March 10, 2024

Understanding Personalized Marketing to Boost Your ROI


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  • Personalized marketing is the customization of marketing content and strategy based on personal information.
  • Personalized marketing isn’t about casting a net. It’s about targeting individuals with messages that appeal specifically to them.
  • Responding to customers’ needs and wants with personalized tangible rewards can help you build brand loyalty faster than ever.

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This is part one of a two-part series on boosting ROI with personalized marketing. For part two, check out How Personalized Marketing Can Boost Your ROI.

Racking your brain for a better way to improve your return on investment (ROI)? Before you go back to the drawing board, consider developing strong personalized marketing as a solution.

Personalized marketing is a strategy that takes individual customer data into account and uses it to create a personalized marketing plan for each customer. This can result in a better customer journey and improved ROI. Let’s explore a basic understanding of personalized marketing, as well as its benefits and challenges.

What is Personalized Marketing?

In a nutshell, personalized marketing is the customization of marketing content and strategy based on personal information. Also called one-to-one marketing, this process leverages user data to deliver personalized brand messages targeted to a specific prospect.

This could include anything from adjusting the layout of your website to tailoring your email marketing campaign specifically for each individual subscriber. But we’re not just talking about inserting a customer’s name into a digital marketing template. It’s about reaching the right person at the right time with a unique message.

The goal is to create a more personalized experience for customers, which in turn can lead to increased engagement and ROI. In the age of Spotify, Netflix, and Amazon, potential customers don’t just crave personalized marketing—they expect it. It’s now the industry standard.

Of course, personalized marketing takes more time and effort. You may be asking yourself if it’s worth it or if personalized marketing is really that important. Research says an emphatic yes!

Consider these fast facts:

  • 91% of consumers are more likely to shop with brands that provide personalized experiences.
  • Personalized marketing can result in a 20% increase in sales.
  • On the flip side, 71% of consumers feel frustrated when a shopping experience is impersonal.

What other benefits are tied to personalized marketing? We’ll cover the top three.

What Are the Benefits of Personalized Marketing?

When leveraged effectively, personalized marketing is a win-win for both prospective customers and companies. Here’s why:

Customer Experience

If you personalize your content, strategy, and gestures based on what you know about your customers, they’re more likely to have a positive experience with your brand. This leads to repeat customers and improved brand loyalty.

Try these easy tips:

  • Cultivate relationships rather than transactions.
  • Consider the whole customer journey.
  • Collect customer experience satisfaction data.

If you’re doing it right, your potential customers will feel seen and heard. They’re more likely to trust you and turn to your product or service as a solution to their pain point, causing your conversion rate to soar.

Brand Loyalty

Building brand loyalty is any marketing team’s ultimate goal. When customers feel that a brand is speaking directly to them, they’re more likely to remain loyal. According to Aberdeen Group, personalized marketing can increase customer retention rates by as much as 26%.

Furthermore, personalized messages can create ambassadors for your brand. These are customers who will actively promote your brand through word-of-mouth marketing and positive online reviews.

Help your personalization and brand loyalty align by running an active customer loyalty program and collecting relevant data to segment your audience and their preferences. Customers often fall into one of these categories:

  • In-store point miners
  • Redemption-centric customers
  • Experience seekers
  • “Channel agnostic” point seekers
  • Consummate demanders
  • Casual subscribers

Responding to customers’ needs and wants with personalized tangible rewards can help you build brand loyalty faster than ever. Try a fun and memorable promotional campaign with Sendoso to really make an impression!

Increase ROI

Personalized marketing can also help to improve your ROI.

When you launch a traditional marketing campaign, you’re hoping to cast a wide net and snag as many potential customers as possible. But the reality is that there will always be an unresponsive segment of the audience because they simply have no use for the product.

In contrast, personalized marketing isn’t about casting a net. It’s about targeting individuals with messages that appeal specifically to them.

A recent survey found that 80% of consumers are more likely to make a purchase from a brand that provides personalized experiences. When you target customers with personalized messages, they’re more likely to buy from you. And, when purchases are made, the likelihood that they’ll return increases as well.

What Are the Challenges of Personalized Marketing?

Personalized marketing can be difficult to implement due to a large amount of data that needs to be collected and analyzed. Additionally, it can be challenging to create custom content for each individual segment.

Identify these common pitfalls in advance so you can avoid them and make sure your personalized marketing campaign gets off to a great start.

Finding the Right Technology Solution

The first step to personalized marketing is finding the right technology solution. There are many different software options available, so it’s important to do your research and choose a tool that will fit your specific needs.

What are the ideal features to look for in personalization technology?

  • Customer data capture
  • Customer segmentation
  • Real-time optimization
  • Rules-based and/or predictive personalization
  • Testing algorithms
  • Multiple channels

Whether you choose to use an agency or a self-serve software solution, you’ll want to invest in technology that can advance you along the personalization maturity curve and allow you to tackle complex personalization strategies.

Data Collection

Data is the foundation of personalized marketing. In order to create personalized experiences, you first need to gather both explicit and implicit data points on your customers. There are a few different ways to do this, and each has its own nuances and challenges.

  • Website tracking: Using cookies or pixel tags, you can track customer interactions on your website and use that data to segment them into different groups.
  • Offline data gathering: This can include surveys, focus groups, or intercept interviews.
  • Third-party data providers: These are companies that collect and sell customer data. This is a great option if you don’t have the time or resources to gather your own data.

Once you’ve gathered customer data, it’s just as important to clean and organize it. Data means very little without proper analysis, and this step is best done by a marketing expert, not AI. Refining personalization to improve relevancy—the right timely message for the right person—is the ultimate goal.

When you partner with a sending platform like Sendoso, you gain access to an Analytics Dashboard that allows you to track and analyze valuable data like this in real time.

Implementing Smart Segmentation

One of the most effective ways to personalize your marketing is through smart segmentation. Smart segmentation is when you target small, specific groups of people with personalized content.

For example, if you’re selling running shoes, you might segment your audience by runners who live in different parts of the country. You can then personalize your content and ads to appeal to each group.

Unfortunately, most companies use a small number of basic marketer-defined segments to drive their digital marketing activities. While this is easier for businesses, it’s not best for customers. Categories like location or income are too broad to successfully personalize marketing messages.

The solution: Strike a balance between AI-powered smart segmentation and the genius of your own marketing experts to generate personalized, meaningful campaigns for your core audience segments.

Check out part two of this two-part series, How Personalized Marketing Can Boost Your ROI.

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