How AI personalization can level up your marketing strategy

AI personalization uses artificial intelligence (AI) and machine learning (ML) algorithms to gather and analyze customer data and behavior in real-time. By doing so, it can provide customers with highly relevant (and omnichannel) experiences that speak directly to the individual.

These AI tools and technologies analyze browser and purchase history, demographics, location, and similar details so brands can tailor their content creation and user journeys to match each web visitor’s unique needs.

AI-native personalization platforms seamlessly integrate with content management systems (CMSes) so companies can run individual, data-driven campaigns — at scale — without the need for a developer.

These campaigns can provide customized content like calls to action (CTAs), banners, and landing pages across websites and apps.

Everyone wants to feel special. AI personalization can make your customers feel like the individuals they are. It can reduce shopping cart abandons, enhance customer engagement, and make your marketing spend more efficient.

Discover a few other benefits of personalization:

Increased conversion rates

When you deliver the right message at the right time to the right audience, you significantly boost your chances of converting said audience. Ninetailed by Contentful allows you to segment your audiences and serve up personalized marketing messages or offers across different digital touchpoints.

Higher customer satisfaction and retention

Personalized experiences address visitors' specific needs, helping boost customer satisfaction. AI-driven personalizations also create more meaningful interactions, fostering stronger emotional connections between brands and customers. These connections are essential for nurturing long-term loyalty, so personalizations also facilitate customer retention.

More efficient marketing

With Ninetailed by Contentful, you can integrate audiences and experiments directly into your CMS and provide customers with unique user experiences without relying on developers. Businesses can test, adapt, and refine campaigns and content quickly, leading to better performance and ROI. AI processes data in real-time, and you can use this to your advantage when scaling your personalization efforts.

Before you can jump into executing your AI personalization strategy, you need to make sure you’re set up for success. These steps will help you prepare:

AI-native segmentation

AI separates your website visitors' real-time behavioral and demographic data into defined groups. You can serve these groups with specific experiments and personalized messages that will better resonate with each segment.

A/B testing and optimization

One of the types of experiments you can run is an A/B test. AI-based personalization platforms allow you to A/B test different variations of content, landing pages, or user interface (UI) components on your site to determine which performs better. With AI, you can simplify and automate the process of testing multiple variations at once, so you can figure out what resonates with audiences faster.

You can use AI personalization to maximize your marketing efforts through the following methods.

AI content personalization

AI analyzes users' individual preferences and past interactions to adjust content and information accordingly. This could mean two users on your site could see different AI-powered chatbot messages, CTAs, or even entire page layouts that are uniquely relevant to them.

Creating these types of bespoke experiences for customers makes them feel catered to and leads to more meaningful engagement and conversions. Through machine learning algorithms, AI can continuously optimize its ability to deliver these experiences.

AI-powered retargeting campaigns

AI identifies visitors who have shown interest in your products, services, or web content, but didn't convert, and it serves them personalized information or content to bring them back to your site. Your team can leverage variables such as visitors’ behavioral data to help increase return visits and boost conversions on your site by tailoring your customers’ experiences.

Dynamic pricing

You can use AI personalization to automatically adjust prices for products and services in real time based on customer behavior, historical data, and factors like consumer demand, time of purchase, and weather. For example, an airline may increase ticket prices during the winter holidays.

By tracking browsing and purchase patterns, AI offers individual users pricing that matches their perceived willingness to pay. It also monitors similar offerings from competitors and adjusts customer costs to remain competitive.

By getting granular with personalization tactics, AI can help you increase your audience segments so you can provide a variety of highly relevant experiences to customers.

Here are three use cases from notable case studies of AI personalization in action:

Personio: Personalized account-based marketing (ABM)

HR software company Personio tailored their content to target companies based on size, catering to small and large-scale enterprises. Thanks to personalization, Personio increased conversion rates for both segments:

• 46% conversion increase and 63% email consent increase in small businesses
• 45% conversion increase with 16% more demo requests in enterprises

Personalization helped the company reach these audiences and deliver messages and CTAs that resonated on a deeper level.

With AI-native personalization, Personio can easily create more than two segments, streamlining their personalization efforts for segments such as small startups, small businesses, freelancers, enterprises, and beyond.

Ruggable: Customer segmentation and targeting for paid traffic

Washable rug brand Ruggable realized their customer base consisted of two primary segments: dog people and cat people. They capitalized on this insight by creating two distinct paid marketing campaigns targeting each group. They also created a unified customer experience by carrying the segmentation into their website. This cohesive campaign resulted in a:

• 25% increase in conversion rate
• 700% increase in click-through rate (CTR)

By starting with strategic segmentation, Ruggable created customer journeys that led seamlessly from awareness to purchase.

Pets Deli: Personalized discounts based on customer segments

Pets Deli, a European direct-to-consumer (D2C) market leader in the pet food industry, analyzed customers' purchasing behavior and offered unique product prices and promotions based on their perceived needs. To do this, they segmented customers based on their loyalty level:

1. First-time shoppers
2. Return visitors
3. Repeat customers

This enhanced shopping experience and personalized discounts resulted in a:

• 51% increase in conversion rates
• 10% decrease in bounce rates

Integrating AI-native personalization into their CMS took less than 24 hours and enabled Pets Deli to offer more powerful, hyper-personalized offers that corresponded with their segmented customers’ loyalty levels on a more granular level.

Getting started in AI personalization may pose challenges if you're not using the right platform. Take a look at some of these potential roadblocks for new users:

• Resistance to change: Many businesses — especially established ones — may be hesitant to upgrade their current systems or invest in more effective AI technology. They may still operate on legacy systems that can't handle AI-driven personalization. A survey from KPMG also shows that a lack of understanding, budget cuts, and not enough cross-functional coordination also undermine digital transformation within organizations — despite 56% of executives believing it has exceeded expectations when implemented.

• Complicated setup: Depending on the platform you choose, integrating AI personalization tools can be time- and resource-intensive. It may take considerable time to configure and optimize for accurate customer segmentation and customized content rules. The process is more complex if your company doesn't have an efficient data infrastructure. According to Twilio, half of companies say that gathering accurate personalization data is a struggle and 31% say poor quality of data makes AI personalization challenging.

• Privacy and security concerns: Consumers grow increasingly concerned with data privacy, especially as personalization becomes ubiquitous. Businesses have to collect a lot of customers' data points to provide the most relevant experiences. And, according to a Forbes study on data privacy, 64% of Americans believe companies are responsible for protecting their personal information. If AI personalization feels too invasive or "creepy" (like overly accurate targeted ads), it impacts consumer trust. A McKinsey report shows that 87% of consumers won’t do business with a brand they don’t trust with their data.

How to overcome these challenges

These challenges don't have to deter your marketing goals. Here's how to face and conquer potential AI personalization roadblocks.

• Choose the right platform: This is the first and most important step. A platform like Ninetailed by Contentful is powerful enough to streamline your integration process but intuitive enough to get you up and running quickly by providing personalization solutions at scale. Its no-code personalization and “plug-and-play” capabilities let you build, manage, and measure your efforts without extensive technical know-how.

• Create a clear data practice: To maintain legal compliance and customer trust, you must be transparent when collecting and handling customer datasets. You need to communicate to customers the specific data you’re collecting from them, why you’re doing it, and how it’s used. Collect only what you need, and explain how it will be encrypted, stored securely, and who will have access to it. And, most importantly, provide clear opt-outs for customers who do not wish to share their data.

• Invest in training: Make sure your teams understand how to leverage AI-powered personalization tools effectively. This includes A/B testing, audience segmentation and analysis, and creating individual customer journeys.

AI-native platforms can help you overcome your personalization hurdles with no-code or low-code integrations. Its composable approach and seamless workflow allows you to align customer data with content directly within your CMS and deliver engaging user experiences. With Ninetailed by Contentful, Pets Deli got their personalization efforts up and running within a day, and you can too.

In modern marketing, AI personalization is quickly turning from a luxury into a necessity. But advancements in martech — like turnkey solutions — make it easier than ever to adopt AI personalization. Whether competing against small businesses or juggernauts like Amazon, AI personalization empowers you to attract, retain, and delight customers.

Contentful makes AI personalization easy to implement by allowing you to seamlessly integrate personalization and content management. And, sure, it won't have your oat milk latte ready and waiting, but it can help businesses like yours seamlessly integrate advanced personalization strategies into your marketing mix.

Contact us and discover how Contentful can support your AI-powered personalization goals and help you deliver better customer experiences, regardless of audience size.

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