leads to increased customer engagement and satisfaction.

Saves time

With AI, you can significantly reduce the time and effort required to personalise customer experiences. AI has the ability to process large amounts of customer data, identify patterns, and make recommendations much faster and more efficiently than manual methods. This saves businesses time and resources while delivering personalised experiences at scale.

Increases conversion rates

By delivering tailored recommendations and offers at the right time, AI-driven personalisation can improve conversion rates. This is where marketing automation comes in. AI algorithms understand customer preferences and can use automated predictive analytics to suggest products they might be interested in.

Reduced customer churn

Customer churn refers to the percentage of customers who stopped purchasing your business’ products or services during a certain period of time. Providing a personalised experience for each customer helps reduce customer churn rates. Customers are more likely to stay loyal to a business that understands their preferences and can meet their needs.

Provides data-driven insights

AI-powered personalisation provides valuable behavioural data which businesses can use to understand their customer’s behaviour and preferences and optimise their marketing strategies.

Offers a competitive advantage

Customers are increasingly expecting a personalised experience and will be more likely to choose businesses that offer one. By utilising AI to personalise the customer experience, businesses gain a competitive edge and stand out in the market.

 

Real-world examples of successful personalisation

Grammarly’s weekly usage reports

Grammarly takes improving your writing to the next level by sending out weekly reports. These reports include how many words you have written that week, how many mistakes you made, and insights into potential areas for improvement.

Nike’s personalised shoes

Nike’s leap into personalisation starts with their 3D sneaker customisation platform where you can build custom-designed shoes that perfectly fit your feet and style. Their loyalty program also provides personalised benefits plus the ability to scan items to see if they are available in your preferred colour and size.

Starbucks’ personalised perks and freebies

The Starbucks app provides a personalised ordering experience by remembering your favourite drinks and providing perks and freebies based on your preferences. Starbucks also uses an AI algorithm to develop dynamic content and sends more than 400,000 versions of personalised messages to customers to promote unique offers.

 

Overcoming the challenges of personalisation

Despite the advantages of personalisation, it can be tricky, particularly when you’re working with large data sets. Some common challenges to do with personalisation include:

Lack of quality data

Data quality can be a challenge as personalisation requires a single, unified source of accurate information. Targeting based on incorrect information can be harmful, causing customers to ignore your messaging or even turn them away from a brand. Luckily, there are steps you can take to help overcome these challenges. Choosing the right AI and data analytics tools is a good place to start – evaluate their features, cost, and compatibility to find the right one for your needs.

Customer segmentation challenges

Segmentation is a key part of effective personalisation. By isolating and targeting specific groups, businesses can improve the customer experience and increase their chances of conversion. However, segmenting the customer base and accurately targeting customers within each segment can be tricky.

To get started with segmentation, you can start with demographics or geographic information if relevant. Lifestyle segmentation can also be useful to target customers, particularly share lifestyle interests and hobbies.

Omnichannel marketing challenges

Omnichannel delivery involves delivering a personalised customer experience regardless of which channel they use to interact with a business. A major obstacle to omnichannel delivery is difficulty identifying which channel a customer first engaged with and what channel influenced them to make a purchase.

Luckily, this can be resolved by utilising robust marketing technology which can track all kinds of marketing activity and not just the point of conversion.

 

The future of personalisation with AI

Customer data platforms become essential

The increasing amount of data, especially first-party, being collected will require businesses to utilise customer data platforms (CDPs) to manage it. CDPs also allow brands to have a unified view of each customer which can make it easier to personalise experiences.

Security becomes more important than ever

According to Forbes, almost 1 in 4 consumers report they are less comfortable with their data being used for personalisation compared to a year before. This emphasises the importance of businesses proving that they can be trusted to handle customer data securely so customers are comfortable providing the insights required for better personalisation.

Evolving tools to measure personalisation success

According to international personalisation research conducted 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% report that time savings are what makes personalisation successful. One thing that’s for sure is that personalisation technology will continue to evolve and our approaches to measuring its success with it.

 

Ready to harness the power of AI personalisation for your business? Get in touch to find out how OMDIGI can help.

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