How You Can Use Personalization As A Marketing Tool

by Chris Low, founder of MyTeamPlan

Should you launch your business in an industry that has little to no competition? Or should your business take on an industry that already has a mature customer base? This is a question that first time entrepreneurs frequently ask themselves. At the onset it might seem like a good idea to venture in an industry with little competition – this way, you make the rules and get to have the first mover advantage. But then, educating your customers about why they need your product in the first place is an extremely tough challenge to take on.

At the same time, launching your business in an industry that is saturated with competitors can be difficult as well. Customer inertia is a real worry for newly launched businesses and unless you offer something that is dramatically better than what exists in the market already, it is not going to be easy to get customers to pay you for your product or service.

Businesses get around this challenge in a number of ways – providing your product for free or at a heavy discount is one of the time-tested strategies. By getting your customers used to your product, you help move customer inertia in your favor. However, such strategies do not help when your competition too resorts to the same tactics to pull customers away from you.

Relying on your price point to acquire customers is a short sighted strategy and does not work unless you already have a significantly higher marketing budget than your competition. What works in the long term is a strategy that can help you sell your product at a healthy margin without having to compete with your competitors for market share.

This is why personalization is fantastic as a marketing tool. Most businesses invest in branding to increase customer loyalty and repeat purchases. To these businesses, letting customers buy personalized products is a waste of their marketing budget. Offering a personalized offering in such a market is bound to stand out among competition. Also, it lets entrepreneurs to carve a unique niche in a market that is saturated with competing products.

Personalization can work in any consumer-facing industry. This is especially true in the holiday gifting category where buyers like gifting personalized items. Even outside the gifting industry, businesses have been able to benefit off the personalization strategy. Websites like Zazzle and CafePress let customers design their own t-shirts and also make money off it by selling their designs to others. In the B2B segment, a number of software products targeted at agencies offer ‘white labeled’ solutions that these agencies can customize while reselling to their own end customers.

Even if your industry cannot afford personalization as a positioning strategy, you could still benefit from it from a marketing perspective. One study found that personalizing your email messages alone can bring about a near 750% higher click through rate. The same is true with personalizing other areas of marketing like PPC, cold call and even fliers.

Personalization is a low cost strategy that can yield high response from your customers. Regardless of whether you want to use this as a business model or as a marketing strategy, personalization is a great tool.

 

Chris Low is the founder of MyTeamPlan, a desktop-based project management software. He also serves as the project manager at Shepherd Software.

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