Marketing is all about satisfying the needs of the customer. With advancements in technology, the way firms are doing marketing has been changing gradually. Personalization is a new marketing strategy that uses data to analyze customer behavior and recommend products they might be interested in. This will not only increase the sales of any firm but also increase the customer’s loyalty and customer experience.
Marketers use this technique to fulfill customer needs, which will also help build relationships between customers and businesses. The customer will be habituated to clicking on their recommendations to buy products. By using advanced technology like Artificial Intelligence, machine learning, and augmented reality, the customer will also get a virtual experience of that product. IoT helps businesses to collect data from customers that will help them to do several campaigns to increase customer engagement.
IoT is widely used in the digital marketing world. It brings the consumer and marketers close so that they can meet each other’s requirements. IoT helps businesses in product development, analyzing customer behavior, tracking data, and saving time to collect data. Augmented reality will enable customers to try their products in different places. Customers, for example, will be able to see the shoes he or she is wearing on the ground or on a mountain while sitting at home on their phones or laptops.
The global positioning system (GPS) technology will enable a customer to receive a message from the company about ongoing discounts if he or she is near any outlet. Personalized marketing is all about understanding the emotions of its customers and providing solutions for them through its products. For example, through a new feature designed by Amazon, it can detect illnesses such as nasal tones and will recommend cough tablets or tomato soup recipes.
Through machine learning, various firms are trying to develop a system where they can read the emotions of customers, whether they are angry, sad, happy, or in fear. This will detect the mood of their customers and recommend to them, through their mobile phones or laptops, watching a web series or finding some good restaurants near them. Businesses use analytics tools to develop strong personalization marketing strategies by knowing what customers have searched for in the past and what they want. Firms can predict the services or products customers need by collecting data through surveys and customer testing.
When a customer books a ticket for a flight, the next question after buying tickets should be about travel insurance, renting a car, or booking a room at a resort. This will increase the probability of buying any add-ons. The main concern for this type of marketing strategy is the privacy of the customer. They feel that they are being tracked by firms that can create issues. Personalized marketing is more expensive than traditional marketing. Many firms still can’t afford to implement this type of strategy as very advanced technologies are used that are costly. According to McKinsey, the COVID-19 pandemic accelerated the e-commerce industry by 10 years in just 90 days. People started buying products online, which also boosted personalization.
As per the reports of 360i Research, the software used for personalization globally was approximately $764.30 million in 2021, increased to $943.25 million at the end of 2022, and will rise to $2.72 billion by 2027. As per BusinessWire, the software for artificial intelligence used for personalization marketing will rise at a CAGR of approximately 13%. In 2017, the market share for the website personalization segment was nearly 34% of the market, but now display-ad personalization has surpassed website personalization and captured 35% of the market share in 2022. According to a McKinsey report, 71% of clients expect personalized interactions from businesses.
The report also included the fact that companies that have integrated personalization have generated 40% more revenues than companies using traditional marketing strategies. As per Evergage, 86% of marketers have analyzed that there is a significant rise in the profits made by businesses through personalization campaigns. Some of the strategies companies use are to allure clients with exclusive offers who are visiting your website for the first time and recommend more products during checkouts.
Personalization is all about knowing your clients. Companies like Amazon, Shopify, Netflix, Meta, Apple, Nike, and WooCommerce know how to lure buyers and make them more engaged with their sites. This strategy has its benefits and drawbacks, but in my opinion 10 years down the line, with more new technologies, personalization will surely reach its peak, and every company across the globe will be using it as its marketing strategy.
By: Karansingh Khatri
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