Interviews, insight & analysis on digital media & marketing

The power of personalisation during an economic downturn

By Enrique de la Cámara, Business Design Lead at Designit

The idea of personalisation is far from new. Some version of personalised goods and experiences has been around for years. But the scale with which personalisation has evolved from a targeted ad here and there, to what it means today is changing. And, in many ways without realising, consumers are demanding it more now than ever before.
As the cost-of-living crisis unfolds, we’re seeing a shift in consumer behaviour across all markets and industries. People are becoming more hesitant to spend, and therefore more purposeful when they do, meaning a highly targeted and sophisticated consumer experience, allowing consumers to select products they connect with that are also suited to their financial situation is playing a bigger role than ever before.
Human behaviour is complex, and consumer psychology is built on layers of cultural and relational factors. And during times of social uncertainty, such as that of a global pandemic or a financial crisis, consumer behaviour fluctuates.
What this means for businesses is that having a deep understanding of the relationship customers have with their products is more important than ever. The value they give to one product over another will give insight into what matters to them. So when money is tight, this value can very well be what determines what a consumer will spend on, what they can spend on, and what they are willing to give up.

Understanding consumer pain points and passion points
In order to maximise both their place in a consumer’s purchasing power and their share in the market, businesses have to go about crafting a personalisation strategy with what matters to the consumer at the centre.
This is why the most successful marketing strategies have a dynamic and robust consumer personalisation focus. In fact, the best strategies are born from a superior understanding of the
daily pain points and passion points of their audiences.
This understanding allows brands to produce the content, solutions, and experiences that either reduce those pain points or amplify the passion points. Leveraging both technology and psychology, brands can produce the most targeted and sophisticated consumer experience possible.


Technology enriched by psychology
Most personalisation-driven transformations fail because they are too centred around the technological backstage and the advertising front stage. In other words, they solely tackle the question: What technologies do I need to personalise my ads? Yet, since most brands today pretty much have access to the same emerging technology, they must go the extra mile to differentiate themselves from their competitors by enriching this technology with consumer psychology.
What will really set brands apart is the added value delivered at every touchpoint in the user lifecycle, all the way from pre-purchase through to post-purchase. By researching the mindset of consumers, their hopes and fears, and most importantly, what deals will connect to their financial concerns, brands can understand the psychology of their customers at each touchpoint. This helps deliver an intelligent experience which is attuned to the consumers’ wants and needs.
This is especially important during an economic downturn. When analysing the user life cycle can be the difference between capturing an adequate share of the market or going bust. Here, understanding what is left in the basket, what is purchased and what is returned, can help businesses understand what matters to each customer. What do they like, what do they fear, and what they want but might need more incentive to buy.
This research can be done through shop-along and generative sessions with real users, which gather insight into the broader psychological context of these users. That will then inform the technology how to best operate in order to deliver that superior, tailored experience. Allowing brands to then better select, set up and operate the technological operating systems required.


Advertising touchpoints across more make-or-break moments
​​Likewise, on the front end, brands must enrich advertising touchpoints (which are currently too focused on purchase) by expanding into inspirational (pre-purchase) and servicing (postpurchase) make-or-break moments.
This means pivoting from ‘transactional-personalisation’ (focusing on the purchase itself) to ‘relational personalisation’, which helps to maximise the value exchange between the brand and their audience across a more exhaustive range of touchpoints. This can be achieved by mining the customer journey for opportunities to amplify passion points or eliminate pain points through content, services, and other brand experiences.
Greater personalisation is always the answer, because it allows for greater relevance and thus, greater value for the consumer. However, for this to hold true, personalisation capabilities have to go beyond just content tailoring, and into providing actual value.
For instance, consumer packaged goods (CPG) businesses looking to build this relationship might try creating content ads that talk to life hacks around ways to save money or food hacks on scratch cooking. Meaning that they actually have to attend to the points of interest of the consumers that they’re hoping to retain or acquire.

The art of value tailoring
At Designit, we always say that research is a verb, not a subject. This framework pushes us to constantly update our consumer research with the latest changes in the lives of the people we serve. Which is the only way to ensure the advertising remains relevant and effective.
The success or failure of each new personalisation tactic will depend on the degree to which it is tailored to the consumer’s pain and passion points.
This is precisely why the ability to leverage technology and targeted consumer psychology to personalise each touchpoint of the customer lifestyle is key. Because ultimately, even though as a brand you are technically targeting a huge customer base, in practice, you are really just impacting one person and their unique hopes and fears at a time.
That being said, these processes of consumer research and personalisation depend on a cache of consumer data. Data that must be safeguarded at every step of the user lifecycle. Therefore,
brands must always ensure a high level of security over this sensitive information, so that their
personalisation strategies don’t compromise consumer privacy in the process. Breaches to
secure data threaten the trust and confidence consumers give to the brands they engage with.
In a time when customer loyalty is already at risk because of financial pressures, there is no room for such doubts.
With that in mind, the brands that can maximise both their technology and rich consumer research, position themselves strongly during an economic downturn. The power of personalisation allows for a more robust offering and the delivery of greater value to each and every consumer.

Opinion

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