From Many to One

By Team ZineOne October 2, 2019

Transitioning from Market Segmentation to 1:1 Personalization

Market segmentation, the marketing practice of clumping select groups of likeminded individuals into target markets, has been around for decades. Historically, market segmentation worked as follows: as long as the enterprise could effectively bucket consumers who share similar traits and buying patterns into a target persona, they could appeal to customers en masse with a singular message.

However, as technology evolved and consumers became more and more accustomed to highly precise, highly personalized outreach, capturing customer loyalty required enterprises to provide a kind of individualized attention beyond which mass personalization could achieve. This translated to a need for enterprises to re-evaluate their approach to customer engagement and personalization.

The History of Personalization

Where are personalization efforts trending today? According to Gartner, 80% of marketers report that they take a segment-focused approach to personalization.  Yet, 50% of marketing leaders seek to achieve a one-to-one approach to personalization across their organization moving forward. As part of this transition from a one-to-many to a one-to-one approach, enterprises must develop a learning relationship with each customer from the get-go, constantly acquiring more knowledge at every step of the customer journey. By combining historic, real-time, and environmental data, enterprises can then begin to engage in 1:1 personalization.

Today, these efforts are increasingly made possible through the use of machine learning (ML) and artificial intelligence (AI). In fact, ML personalization is up from 26 percent last year to 40 percent this year, indicating that more and more business leaders are not only transitioning their marketing models from segmentation to 1:1 personalization, but also that AI-based solutions will be the cornerstone of future efforts.

The Limitless Potential of 1:1 Personalization

Let’s look at the facts. 75 percent of consumers are more likely to buy from a retailer who knows their purchase history and provides personalized recommendations, and 63 percent of customers say organizations should make ‘getting to know them’ a top priority. By taking a segment-based approach, enterprises can get part of the way there. For instance, segmented email marketing has an approximate return of $47 for every dollar invested. This is due to the relevancy and timeliness of the content to a particular segment. Now imagine the potential if emails were fully personalized, speaking to a specific customer’s in-the-moment context, purchase history, known preferences, and current environmental conditions.

For a select few, a highly personalized approach to customer engagement is the modern reality. According to Gartner, these industry leaders have achieved 1:1 personalization across email (12%), all web users (3%), registered web users (9%), mobile app (4%) and social platforms (4%). As 1:1 personalization becomes more germane, industries will continue to experience transformative opportunities to build loyalty, engage customers, and increase sales. Let’s take a look at some examples:

  • Retail: Jane scrolls online her favorite retailer’s website looking for work dresses, but doesn’t make a purchase. Later that day, Jane enters a shopping mall and penetrates the retailer’s geo-fence. Aware of her current location and earlier searches, her customer loyalty app pushes her a message, saying “Jane, it’s dress season! Get $5 off your purchase of a full price dress.” Intrigued, she heads to the store. Upon entering, the app pushes her another notification that presents a dress she had placed in her digital cart that morning: “Only 3 left in your size! Try one on now.” She shows the notification to a sales associate, who quickly directs her to the perfect dress.
  • Hospitality: While waiting for her flight to Florida, Nancy gets an email from her hotel promoting their digital concierge app that has members-only promotions. She downloads the app and begins browsing for outdoor activities near her hotel. Upon arrival, she checks in at a kiosk that leverages her historical browsing patterns to push her a relevant promotion: “Welcome, Nancy! Enjoy 20% off an outdoor adventure.” Using her card already on file, she books an excursion.
  • QSR: Brandon stops by a local fast food joint with his family on a hot summer day. They access their customer loyalty account at a kiosk, which displays a message that says, “Do you want to order from your favorites?” He taps the message, and the kids add their favorite meals to the order and proceed to the checkout. The QSR recognizes that Brandon ordered two kids meals, and so sends him a buy-one-get-one kid-sized ice cream offer. Excited by the cool treat, Brandon adds the offer and completes the order. 

For enterprises seeking to transition their segment-based approach to customer personalization to 1:1, the first step is identifying a robust technology platform that breaks down customer data silos to deliver individualized experiences at ever interaction. At ZineOne, our AI-powered Intelligent Customer Engagement (ICE) platform is that solution. By recognizing customer’s in-the-moment context and specific purchasing patterns, we deliver better value at every interaction for long lasting loyalty and increased sales. Contact ZineOne today to discover how our powerful ML model can take your business from a segmented, one-to-many approach to an individualized, one-to-one approach.

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