Are You Ready to Implement Segment-of-One Marketing?

Technology now exists to enable Segment of One marketing (aka. hyper-personalization, aka. n=1), but not all brands are in a position to take advantage of those capabilities. Here’s a look at the key factors that might hold you back.

Just Getting Started
If you’re in launch phase for a new brand or concept, and don’t yet have at least 500k customers (or 100k customers, at very least), or more than $30 million in annual revenue, or if you don’t yet have multiple digital touchpoints such as email, SMS, online or app, or multiple physical locations (or both), then you probably don’t yet have the scale where n=1 efforts would deliver enough incremental benefit to be worth the effort. At this early stage, traditional segment-led efforts or predictive models, or even simple rules-based methods might be sufficient.

On a related note, if you don’t have at least two full years of transaction history (or at very least, one full year), then models can’t effectively be trained to reflect seasonality and trend, and customer lifetime metrics will be incomplete, so models will not yet perform as they would later, when trained on multiple years of data. So instead of rushing straight to the most advanced technology out of the gate, your efforts at this point should likely be focused on building your brand, promoting discovery and customer acquisition, and on building a repeatable marketing and operations playbook that consistently wins in the marketplace.

Data Readiness
In addition to having a sufficiently-large base of operations, you’ll also want to have a robust process for capturing transaction data at the individual-customer level. And if a significant portion of transactions occur inside physical stores, you’ll probably need a loyalty program to enable this. You’ll also want to have digital product masters with unique product identifiers – ones that don’t get reused when products get discontinued. (This helps to ensure that recommendation engines work as intended.) And if there are physical store locations, there should also be up-to-date store masters as well.

Martech
A key technology that enables Segment of One is SOLUS.ai which was a first mover, and is currently a market leader in the AI-First category of customer engagement software. Think of SOLUS as the brain, and your customer engagement software as the hands.

What this means is that, before you invest in AI-driven capabilities such as Segment of One, you would want to have already engaged technology partners that handle the delivery of your customer communications via email, SMS, app and so forth.

This is a key point.

It follows that technologies like SOLUS do not replace your existing Martech stack. Instead, SOLUS integrates with it, making that technology smarter and more effective than it was before. SOLUS acts as a system of intelligence that sits between your existing data sources and your existing engagement channels, generating individual customer-level nudges that combine recommendations, propensity scores and stacked models, rather than broad segments or static rules.

Under the hood, SOLUS runs more than 10 recommendation systems in parallel, with a meta-learner that makes the final recommendations selected from those competing models. That’s a lot smarter than legacy systems can be!

Also, there’s a flexible journey builder that enables multi-channel campaign orchestration, supporting always-on lifecycle campaigns that dynamically optimize themselves at the n=1 level using contextual multi-armed bandits (CMABs).

Aside from this, SOLUS is able to achieve remarkably fast speed-to-value, enabled in part by an array of out-of-the-box propensity models, including 120 always-on campaigns and fully-automated control groups, plus same-day turnaround on new models.

So, what kind of impact can you expect from this type of n=1 relevance (assuming that you’re ready)?

Brands typically see a 3-7% topline increase from incremental sales, when transitioning to recommender-led campaigns. This delivers 4-5x higher ROI, compared to segment-led campaigns. And conversion rates improve by 20-30% with n=1 campaigns. Also, KPIs like repeat, retention, and win-back improve by 5-10% year-over-year.

If you’d like to see a demo or know more about SOLUS, feel free to get in touch. AI Master Group is a B2B channel partner for SOLUS. Full implementation takes one week.