Why context is the key to unlocking true personalisation

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Until recently, marketers have failed to evolve along with the customers they’re targeting. While consumers have changed their purchasing processes and preferences to align with the new technologies and channels available to them, marketers lagged behind.

Even when attempting to push offers through these new channels, marketers are often still using the most basic customer demographic data to target customers. This has continued the era of spam marketing and ineffective mass communication. With the new age of customer intelligence well underway, marketers must advance beyond traditional analytics to start creating highly-relevant and truly personalised offers. At stake for the organisations that fail to transform: engagement, conversions and revenue.

Amazon and Netflix continue to show that context is a key component in the formula for success

With so many ways to reach a customer – including email, push notifications, text and social media – most vendors are promising personalisation and most brands are trying to create bespoke experiences. Despite these promises, execution is often lacking as neither marketing vendors nor brands are diving deep enough into customer data to create a complete profile and ensure accuracy in personalisation. In order to get to reliable, accurate personalisation, brands need to add context to their view of the customer.

Just as words can have different definitions depending on context, customers can take on different personas when context is examined. While demographic data such as age, income level and gender are good ways to categorise buying personas, they’re only the starting point.

Marketers have now realised that there is overlap and complexity within those classifications depending on the context in which consumers are buying. Even the same person can take on a different persona at different times. For example, a frequent business traveller might regularly book flights to Chicago and Milwaukee on an airline chosen by their employer. Later that day, the same person might look for flights to the Caribbean for their entire family with a different carrier preference.

In this case, “personalised” offers based solely on demographic data and purchasing history would be useless. Only when context is considered does true personalisation become possible and impactful, and lead to higher conversion and engagement.

The data disconnect

To obtain this complete view of the customer, brands must break down the silos between data and marketing teams. Big data and the proliferation of online, direct selling channels have made cooperation between analytics and marketing imperative for the success of sales and customer experience.

The need for context challenges analytics teams to go beyond examining traditional demographics and transactional data. While these two aspects are still important, it’s increasingly essential to layer behavioural analytics on top of that data to provide a 360 degree smart view of the customer.

Consumers have embraced the digital transformation. While personalisation techniques of the past may still impress the occasional technology laggard, the majority of tech-savvy consumers are increasingly finding them to be nothing more than spam. This half-hearted attempt to make a connection could prove costly. A recent Boxever survey found that when consumers experience this type of marketing:

  • 40% are less likely to buy from that company moving forward
  • 50% are less likely to open the next offer that comes from that company
  • 59% said they would unsubscribe from that company’s content

However, the news is not all grim for marketers. Today’s consumers are still more than willing to buy and engage, as long as marketers communicate properly. When asked what factors influence them to buy or act on an offer, 70% said when the offer adds value to something they are already or planning to do, while 42% said when the offer revisits a product or event they've expressed interest in previously.

The need for context challenges analytics teams to go beyond examining traditional demographics and transactional data

Along the same lines, 56 percent of consumers report wanting offers and communications tailored to their interests and needs, and 60 percent indicated they prefer offers that are targeted to where they are and what they are doing.

If those findings aren’t enough, consider the success of brands such as Amazon and Netflix. Both companies continue to show that context is a key component in the formula for success. Each company leverages a predictive recommendation engine – built on contextual customer intelligence – to keep consumers engaged. For Amazon, it’s about getting consumers to buy more. For Netflix, it’s about keeping consumers glued to their couches.

Marketers and data teams that work together to incorporate context and predictive customer analytics into their offers will have a leg-up on the competition. But as more and more brands embrace this concept, time is running out to hop aboard the context train.

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