Below is an article I wrote for a publication recently. It’s a pretty lengthy one :-)

Thank you for reading this letter about the value of personalization in marketing. [FIRSTNAME], we will be covering a little bit of the history of personalization in this article, but there have been great advancements in this highly successful technique where consumers may not even be aware that information about them and their habits is being collected, organized and sold. And guess what. It’s working. It’s working for consumers and it’s working for the companies that employ the strategy and stay agile enough to respond to the results. The ones that don’t, well, they watch and hope and wonder. Using the personalization and the tools that support it takes your marketing efforts beyond impulse buys or even reinforced, research-based decisions. Personalization takes you into the realm of deep-seated loyalty – the Holy Grail of marketing.

Successful companies apply strategies to understand, connect with and influence target consumers that go far beyond the typical surveys and exit interviews. In a sense, it gives consumers an unprecedented power to influence products and services. But for marketing professionals it sets a high benchmark in consumer-organization relationship building necessary to be competitive in today’s global environment. You are probably familiar with personalization to some degree. We have all received an addressed flyer in the mail where your [FIRSTNAME] and [ADDRESS1] [ADDRESS2] [CITY] [COUNTRY] are purchased from a list company and used in “targeted” campaigns. You are aware that online social media advertising can target fairly well-defined groups with specific messagaing. But personalization’s roots go back millennia, to a time when bartering depended on entering a marketplace knowing the wants and needs of another person. The more they knew, the more leverage they had with their goods – a hungry man would trade his golden robe for a goat, a well-fed man would trade much less.

Enter the salesperson. Savvy and confident in his wares, the salesman would learn your name and know your neighborhood. He would tell you [MR.-MRS.-MS] [LASTNAME], that he just spoke with your neighbor who is very interested in the product. He would determine your need to match the neighbor’s purchase with one of your own. He would make note of your tendencies, the way you dressed, how busy your house was, when you were home. Though time-consuming, this method of personalizing the sales pitch was extremely successful.

The reason? Well, [FIRSTNAME], this gives the seller the opportunity to see the consumer’s reaction to their pitch, The seller can see this feedback immediately and adjust it right away until the consumer is convinced they need the product. According to a 2009 Forbes Insights survey of 760 business executives, face-to-face interaction was most critical for persuasion (91%), decision-making (82%), and candor (78%).

Today, marketing professionals have many more tools at their disposal. For the salesperson in the pre-Internet world, generating quality referrals was often arduous. Now, thanks to technology and digitized ingenuity, the entire world is at your fingertips – and that technology is telling marketing professionals and database managers pretty much anything they want to know. It is reading the feedback of the consumer and that feedback is coming almost instantly. Technology is even allowing marketers to anticipate consumer reaction and cross-reference consumer information to build an amazingly detailed profile.

Right now, Google is the primary search engine of the world. When your company name becomes a verb for what you do, you have hit the big time. Don’t understand what that means? Google it. Likewise, Facebook and Twitter are intimately aligned with over a billion people who use hash tags, buzz words and likes to express their every cause. Every touch point on the Internet accessed by a user has left a trace of the user behind, and, it is there to be used.

Organizations know that Google, for instance has a vault of information in its user database; “users” being pretty much the entire digitized portion of the planet. However, they do not have a lot of purchase information. Google is capable of identifying users who have been looking for information on the Internet that might be related to your product. When you purchase an ad on Google, you can connect to these people in the form of ads.

This level of personalization helps you to mine the entire world at once for your target consumer for the right sorts of things or spent time in the right sites, ads from organizations that might are a fit for their habits and geographic location are pushed to them. When consumers conduct a search through Google, the results are not particularly generalized. A search for Thai restaurants will not simply list the restaurants found in Thailand. Google knows they mean restaurants near them. And if they use Wi-Fi to link to the Internet, Google even knows that [NEAR] them means, [NEAR] whatever Internet provider’s [IP] address they are conducting your search.

Organizations also have a lot of information collected over the years from purchases histories and through those “help us serve you better” comments or ratings pages and credit applications. In addition, [FIRSTNAME], organizations are collecting data on billions of Internet travellers every day. This information is translated into online advertising messages, automated emails, and automatic text messages. The “friendly” market is defined by their customer list.

The true magic comes when these two types of information are cross-referenced. This is where marketers earn their money. Amazon has most completely harnessed this magic. If you have ever purchased an item through Amazon, they have all the information they need, but even if you haven’t, they are approaching you with targeted communications. When you conduct an Amazon search, for instance, for a new cell phone, Amazon immediately captures information about your computer and every item you have browsed. Within the next day or two, take a look at your Facebook account (you are one of the 1.6 billion Facebook users, aren’t you?). As you scroll through, or open and close the app, pay attention to the paid ads on the page. All of a sudden, they are showing you ads for cell phones and related items. Coincidence? No.

Complex algorithms and data collection software are hard at work evaluating every electronic interaction. The technology exists to identify how you came to a web page, how long you were there, where you went after, whether you ever return, how often, what links you scrolled over and how quickly. This barely scratches the surface of the information consumers leave behind every day. This information can be used to determine habits and triggers that lead to sales – your habits and triggers. Smart marketers will use this information. First, to identify and articulate whom exactly is the target market for their product or service. Second, to start to build top of mind brand positioning (perhaps even leading to a sort of industry expert status) through targeted social media advertising and browser ads and articles in addition to developing better keyword associations and other search engine optimization (SEO) techniques for their websites and apps.

All these little touch points lead to big data – the collection of the minutiae that, when properly analyzed, should give insights into your habits as a consumer. When an organization matches its data to that of Google, the direct advertising possibilities are endless. Many countries have laws regarding what kinds of data can be collected and shared, but the fact of the matter is, the Global Economy is based on the availability of data. Routine (IP) routing can circumvent privacy jurisdictions to a point where it is cost-prohibitive and time-consuming to enforce any sort of standards. Short story: it’s going to happen.

For marketing professionals, however, the key goal is to manipulate the purchasing habits of the masses to make a product, service or event a “viral” commodity. It is of no benefit for Google to risk the trust of a billion users every day either. Advertising pays some of the bills, of course, but it behooves them to pair targeted advertising with a receptive audience. Together, matching sellers to buyers as a digital exercise is more important than the physical marketplace. Generally, online purchase numbers have recently matched in-store purchases in many industries, but database and online marketing techniques drive much of the in-store purchase traffic. Depending on the research you subscribe to, 70-94% of shoppers conduct online research before purchasing. That means they are checking reviews, posts, random word searches, and comparisons. These are all areas that can be managed with proper use of personalization beyond direct communication.

In the big picture, [FIRSTNAME], marketing professionals and the companies they work for are interested in what is known as the “4 Ps” – product, price, placement and promotion. Here is how all this big data, covert collection and shady information sharing works for you.

When Apple decided to launch the iPod, it wasn’t that portable music was not available, but it was limited in its scope of capabilities. The iPhone revolutionized the mobile device world, including the cell phone. These products were not suggestions from consumers. They were the result of studying how (and the deficiencies in how) consumers engage in their environment, then revealing a new approach. The research revealed a purpose and Apple acted on it expeditiously.

Research will led you to what products and pricing are attractive to consumers. These nuggets can be found by researching big data, sales reports, and by following social media and communicating, officially or covertly, with early adopters. Placement and promotion, though, are where big data shines. In the digital world, these two can often be two sides of the same coin. Traditionally, personalization in mass marketing referred to adding your [FIRSTNAME] to the letter before mailing. Sometimes a personal tidbit would be added to the letter, such as, “[FIRSTNAME], thank you for the purchase of your Ford [Focus].” Nice trick, but hardly impressive. Personalization today brings advertisements to you through texts and emails, through pop-ups and banners. It affects what articles come up in searches. Personalization goes much deeper and broader than placement of the product and [FIRSTNAMEHERE] messages.

Mobile devices are so prevalent among the younger demographics that it must be considered at all times in a marketing professional’s plan. With mobile comes the reason consumers are using mobile – instant communication, entertainment and answers. Making your message mobile accessible and geo-centric is paramount to successful connections with mobile users. Tailoring your ad to meet the expectations and preferences of the consumer becomes important. A YouTube watcher will respond to video ads. If the organization knows part of their target demographic is watching YouTube, then they know what style of ad to produce – and where to show it. But without the extensive, habit-identifying data, marketing professionals become somewhat limited and have to make more assumptions. These are just some of the elements you must consider to begin to really personalize messages for your target.

Still, all of this is wasted time and effort if the data is used only to sell the product. The key benefit to personalization for marketing professionals is that it can build a relationship. And [FIRSTNAME], this is where the consumer gains the most power. There is no profit in selling products that consumers don’t want or need. The most successful companies do not build a product then look for a consumer – they find the needs of a consumer and meet them. Consumers, have always been able to vote with their money on a product’s ability to meet their needs. But now, their daily actions can actually influence whether a product ever reaches the marketplace. Better yet, it can influence the ones that do. There are some interesting examples of how consumer habits have helped organizations to introduce new products and services.

Take the Coca-Cola personalized drink dispenser. Coca-Cola is one of those organizations that benefits from international consistency. A Coke is a Coke (more or less) in any country in the world. But Coca-Cola discovered that not everyone drinks his or her Coke products the same way. So, in 2009, Coca-Cola unveiled the Freestyle machine, which offers over 100 beverages. This machine delivers the exactly correct formula as it dispenses, but consumers can mix in whatever other flavors they like. So, [FIRSTNAME], if you prefer your Coke spiffed up with a shot of lemony iced tea, then go ahead.

Jennifer Mann, Vice President and General Manager for Coca-Cola Freestyle, at Advertising Age’s latest data conference said that in this age of personalization isn’t just about offering what the everybody wants, but offering it in a way that appeals to them – she said that is the inspiration for the Freestyle machine, “It’s really the ability for us to deliver our secret formula in the shape of your secret formula.”

Marketing is a game played on an enormous playing field now. Literally every person in the world with access to the Internet can be in touch with an organization’s brand. When direct mail was the main source of personalized communication, organizations engaged in a sort of “spray-and-pray” style of advertising, sending out millions of flyers to target demographics hoping to entice them to visit a store or go online to their website. Because it was somewhat targeted, it’s response rates could be relatively high in comparison to non-targeted communications like full-run newspaper inserts. When personalization took a step forward, organizations were able to send documents that were more personalized for the individual recipients: Maybe a different photo would be used for specific consumers; different colors; different text blocks. The changes were quite noticeable and sometimes could be patronizing.

The new era of personalization involves much more subtle approaches. Marketing professionals are asking consumers what content engages them online. Sometimes it can be quite covert, like when a politician (through a person who appears to be unassociated with the party) posts articles that present a position on a topic like a new roadway, or support for new supplier. They track the number of times it is shared in Facebook, Twitter or whatever. They gauge the public response, good and bad, “likes” and “re-tweets” to identify content that resonates with constituents. It’s happening every day as marketers who know what they are doing work hard to better understand you.

[FIRSTNAME], there have been great advancements in using the Internet to recreate the face-to-face salesperson. Advanced techniques for tracking habits, likes and dislikes, favorite causes (and literally everything else) are all being recorded. Marketing professionals and organizations must marry this information with their own specific data and produce innovations to gain trust and loyalty. It works for the companies that employ the strategy and stay agile enough to respond to the results. Others who do not commit to the depth of planning behind true personalization will miss a robust opportunity. Successful marketers will use the information to find the wants and turn them into needs. The marketing industry has come a long way from just being on a [FIRSTNAME] basis.