It’s no secret consumers love sales, discounts, and anything else that gives the feeling they're saving money. Just take a look at the upcoming holiday season: Consumers will wake up at the crack of dawn on Black Friday to capitalize on sales, promotions, and discounts. (Fifty-five percent of U.S. shoppers made a purchase last year on Black Friday, spending more than $1 billion, an all-time high [Fundivo]). Companies know this, so they invest lots of resources in promoting and circulating their special offers.
Businesses would love to ensure a good return on this investment. With personalization, they can improve the odds of good ROI. Through personalization, companies can promote offers at the optimal time for each customer, based on factors like real-world demographics and online behavior. Offer personalization is the ideal way to elevate conversion rate for users who redeem discounts and take advantage of limited-time deals.
Let’s explore a few different ways to create personalized offers.
Companies tend to provide shoppers with a wide range of deals and discounts, as certain services and products are going to appeal more to different groups of people. It's usually hard to predict which product offers or service discounts will strike a chord with individual consumer groups. There are times, however, when it’s easier to infer a connection, and on these occasions businesses should personalize offers to increase the odds people will buy. Offer personalization can affect the season in which offers are promoted as well as granular details about the deals themselves.
Say there’s a U.S. financial firm that provides specialty insurance and checking accounts to students. Students are therefore the firm’s target segment—information it can use to make its deals and services that much more enticing. For example, the firm may increase spend on deal promotion in the fall, when most students first enroll in college. It may also play on the fact most college-aged people are new to personal fiscal responsibility: The firm could spruce up offers on student checking accounts with a promise to help with financial planning or student loan strategy.
Location, Location, Location
Location is one of the main factors to consider when segmenting consumers. Where people live impacts their culture, tastes, fandom, and much more—and, not uncommonly, people are proud of how their geography affects their preferences. This is good news for marketers, who can use location to personalize offers in an emotionally resonant way for consumers.
Location personalization can take many different forms, but weather is one of the key subfactors to consider (which is also closely tied to season). It’s no coincidence AccuWeather claims one of its critical enterprise capabilities is helping companies “minimize risk” and “maximize opportunity” by “optimizing discount periods and dates based on forecasts and historical data” (AccuWeather).
Consider how vastly different certain U.S. regions are when it comes to what counts as normal weather: On the west coast, for example, there’s a fire season, and in the southeast, there’s a hurricane season. Tactical insurance companies can cater their discounts to the predictable weather patterns of these areas, as well as to the specific needs of the people who live there. A California firm could give special offers on hazardous brush insurance, and a Florida firm might give discounts on flood insurance. These personalized offers will help consumers feel more personally understood, which encourages them to make a purchase.
Accounting for location is important in many key sectors, including energy, retail, and travel. For instance, an outdoors apparel store could see a huge increase in engagement by serving personalized discounts on winter jackets to consumers in the U.S. Northeast just before winter hits. Oil and gas usage often decreases in the summer, so an energy supplier might give "Buy Service A, Get Service B Half-Off" deals to offset the revenue drop. Many Americans also travel late in the year to escape the cold, so a travel brand might give special discounts to people living in cold-winter cities, like Chicago or Boston, who book trips to warm-winter cities, like Miami or San Jose.
All shoppers (like all humans!) have desires and goals specific to them. By collecting data and building essential models for every consumer, companies can gain exponential insight into each user’s purchasing tendencies. This opens the door for personalized offers based on specific behavioral characteristics, or tendencies. Consequently, the more information a business has on its consumer base, the better.
Let’s say one user has a habitual expenditure: Every spring, she buys Item A. If a company notices this but is trying to promote a new product, Item B, it may target this user once spring arrives and offer great discounts on Item A with the purchase of Item B. Even though the user would probably have bought Item A anyway, the company has increased its chances of her also buying Item B. Now, imagine if this could be done for every consumer in the business’ database: a personalized deal based on spending habits unique to each person. Offer redemptions would likely increase (perhaps by quite a bit).
In short: Everyone likes discounts and deals, but companies can boost conversions by delivering offers that are special-tailored to the segment, location, and tendencies of consumers. In the future personalization will become more complex as technology advances, as well as more important to more industries. So, start personalizing now!