5 Tactics to Evolve Marketing from Segmentation to Individualization

“What’s the value of a shopping cart?”

This is the question Forrester Principal Analyst Brendan Witcher posed to listeners to kick off the recent Signal-hosted webinar The Age of Individualization: How Identity Is Transforming the Retail Experience.

Imagine you’re going grocery shopping and the store doesn’t offer a cart, Witcher explained. As a marketer, you may respond that there’s no clear way to measure the ROI of a grocery cart, but as a consumer with a week’s worth of groceries, you may likely walk out the door — and that’s the most valuable piece of information any retailer needs.

“Products have become table stakes,” Witcher said. “Customers have options. The store itself isn’t luring customers: the experience is. And after one bad experience, customers will abandon a brand.” Citing recent research, Witcher said more than two-thirds of shoppers are unlikely to return to a website that does not provide a satisfactory customer experience.

But here’s the catch: satisfactory customer experiences are unique to each individual. And right now, most brands are marketing to segments of many, instead of segments of one.

In our era of hyper-adoption and hyper-abandonment, what passes today for personalization isn’t cutting it. While 89% of retailers claim to be investing in personalization, Witcher said only 40% of consumers believe information they receive from retailers is relevant to their individual tastes and interests. This disparity he largely attributed to retailers’ use of outdated segmentation strategies that often use single data points to personalize buyer journeys. Yet knowing one thing about an individual does not define a customer — meaning personalization based on segmentation provides the wrong experience most of the time to most of the people.

The more data you have about a customer, the more you can personalize experiences. And this means much more than birthday acknowledgements and product recommendations, stressed Witcher. It’s about recognizing an individual throughout her customer journey and capturing, measuring, accessing and addressing her intent with truly individualized experiences that offer value and meaning.

Sure, the right technology is key to driving this type of individualization, and Witcher highlighted the need for fully integrated solutions that create rich, durable customer profiles. “But it’s not just about technology,” he added. “It takes a total buy-in across the organization to be a different company tomorrow. Brands need to stop thinking about individualization as a tactic and think about it as a strategy.”

Right now, Witcher said, no one is achieving individualization greatness. Some retailers are doing it great in different places, and he called out a few examples in the webinar, among them Sephora and Neiman Marcus. But, obviously, the objective is to do it great everywhere. Here are the five things Witcher said retailers can do now to get on the path to individualization:

  1. Consolidate customer data from both internal databases and external partners into a single, centralized repository.
  2. Identify personalization gaps throughout the digital journey and strategize ways to fill them.
  3. Design customer interactions with the intent to both collect and use individual customer data across the enterprise — not just within marketing channels.
  4. Explain to customers why you are collecting customer data — and use it to create great experiences that need no explanation.
  5. Use personalization to solve customer pain points before trying to surprise and delight them.

“Be smart about your approach to marketing,” Witcher closed. “Think of yourself as someone whose primary job is ‘Do I know my customer?’ and ‘Do I know how to satisfy my customer?’ Then ask if you have the data to do that.”

In other words, put yourself in the shoes of your customer. And ask what that shopping cart means to you.

To hear all of what Witcher had to say about how individualization can transform the retail experience — and for tips from Dean Murr, founder of Programmai and former senior programmatic manager at apparel retailer ASOS.com, on optimizing marketing spend by implementing more effective ad retargeting strategies — watch the complete webinar recording The Age of Individualization: How Identity is Transforming the Retail Experience.

Originally published August 14, 2018

Kathy Menis

Kathy is an expert in technology marketing, with 20 years of experience creating and leading strategic, results-driven marketing programs. She was formerly the CMO at Signal.

Subscribe for Updates