by Thakazelo Douw
If you have ever shopped online or seen online advertisements, you have encountered recommendation systems – they are the key to marketing personalisation.
With the continued popularity of YouTube, Netflix, Amazon and Spotify, recommendation systems are everywhere online. Examples include movies/shows on Netflix or book/clothing suggestions on Amazon.
Data scientists Baptiste and Joseph Rocca define recommendation systems as “algorithms aimed at suggesting relevant items to users (items being movies to watch, text to read, products to buy or anything else depending on industries)”.
91% of consumers say they are more likely to shop with brands that provide offers and recommendations that are relevant to them.
What is personalised marketing?
Personalised marketing means using data analytics to tailor the way your brand conveys messages in order to fit the individual needs of your target audience.
According to Sitecore, “collecting, analysing, and effectively using information about consumer demographics, interests, and behaviours will help you create campaigns, content, and experiences that resonate with your target audience.”
80% of consumers are more likely to do business with a company if it offers a personalised experience.
Customers are drawn to brands that meet their expectations and give them what they want. Marketers need to use smart personalisation methods to meet those expectations.
Companies such as Amazon, Netflix and Spotify are constantly looking for new ways to improve their recommendation systems.
“80% of consumers are more likely to do business with a company if it offers a personalised experience.” – Epsilon
Netflix’s Modus Operandi
If you’ve ever clicked onto your Netflix homepage, you have surely been greeted by movie/show recommendations specially tailored for you based on your streaming history and preferences.
According to Nicole Nguyen, a BuzzFeed News Reporter, “Netflix doesn’t rely solely on marketing campaigns to attract viewers. Instead, its army of designers, data scientists, and product specialists control algorithms that recommend content to its users around the world.”
They constantly generate and experiment with new ideas to ensure that whatever is distributed on its platform corresponds with what its users are thinking; this helps personalise the customer experience.
Netflix also provides recommendations to users through emails and notifications. According to Netflix Research, to “promote [their] service and original content, [they] develop budget allocation algorithms that decide what to advertise, to whom, and for how much.”
“They use search history, customer viewing data, rating data as well as time, date and the kind of device a user uses to predict what should be recommended to them.” – Astha Khandelwal
Spotify’s Use of Personalisation For An Upper Hand Against Rivals
Popular streaming service, Spotify, has demonstrated a thorough understanding of personalisation, with music recommendations and playlists suited to each user.
One of the reasons why Spotify is so successful is its ability to provide a personalised experience for its customers.
They have recently made use of music stories that recap users’ listening history in a fun and effective way. Examples are the annual #SpotifyWrapped campaign as well as the #OnlyYou campaign. Even the tag “Only You” suggests an intimate approach by the brand; they aim to target users directly and uniquely.
Spotify also curates “Daily Mixes” – these are personalised playlists based on your favourite songs and related music you might enjoy, and these playlists are updated every day. The daily mixes reflect your listening habits and include music you’ve previously listened to, as well as new recommendations.
Spotify has mastered using consumer data in a way that isn’t bothersome or annoying to its users; finding this balance in the marketing world where the privacy of consumers is compromised is not an easy feat. They also keep up with the latest customer trends & tailor their service accordingly.
Amazon’s Personalisation Strategy
Amazon is a leader in the e-commerce market because they understand marketing personalisation. As Amrit Kirpalani suggests, they have “perfected the personalisation of the shopping experience by connecting the dots between customer interests and creating customer-centric campaigns tailored to the right individual at the right time and place.”
Amazon takes into consideration factors such as purchasing history, personal browsing, related to items you’ve viewed, customers who bought this item also bought, to generate recommendations for each customer to help them in finding a product to buy. They ensure that not only does the product suit the customer, but also matches their personality.
Amazon developed their own recommendation algorithm, item-to-item collaborative filtering, that “matches each of the user’s purchased and rated items to similar items, then combines those similar items into a recommendation list for the user.” (Linden, Jacobi & Benson, 2001)
Benefits of personalised marketing
- Extraordinary customer experience
- Increased sales and revenue
- Higher customer retention
Huge organisations such as Netflix, Spotify and Amazon use strategic marketing personalisation methods. Personalised marketing creates a customer experience rivals can’t easily replicate.
This creates a positive experience for its customers which will then lead to customers becoming repeat buyers.
Marketers need to tailor their marketing to meet the individual needs and expectations of their customers; this will allow companies to remain relevant in the evolving digital age.
About the Author
Thakazelo Douw is currently a Digital Marketing Analyst intern at the International Institute of Digital Marketing ™ and she loves digital marketing! She is based in South Africa and is an avid reader, as well as a music enthusiast. You can also find her on LinkedIn: www.linkedin.com/in/thakazelo-douw-70b3a71bb/