Personalisation in 2024: Data Privacy, The Value Exchange and AI

If personalisation isn’t part of your marketing strategy already, it should be. Twilio’s 2023 State of Personalisation report found over half (56%) of consumers to state they would become repeat buyers after a personalised experience, a 7% increase year-over-year. According to the latest data from Marigold on Personalisation in 2024, personalised messages have been shown to generate higher levels of engagement, with 78% of consumers citing they like to engage with a personalised offer tailored to their interests. Favoured brands are getting personalisation right, with 85% of consumers stating that their favourite brands treat them like an individual. However, 51% state they are frustrated by receiving irrelevant content or offers from brands, showing there’s still work to be done.

Where To Start with Personalisation and Targeting Gen Z

You can start simple. Birthday offers for example are a favourite amongst most consumers, with 84% stating they enjoy these types of personalised offers. Similarly, 80% enjoy product recommendations based on past purchases. Segmentation of the customer base into distinct groups based on shared characteristics, behaviour and preferences is fundamental for personalisation; hinged on delivering the right content to the right audience at the right time. The creation of buyer personas within each segment aids in further refinement, allowing for more relevant and meaningful experiences. Personalised marketing messages can include curated newsletters, loyalty status updates, abandoned cart reminders, the possibilities really are endless. These strategies hold greater weight when targeting Gen Z, as having grown up in the digital age, they expect unparalleled digital experiences. Constantly flooded with ads, this generation is far more likely to use means, such as ad blockers, to avoid advertising. Whatsmore, Gen Z are most likely to react negatively following an impersonal experience, with 49% stating they’re less likely to make a purchase and 27% stating they would either stop shopping with said brand or share the negative experience with those in their circle.

Creating Customer Data Profiles

The greater fleshed out the customer data profiles, the greater the messaging possibilities. First-party data allows you to understand how consumers are interacting with your brand, collected from the brand’s own channels, whereas zero-party data, provided by customers themselves, allows you to understand customer interests, preferences and motivations. However, the battle begins and ends with data privacy. Due to increasing data privacy concerns, more brands are relying on first-party data to deliver tailored experiences, with 78% believing this to be the most valuable source for personalisation.

Only 51% of consumers trust brands to keep their personal data secure and use it responsibly, a figure which is likely to increase. From 2022 to 2023 almost a quarter of consumers reported to feeling less comfortable with their data being used for personalisation, making transparency in operations all the more crucial. Increasing data privacy regulations and the deprecation of Apple’s IDFA, has left 27% of consumers feeling that personalisation efforts have become less targeted. The better understanding you can provide of how customer data is being used to better tailor efforts towards them, the more comfortable they’ll feel upon sharing their data.

The Value Exchange

Nothing in life is free, and the same applies for data. There’s a value exchange for personalisation. Once a customer sees the benefit of engaging with a brand, they’re far more likely to willingly share their data, and remain loyal to that brand. The value exchange should be enticing but not pushy.

The latest data shows that customers are willing to share their personal information with brands in exchange for these values offerings –

• 91% will exchange data for discounts or coupons
• 89% for loyalty points or rewards
• 83% for early or exclusive access to offers
• 81% for a chance to win something
• 60% to unlock content

Hyper-Personalisation and Integrating AI

Despite the growing sentiment that personalisation has become less targeted, the expectation is that customer needs should not simply be met but anticipated, heralding the age of hyper-personalisation. This is done by creating targeted experiences through data, analytics and most importantly AI. Whereas segmentation creates customer groups, hyper-personalisation appeals to the customer as an individual, in a segment-of-one approach. The degree of hyper-personalisation can vary, ranging from connecting online and offline sales channels to developing tailored products or pricing. It’s more of a holistic approach that can be applied throughout the customer journey. This approach can be particularly effective when applied to advertising, making use of the same platform and underlying data to present varying offers based on the individual viewing the ad. A report from Deloitte, cites Cadbury’s as an example. The brand made use of data such as age, location and likes, provided via the customer’s Facebook page to create a hyper-personalised video advert; resulting in an increased CTR of 65% and conversion rate of 33.6%.

AI is shaping elevated customer experiences, with 92% of businesses using AI driven personalisation to fuel business growth. AI enables brands to sort through large amounts of data in real time and identify the most effective types of interactions to have with customers. Take some of the industry giants. Netflix, for example, uses an algorithm to predict content users want to see next, combining behavioural attributes with predictive learning. In a similar manner, Amazon uses an item-to-item collaborative filtering AI to suggest products and create targeted emails based on available data. However, only 41% of consumers feel comfortable with AI being used to personalise their experiences, which further highlights the importance of transparent communication with your audience when implementing personalisation strategies.