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Personalized Marketing: 3 Tips For Getting It Right

Erica Vialardi

Did you know that some of today’s most famous digital innovators share a very specific and unexpected aspect of their life stories? This was a bit of a revelation to me, and I feel it sheds some light on the relationship between consumer behavior, technology, and 21st-century marketing strategies.

From wooden learning towers to digital disruption

During a presentation about co-design that I attended some months ago, there was a genuine “wow” moment when the speaker unveiled that Larry Page, Jimmy Wales, and Jeff Bezos, to name just a few, share not only success, but also the same primary education at Montessori schools, where the freedom to express one’s own self without following pre-packaged programs and rules is an underlying principle.

The purpose of this blog is not to assess fields of education, but this peculiar common thread could convey something big: Their education may have helped those business leaders identify and, more importantly, put into effect, their very individual nature and talents, rather than fitting into a conventional behavioral mold. This could be one of the reasons they became great innovators with the ability to disrupt the status quo of global business from the ground up.

Millennials thumb their noses at traditional marketing segmentation

The above-mentioned tech innovators may just be the forerunners of a broader trend that has put the individual, with its natural propensities, acquired skills, and human contradictions, at the center of marketing and commerce decisions. Executing market segmentation has never been more difficult.

What criteria can one possibly use to segment a market where even the “nerd par excellence” Mark Zuckerberg is also a classic and Latin culture enthusiast, or where Apple hires Neapolitan philosophy graduates to develop its products? It seems that self-expression, cross-pollination between historically siloed skills, and some irreverence toward establishment act as common denominators not only of the tech elite, but also of the much-touted Generation Y—or millennials—as a whole. Just open your social media apps on your smartphone and you will witness live the increasing blurring of boundaries between professional and private identities.

Brands can unlock a huge market potential

To respond to those market changes, brands have made a dramatic shift in their marketing approaches. Long gone are the days of old-school, mass-advertising (according to a recent study by Elite Daily, only 1% of millennials say they are influenced in any way by advertising). Today, companies are running to win the complete race of personalized marketing.

Digitalization has provided consumers with tools—the smartphone above all—that empower them to access and research information freely, share it among new social aggregation schemes, and, when it comes to their behavior as consumers, actively design and rate their own shopping experiences. Today, engagement on social channels, crowdsourcing, and the design of individualized buying experiences are business imperatives that brands must embrace to stay in the game. It’s a game where a huge potential is at stake: millennials indeed act as trailblazers of much vaster groups of consumers who expect brands to address their growing personal requirements.

The dark side of individualization

Give consumers the exact experience they desire, where and when they want it. This ideal-sounding description hides some pitfalls which marketers should carefully monitor. The trend toward individualization in consumer behavior indeed reflects a more general tendency in (first-world) society – and not always a good one.

Provocative theories about individualization seem to multiply, such as the flip side of an excess of self-care, which may be a detriment to the sense of community, or no less, the lure of getting back to tribes. Caution is highly recommended, as the general sentiment about individualization may change quickly. Aside from these apocalyptic scenarios, if marketers keep in mind only one warning, it would be this: Use your customer data wisely.

As my colleague Johann Wrede puts it in spot-on words, beware of “the creepy factor of marketing” and ask yourselves: How do you use customers’ personal information without it feeling like a violation of their privacy? To deliver individualized customer experiences, you need to know what to do with your customer data to keep them engaged.

How to make the best personalized marketing decisions

Individualization may therefore be a double-edge sword, but by making the right decisions you can actually have your cake and eat it, too. In more decorous business words, you can offer contextual, individualized experiences to your customers while respecting their “individual propensity to individualization.”

Here are three fundamental principles behind any successful strategy to market to an “audience of one:”

  1. Consolidate customer profiles across the enterprise: Data is the fuel to develop your personalization strategy. Capture rich customer information, with a special focus on online behavior data, consolidate it across the enterprise, and you will be able to identify and treat your customers as individuals.
  1. Capture your customer intents in real time: To access and evaluate customer intents in real time, you need to leverage both explicit and implicit consumer behavior. Sophisticated micro-segmentation capabilities are a must, but the ongoing management of customer communities, or the identification of hidden trends through predictive analysis, will enable you to access and evaluate your customer’s intents better than your competitors.
  1. Respond to customer opportunities with speed and agility: Deliver in-the-moment, personalized, and relevant experiences across all touchpoints, channels, devices, and departments. For example capture your customer’s interest at the store, follow up with targeted ads, personalize their view of the website, and not least, send them dynamic product recommendations in a remarketing email.

Engaged customers are loyal customers

By all accounts, it looks like brand loyalty is growing again, especially among the highest-potential group of consumers today: millennials. Marketers who haven’t gotten their personalization strategies right yet should do so now, because the next frontier of marketing is already in sight, and it is called “empathy marketing”—the ability to create a personal connection with every individual consumer. Solutions and tools that enable companies to establish genuine conversations and engage with their customers on social channels do exist.

Empathize, but don’t be creepy. Reach this delicate balance and you’re on track to win the prize at the end of the individualization game: customer loyalty.

For more insight on personalized marketing, see Engage At Scale: Leveraging Customer Micro-Moments.

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Platform Economy: Putting Customer Value First

Pedro Pereira

Can platform economies replace traditional commerce? The platform economy is about taking risks, learning, and trying. Digital platforms are driving a change in mindset by democratizing the way people look at what they want. Leaders who allow questions like “what if?” and “what is?” to guide the creative process can help organizations leverage platforms to deliver meaningful customer value.

The platform economy is no longer emerging; it has arrived. Linear business models that are resource-heavy and producer-driven are shifting to multi-sided platform models that are demand-driven. Major companies like Google, Etsy, and Uber have already created online structures or are diversifying existing ones, like Amazon as a web platform entering the B2B provider space.

Some companies are trying to build a digital platform, but end up providing only basic services rather than utilizing the full potential of digitization to exceed customer expectations, enhance the customer experience, and deliver convenience and personalization. For example, a grocery store could build an app that enables customers to order goods and have them delivered. An extension of the app could operate as a digital twin, adding convenience by guiding users on what to buy.

But what, exactly, does a digital platform economy do?

Platforms push change in mindset

Platforms democratize the way people look at what they want. Consumers are looking for choices, comparisons, and help with decision-making. The idea that consumers make decisions at the store is no longer the norm—now they are looking to have an experience in the store. Stores need to focus on not only enabling experiences, but also helping people make decisions.

Digital platforms are driving people to change the way they consume. This means companies need to radically change how they offer products and services, how they capture information to deliver meaningful customer service, how they create value in this economy, and finally, how they compete for profits. 

Traditional commerce versus digital platforms

In traditional commerce, companies must compete at many different levels. Digital platforms disrupt this process because they consume the value and deliver the service. Why, then, do we need brick-and-mortar organizations regulating the environment?

Before we discuss bringing the digital platform to traditional retailers, we need to evaluate the way people consume products now. Today’s consumers buy products and services to pursue a lifestyle. That means we need to focus on adding value first, and then move on to the transaction.

That is why traditional e-commerce is at a loss in the game. Where traditional e-commerce ecosystems push, the new platforms pull. As data lies at the core of platform economies—versus products or transactions at the core of traditional commerce—the platform economy provides an edge by enabling companies to offer meaningful and relevant content, products, and services.

In the end, it is all about:

  • Convergence
  • Understanding what is meaningful to the customer
  • A brands’ ability to communicate with and understand its customers and make recommendations based what is meaningful to them

Dematerializing traditional ecosystems

My role at SAP has involved looking at the concept of the platform, bringing it to customers, and enabling companies to become the platform. Let’s look at the two sides of the market: the creators of the service are on one side, and consumers are on the other. To facilitate more trade through the platform so that it becomes an active marketplace, we need to break the concept of suppliers and start looking at them as value creators. Once we aggregate functions on a platform and dematerialize a traditional ecosystem, we see that many of the activities, and much of the exchange of information that does not happen in a traditional model, is centralized in the platform.

Who makes the decision to move to the platform economy?

The decision to transition to the platform economy comes either from a strong leader who is trying to grow a company through innovative disruption or, ideally, a CEO who embraces digital transformation and has a structured agenda in their strategy to make this happen.

Most core companies are typically hinged on two key components: time and performance. After a point, they need a new S curve, which requires investment. Ideally, this should be done in the growth phase rather than when during a downturn. And the answer lies in digital platform ecosystems. Today’s smart leaders will pursue a strategy that experiments with and invests heavily in disruptive platform economies.

What are the key learnings of building/leveraging a platform?

Shifting your mindset to a platform business model means moving away from the concept of “I,” “my,” and “mine.” It is imperative to give power to the ecosystem by enabling its components to shine.

The platform economy is about taking risks, experimenting, trying, and learning. We need leaders who believe in, and are willing to invest in, these ecosystems and ask “What if?” and “What is?”

  • What if I started solving problems that are more meaningful to customers instead of pushing products?
  • What if I relied on assets that are not mine? Can I let go control with enough governance to facilitate the exchange of value between people I don’t control?
  • What if I stopped making money and focused on adding value to my customers? What would happen to by business? Where would I go?
  • What if I made these changes and came to a level of balance?
  • What is in it for me?
  • What is the story you want to tell? Tell the story and honor the MVP.
  • What is the upside potential? What do you have as a result of this platform?
  • What is the downside and the risk?

The rise of platforms is being driven by three transformative technologies: cloud, social, and mobile. Platforms can be an important competitive advantage if allowed to evolve and managed effectively on both the supply and demand side.

Time to get thinking.

For more insight on how platform is transforming business strategy, see Disrupt Or Be Disrupted: Why Platform, Not Pipeline, Will Save Your Business.

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Pedro Pereira

About Pedro Pereira

Pedro S. Pereira is Head of Digital Innovation for Middle East and North Africa at SAP.

3 Millennial Expectations Every E-Commerce Business Needs To Address

Tracy Vides

Ah, the millennials – the generation brought up with the Internet and the rest of the digital revolution! While there may be a good deal of stigma attached to this crowd, there’s no stopping the fact they are flooding the job market and are predicted to spend $1.4 trillion in the U.S. retail market by 2020.

Due the fascinating point in history this age group grew up in, they are an extremely tricky bunch to market and sell to. They have essentially caused a lot of brands to throw out their entire playbook and start from scratch.

Let’s a take a quick look at a couple of the top brands today: Amazon, the leading retailer, does not own any physical stores. Uber, the leader in transportation, does not own any cars. Both of have one thing in common: the point-of-sale happens electronically.

This phenomenon is a big indicator that e-commerce is taking over. Modern shoppers (particularly millennials) have much different values and expectations than shoppers did 20 to 30 years ago. No surprise, therefore, that for most online companies, appealing to a millennial audience has become a top priority. Let’s discuss three of the most prominent expectations these shoppers have for e-commerce businesses.

1. Persuasive social media presence

Hundreds of years from now, when historians discuss the biggest breakthroughs happening early in the second millennium, the rise of social media will undoubtedly be one of the most debated topics.

What took off in the early 2000s now has a collective user count around 2.5 billion, many of them millennials. In fact, a recent survey found that 88% of millennials get their news via Facebook.

With this many eyes on social media, having a strong brand presence on popular outlets is no longer an option. The harsh truth is that millennials are not responsive to traditional ads or played-out sales tactics. While social advertising is proving to be very effective, one of the main goals of your brand’s social media presence must be to give your messaging a playful and humanized tone that connects with the younger audience on a more in-depth level.

Red Bull is well known for its superior social media presence. It uses its accounts to become so much more than just an energy drink. If you follow Red Bull, you’ll see how good it is at promoting original, branded material such as films, competitions, live shows, and of course, user-generated content.

In addition to favoring e-commerce brands with a human touch, millennials value consistency and responsiveness across channels. Be sure you are keeping up with all your accounts in all networks to remain in touch with your audience.

2. Personalized user experience

Even though the development of technology and the evolution of the Internet have done a lot to bring us together as a species, e-commerce is getting more individualized. Millennials are not fazed by traditional marketing and sales pitches. They want interactions to be tailored to their needs.

Unfortunately, there is no formula written in stone about how to deliver the perfect personalized experience.

However, there are certain things you can do to embrace this concept. For example, Amazon’s homepage looks different to each and every customer. Using workflows and user information, it recommends relevant items to customers based around their online behavior.

The overarching goal for retailers is to understand customers’ needs throughout the entire sales funnel. The most effective way to do this by implementing marketing automation within your e-commerce platform. For example, Shopify lets you profile customers, map their journey, market to them across digital channels, and provide a consistent shopping experience across multiple devices, online and in-store.

Personalization has become a staple in many e-commerce operations. In fact, a study by Gartner predicts by 2020, smart personalization engines used to recognize customer intent will enable businesses to increase their profits by up to 15%.

Basically, younger audiences want e-commerce companies to show them exactly what they want to see.

3. Transparency

Sales techniques have seen a huge shift as millennials gain spending power. Smartphones have literally given people all the information in the world in the palms of their hands. With this in mind, e-commerce brands need to come to terms with the fact that each buying decision will be well-researched.

“Millennials have changed the old retail model of price obfuscation, especially in online commerce,” says Jason Goldberg, VP of strategy at Razorfish. “They have grown up with transparency and information available to them at their fingertips, so brands have to design their business around transparency.”

Everlane, a luxury clothing store, is a prime example of how to use this concept in a business model. It openly promotes how all of its products are made, from A to Z, directly on its e-commerce website.

It doesn’t hide any manufacturing costs or warehouse details from the public. A lot of companies are known for relying on cheap labor, and the stigma around that helps get Everlane’s transparent approach into millennials’ good books.

Additionally, it maintains a strong social media presence that constantly reinforces its values. For example, it famously gives its audience behind-the-scenes glances at its factories in action via Snapchat. Using raw footage like this puts customers in a better state of mind about their purchases.

Transparency and authenticity are essential for gaining traction with millennials. It’s not just about what you sell anymore. It’s about how you promote it.

Parting words

Millennials are a fascinating group. Apart from the selfies and constant social media updates, they have a lot to offer in terms of digital consumerism. The truth of the matter is the online shopping landscape is incredibly crowded. Regardless of what products or services you provide, chances are there hundreds of other businesses working towards the same goals. Since millennials have been brought up in the middle of this reality, they have no problem looking around until they find an experience that really speaks to them. It’s up to you to differentiate yourself as a brand that meets them where they hang out.

For more on marketing to today’s consumers, see 5 Steps to Your Customer’s Heart with Emotionally Aware Computing.

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About Tracy Vides

Tracy is a content marketer and social media consultant who works with small businesses and startups to increase their visibility. Although new to the digital marketing scene, Tracy has started off well by building a good reputation for herself, with posts featured on Steamfeed, Business 2 Community and elsewhere. Hit her up @TracyVides on Twitter.

The Future of Cybersecurity: Trust as Competitive Advantage

Justin Somaini and Dan Wellers

 

The cost of data breaches will reach US$2.1 trillion globally by 2019—nearly four times the cost in 2015.

Cyberattacks could cost up to $90 trillion in net global economic benefits by 2030 if cybersecurity doesn’t keep pace with growing threat levels.

Cyber insurance premiums could increase tenfold to $20 billion annually by 2025.

Cyberattacks are one of the top 10 global risks of highest concern for the next decade.


Companies are collaborating with a wider network of partners, embracing distributed systems, and meeting new demands for 24/7 operations.

But the bad guys are sharing intelligence, harnessing emerging technologies, and working round the clock as well—and companies are giving them plenty of weaknesses to exploit.

  • 33% of companies today are prepared to prevent a worst-case attack.
  • 25% treat cyber risk as a significant corporate risk.
  • 80% fail to assess their customers and suppliers for cyber risk.

The ROI of Zero Trust

Perimeter security will not be enough. As interconnectivity increases so will the adoption of zero-trust networks, which place controls around data assets and increases visibility into how they are used across the digital ecosystem.


A Layered Approach

Companies that embrace trust as a competitive advantage will build robust security on three core tenets:

  • Prevention: Evolving defensive strategies from security policies and educational approaches to access controls
  • Detection: Deploying effective systems for the timely detection and notification of intrusions
  • Reaction: Implementing incident response plans similar to those for other disaster recovery scenarios

They’ll build security into their digital ecosystems at three levels:

  1. Secure products. Security in all applications to protect data and transactions
  2. Secure operations. Hardened systems, patch management, security monitoring, end-to-end incident handling, and a comprehensive cloud-operations security framework
  3. Secure companies. A security-aware workforce, end-to-end physical security, and a thorough business continuity framework

Against Digital Armageddon

Experts warn that the worst-case scenario is a state of perpetual cybercrime and cyber warfare, vulnerable critical infrastructure, and trillions of dollars in losses. A collaborative approach will be critical to combatting this persistent global threat with implications not just for corporate and personal data but also strategy, supply chains, products, and physical operations.


Download the executive brief The Future of Cybersecurity: Trust as Competitive Advantage.


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How Digital Transformation Is Rewriting Business Models

Ginger Shimp

Everybody knows someone who has a stack of 3½-inch floppies in a desk drawer “just in case we may need them someday.” While that might be amusing, the truth is that relatively few people are confident that they’re making satisfactory progress on their digital journey. The boundaries between the digital and physical worlds continue to blur — with profound implications for the way we do business. Virtually every industry and every enterprise feels the effects of this ongoing digital transformation, whether from its own initiative or due to pressure from competitors.

What is digital transformation? It’s the wholesale reimagining and reinvention of how businesses operate, enabled by today’s advanced technology. Businesses have always changed with the times, but the confluence of technologies such as mobile, cloud, social, and Big Data analytics has accelerated the pace at which today’s businesses are evolving — and the degree to which they transform the way they innovate, operate, and serve customers.

The process of digital transformation began decades ago. Think back to how word processing fundamentally changed the way we write, or how email transformed the way we communicate. However, the scale of transformation currently underway is drastically more significant, with dramatically higher stakes. For some businesses, digital transformation is a disruptive force that leaves them playing catch-up. For others, it opens to door to unparalleled opportunities.

Upending traditional business models

To understand how the businesses that embrace digital transformation can ultimately benefit, it helps to look at the changes in business models currently in process.

Some of the more prominent examples include:

  • A focus on outcome-based models — Open the door to business value to customers as determined by the outcome or impact on the customer’s business.
  • Expansion into new industries and markets — Extend the business’ reach virtually anywhere — beyond strictly defined customer demographics, physical locations, and traditional market segments.
  • Pervasive digitization of products and services — Accelerate the way products and services are conceived, designed, and delivered with no barriers between customers and the businesses that serve them.
  • Ecosystem competition — Create a more compelling value proposition in new markets through connections with other companies to enhance the value available to the customer.
  • Access a shared economy — Realize more value from underutilized sources by extending access to other business entities and customers — with the ability to access the resources of others.
  • Realize value from digital platforms — Monetize the inherent, previously untapped value of customer relationships to improve customer experiences, collaborate more effectively with partners, and drive ongoing innovation in products and services,

In other words, the time-tested assumptions about how to identify customers, develop and market products and services, and manage organizations may no longer apply. Every aspect of business operations — from forecasting demand to sourcing materials to recruiting and training staff to balancing the books — is subject to this wave of reinvention.

The question is not if, but when

These new models aren’t predictions of what could happen. They’re already realities for innovative, fast-moving companies across the globe. In this environment, playing the role of late adopter can put a business at a serious disadvantage. Ready or not, digital transformation is coming — and it’s coming fast.

Is your company ready for this sea of change in business models? At SAP, we’ve helped thousands of organizations embrace digital transformation — and turn the threat of disruption into new opportunities for innovation and growth. We’d relish the opportunity to do the same for you. Our Digital Readiness Assessment can help you see where you are in the journey and map out the next steps you’ll need to take.

Up next I’ll discuss the impact of digital transformation on processes and work. Until then, you can read more on how digital transformation is impacting your industry.

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About Ginger Shimp

With more than 20 years’ experience in marketing, Ginger Shimp has been with SAP since 2004. She has won numerous awards and honors at SAP, including being designated “Top Talent” for two consecutive years. Not only is she a Professional Certified Marketer with the American Marketing Association, but she's also earned her Connoisseur's Certificate in California Reds from the Chicago Wine School. She holds a bachelor's degree in journalism from the University of San Francisco, and an MBA in marketing and managerial economics from the Kellogg Graduate School of Management at Northwestern University. Personally, Ginger is the proud mother of a precocious son and happy wife of one of YouTube's 10 EDU Gurus, Ed Shimp.