Why Digital Media Companies Have No Choice But to Personalize
As marketers, we want to know who our customers are. What are their interests and how do they impact their behaviors? That’s the only way that, online, we can come close to replicating the personal service that our grandparents took for granted when they walked into a store. We know that a superior customer experience will encourage customers to become more loyal to us, fueling sustainable long-term growth.
When consumers share their personal information, they know it’s being stored somewhere. But what do customers expect marketers to do with it?
That’s just one of the questions we asked in a study of 1,000 customers about brand loyalty. We asked them what they think is important, what entices them to buy, and what puts them off. And we asked customers what they expect in return for their data.
The answer is very different for retailers than it is for media companies.
Why Retailers Rely on Discounts
Most — but not all – retail customers expect that, in exchange for their personal information, they’ll be offered a discount. In fact, 62% said they were happy to trade data for discounts, coupons, or special offers. Forty percent simply want to be acknowledged. They wanted the retailer to offer them a tip of the hat for participating in a loyalty program or being a frequent customer.
With so many customers expecting discounts or special offers, it’s important to remember that not all discounts are the same. Over the long term, different types of discounts are going to have hugely varying effects on your brand. A straight 20% off might be appropriate if you’re trying to clear out inventory, or during certain times of the year (maybe back-to-school or the holiday season).
But otherwise, a flat 20% off is hardly strategic. Just think about the other options. If you offer that same 20% discount, but only on an order size of at least $200, for example, you can use the discount to try to bump up the value of a customer’s next purchase. A gift-with-purchase may tell you if a free sample is a good way to prime the pump for a full-sized purchase. And some people would be happier with free shipping.
Just as marketers personalize email content, they should also test personalized discounts. It’s well worth the effort to find the most-powerful discount that is also the best for the long-term health of your brand.
The Dilemma for Media Companies
Personalization may be even more important for media companies than for retailers. At the end of the day, retailers are asking for someone’s money. Media companies, however, are asking for someone’s time and attention – often, a far more valuable commodity.
Even as some of the largest media companies try to transition away from a predominantly ad-based model to one that that focuses on subscriptions, visitors to a media site are less likely to want to get a discount in exchange for their loyalty than are retail shoppers. While 62% of shoppers wanted retailers to give them a discount in exchange for their personal information and their repeated business, only 48% of media loyalists said the same.
Meanwhile, 37% of media loyalists only want to see content specifically chosen for them. Being acknowledged as a loyal reader was important to 31% of media loyalists (again, that compares to 40% of retail shoppers.) And they were slightly more willing to be addressed by name – 27% of media loyalists chose this option.
This makes the job of digital publishers even harder than it is for other marketers. Discounts motivate many retail shoppers. Even though this might be bad for a brand’s long-term financial health, in the short term it may be a necessary evil. But for publishers, the story is different. Discounts are much less important. The only option is to truly know your reader.