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What is Personalized Marketing?

By Christy Bieber
Updated May 16, 2024
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Personalized marketing refers to targeting a product or service to an individual customer. It can be achieved only by collecting data and information about a particular customer, or small group of customers, and then creating products and/or advertisements of special interest to that individual. It is distinct from mass marketing, which creates a product designed to appeal to as wide an audience as possible, and from niche marketing in which a product is created designed to appeal to a group or segment of the population.

When a product is created, it has a target market. The target market refers to all the people who may be potential customers interested in purchasing that product. Some companies strive to create the largest target market possible, while others establish smaller segments of the market they wish to aim their product at.

Personalized marketing is the most extreme form of target marketing. Instead of creating a product designed to appeal to many people or to the whole population, the target market is one specific customer. Some forms of personalized marketing will appear to a slightly wider audience than just one person, but the market segment is still very small.

In order to be successful at personalized marketing, the company must be able to collect information on the individual being marketed to. As such, this form of marketing is especially popular on the Internet, since the Internet is a more interactive platform for communication between company and customer. For example, a web page may institute cookies to track the types of products a customer routinely buys when he visits. It then creates advertisements specifically for that individual based on his buying history. One example of this is the recommendations Amazon.com makes to customers who are signed into their account; Amazon tracks the purchasing history of customers and then populates that customer's home page with similar products.

Marketing to an individual customer can be a lucrative method of generating increased sales, as long as the collection of data and the means of personalization is easy. For Amazon, for example, it is not difficult to generate a different home page for each customer because the computer programming software has automated the task. It would be much more difficult and cost prohibitive, on the other hand, for a grocery chain to send a personalized brochure to each of its shoppers, offering each customer deals and discounts based on the customer's shopping history.

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Discussion Comments

By icecream17 — On Mar 22, 2011

@Cafe41 - I just wanted to say that the one thing that I do not like is when a company is using cookies to track my purchases. It feels like an invasion of privacy.

It is one thing if I volunteer to be on a mailing list and choose to offer information to a company, but it is something else when they covertly obtain my browsing information in order to target specific products to me. That form of personalized url marketing really turns me off.

By cafe41 — On Mar 21, 2011

@Latte31 - I know what you mean. My kids get personalized post cards from a toy store every year around their birthday and they will get a coupon that offers them $3 off a $3 purchase or more. It is not a lot of money, but they love getting these personalized post cards along with the little incentive.

It is really a lot of fun to open. I think that more companies should consider doing this form of personalized database marketing. People that receive these personalized incentives will probably spend a lot more money in the store, so it makes a lot of business sense to do this.

By latte31 — On Mar 21, 2011

@Subway11 - I agree that is a fun feature. I also wanted to say that many retail stores also use personalized database marketing in order to inform a certain segment of their clientele of upcoming marketing promotions.

I am on a database list of a high end department store and they are always sending me invitations to exclusive fashion shows and other types of promotions.

Sometimes I will get promotional information via email about sales that they are having regarding special designers or they will inform me when the new collection of a designer is in.

I have to say that my favorite aspect of personalized direct marketing involves when I receive a free gift for my birthday. There is a causal handbag shop that sends me a $20 gift certificate that I can use towards any purchase on my birthday.

I really appreciate these personalized marketing gifts because the gift is targeted to my birthday and it is not a mass mailing. It really does make me feel special and makes me really think highly of the company.

By subway11 — On Mar 19, 2011

I have to say that I really like when I look for books online and that company suggests additional titles that might pertain to my interests.

Sometimes buying books can be overwhelming and by offering other similar suggestions it really narrows down the selection process. I also love when the book store sends me an email on a new book release from an author that I have showed interest in the past.

This personalized email marketing really makes me want to buy additional books. I really like that they do this. I also like when you search for a book on a bookstore’s website and then an additional list of alternative books pops up regarding similar books that people have bought in addition to the book that I am currently looking at.

I will sometimes buy these additional books if I want more information on the subject matter.

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