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    January/February 2006
   
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The Power of Personalization

Debunking the data myth
Whether you're using customer segmentation or full one-to-one marketing, you can use available customer data to generate profitable behavior. Though the more sophisticated your customer knowledge, the better, you can make an impact even with basic information like name, address, products used, anniversary/renewal date and assigned representative when applicable. The idea is to start using this information.

It's also easy to develop more robust customer profiles using segmentation systems (like those from marketing research leader Claritas). An analysis of your customer base can reveal detailed demographic and psychographic information that can be used to better inform all areas of your communications - including vehicle, copy, design and offer strategy. As these customer insights are combined with observed behavior, like shopping patterns, you get closer to an individual portrait that enables even deeper relationship building.

RELEVANCY RULES

  1. The right offer – the right customer – the right time

  2. Reduce waste of mass mailings

  3. Increase response rates and decrease response time

  4. Apply to your most valued customers to reduce cost

  5. Test, test and retest

 

Relevancy Rules

Finding a balance
Using your customers' personal information has its risks too. Effective personalization can surprise and delight; too much can be creepy and raise privacy concerns. Follow these general principles so you send the right message:

Consider the intimacy of the relationship.
  If this is the first contact, you may not want to use more than a simple name salutation. If you’ve been doing business for years, though, don’t act like a stranger.
Overtly apply data the customer volunteers.
  If a customer has taken the time to share information with you, make sure you’re paying attention.
Subtly apply data the customer hasn’t provided.
  Here’s where profiling comes in handy, ensuring the creative is representative of the customer’s lifestyle and demographic traits.
Leverage the power of permission.
  The ideal situation is to have customers opt in to a one-to-one program where they expect a personal, ongoing exchange.

When conducting any kind of personalization, make sure you stay within your data capabilities. If your content or timing is off target, you risk alienating customers instead of forging stronger relationships.

The future starts today
Using relevant communications creates a win-win situation for marketer and customer. Once you've formed a bond, it will be even harder for that customer to leave and establish trust with another. Over the long term, your relationship - and subsequently your bottom line - will profit from a sincere knowledge and appreciation of what makes the customer unique.

Even if they don't all look like Tom Cruise.

 

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As president of First Marketing, Ron Drenning champions strong retention strategy and consults with Fortune 500 companies to build lasting brand relationships with their customers. Ron can be reached at
rdrenning@first-marketing.com.
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