What Is Personalized Marketing? A Beginner's Guide For Small Businesses

Personalized marketing yields content that truly speaks to your target audience.

Attention, business leaders and marketers: How important is personalizing your marketing content? It turns out, very.

You might think simply sharing a high-quality, well-thought-out message that speaks to your business and what you have to offer is enough, but consumers expect much more these days. In fact, 40% of consumers say they would stop doing business with a brand when they perceive a communication as irrelevant.

Yes, you read that right. Marketing personalization is no longer just a nice to have. It’s crucial to strive for messages that truly resonate with your target audience both on a demographic level and an individual level. Embracing personalization in this way builds trust and helps you meet your customers’ specific needs.

What is personalized marketing?

Personalized marketing is a marketing strategy that involves crafting marketing messages that resonate with a specific target audience, ideally down to the individual consumer level. This is accomplished through a mixture of technology, customer data management, and the strategy a business uses to create and share those marketing messages.

There are a variety of factors that can be personalized: the content of the message itself, the channel it’s shared on, the type of media used (e.g., text, images, video, etc.), and more. This is all guided by customer data that’s collected over time and used to create buyer personas that speak to a business’ ideal customer.

Why is personalized marketing important?

In addition to the 40% of respondents who would stop doing business due to irrelevant messages, a further 55% of consumers say they would stop doing business with a brand over messages they find invasive.^[1] A message being deemed invasive is a little more extreme than one that’s merely irrelevant, but the point remains that over half of consumers are ready to move to a competitor simply due to improper messaging.

Taking the time to truly understand your audience through demographic and firmographic info, customer surveys, and the collection of sentiment from sources like social media and email marketing activities allows you to meaningfully adjust your messaging to avoid losing customers.

Benefits and challenges of personalizing marketing content

   Personalization benefits

Personalized marketing is all about offering a better customer experience through personalized content. Whether that means crafting content a potential customer is personally interested in, promoting offers that meet their needs, offering personalized recommendations, or even including subtle nods to who they are within your marketing messages. Additionally, improving the customer experience has a compounding effect that contributes to other aspects of personalization as well.

• Improved customer experience: The biggest benefit—and overall goal—of personalized marketing is a marked increase in customer satisfaction. Focusing on a target audience to deliver content that’s personally relevant leads to increased brand loyalty, engagement, and retention. You can also learn more about your customer journey along the way, discovering customer behavior through data collection and devising best practices for improving your overall personalized marketing strategy.

• Further refined audience segmentation opportunities: One of the ways this more personalized experience is realized is through enhanced audience segmentation. Collecting and analyzing customer data to drill down on who your ideal customer is allows for better personalization and offers more ways to contextualize (and respond to) specific touch points along the buyer journey.

• Increased marketing ROI: Improving in these areas to deliver better, more relevant content to your most loyal customers will bear a marked increase in your marketing ROI. You’ll spend less budget chasing less-than-ideal audience segments, increase customer loyalty and trust, and have more data on who your target audience is to be more efficient with your marketing dollars overall.

   Personalization challenges

While personalized marketing is an excellent way to boost customer engagement and retention, there are some particular challenges that may hamper results. Planning ahead to address these helps mitigate their effects, ensuring a smoother process for introducing (and scaling) your personalization efforts.^[1]

• Scaling difficulties: It can be difficult to properly scale personalization efforts due to budget constraints or competing priorities. Work to implement personalization in a cost-effective way that doesn’t overwhelm complementary efforts such as content creation and reporting. Aligning your personalization tactics with strategic marketing goals is a great way to ensure your efforts are contributing to overall organizational objectives.

• Falling short of expected ROI: This can happen as a result of strategic misalignment with business objectives, misguided investments, or a failure to set and uphold realistic expectations. Regardless, this challenge can lead to deprioritization of personalization efforts and must be avoided with specific steps taken to demonstrate value before, during, and after implementing personalized marketing tactics.

• Managing inertia and misalignment: This third challenge goes hand in hand with the previous two. Essentially, it’s absolutely crucial to be in lockstep with all parties involved in planning, executing, and managing personalization efforts. Ensuring tactical, strategic, and objective alignment promotes progress and prevents the type of stagnation that could potentially lead to deprioritization by marketing leadership.

Personalized marketing tools and resources

   Technology

To effectively implement personalized marketing tactics, you’ll need software that supports audience segmentation, content curation, and marketing automation functions such as reporting. Customer data platforms, content management systems, and marketing automation software all fit the bill here, however, it’s not always possible to onboard one tool let alone three. We suggest first starting with a robust customer data solution to begin (or continue) the important work of crafting specific buyer personas to create personalized campaign content for.

   Expertise and support

Depending on the size of your marketing team, you may not have someone on hand with the knowledge to specifically oversee personalization efforts. There are many online resources (like this article and others on the Capterra blog) that can help bridge the knowledge gap, and there’s also the option of hiring a third-party service to aid in bringing you up to speed. 

Agency relationships range from ad hoc services that help with specific tasks all the way to long-term strategic partnerships. Depending on your projected timeline, goals, and resources, you’ll be able to determine an appropriate level of support and avoid spending unnecessary resources to get the help you need.

Putting it all together: Is personalization right for my business right now?

Now that we know personalization is important to consider for any marketing program, what about yours right now? Based on the opportunities, challenges, and necessary resources presented here, there’s a conversation to be had that includes both you as a small business owner or marketing leader and any other marketing stakeholders.

Seek to address questions such as:

• What resources do we have in place now?

• What resources are we missing that would allow us to be successful?

• Do personalization tactics contribute to our current marketing goals?

• Is our customer data strategy ready for more advanced segmentation?

Cautiously approaching your personalization strategy with these questions in mind will help you determine whether or not now is the right time. If you don’t think you’re ready, use these guiding questions to set a long-term plan that will allow you to meaningfully embrace personalization when the time comes.

Eager to learn more about what you can do with an improved marketing strategy? Check out the Capterra blog for new content all the time, and start with these helpful resources:

• Brand Storytelling: Crafting a Narrative for Your Small Business

• Analyzing Marketing Data: A 5-Step How-To

• Online Marketing for Small Business: Strategy Tips From Successful SMBs