The Power of Spotify’s Granular Personalization

Hello, OptiMIST People!

Back at it again with KaMIST! Your weekly dose of insights into the latest marketing trends. In this week’s KaMIST, we’ll dive deep into Granular Personalization in Marketing.

Marketers have long used personalization, and it has been shown to improve customer experience. According to research by Constellation, a lack of content relevancy in the average marketing campaign results in an 83% lower response rate. Consequently, relevance in marketing is pivotal to its success. With the support of the ever-evolving technology, companies can obtain information regarding users’ activities and interests conveniently. This enables companies in the current market to move from simple personalization to granular personalization.

Micro-segmentation, which is nothing more than narrowing down to smaller, niche pockets of micro audiences under the greater umbrella of the target audience, is the first step towards granular personalization. This will allow companies to know more about their users’ liking hence delivering a greater user experience.

Now, can you mention one company that has successfully implemented this strategy? Correct! It is none other than, the one and only, Spotify.

According to MIDiA Research Music Subscriber Market Share, which uses data from Q2 2021, Spotify was by far the most popular music streaming service, taking a total of 31% of the market. Apple Music comes in second, with a respectable 15%. Third place is a tie between Amazon Music and Tencent Music with 13%. YouTube Music comes in next with 8%, and then the smaller services fill out the remaining market share.

Granular personalization and personalized targeting are the reasons that lie behind Spotify’s success in becoming the most popular music streaming platform. Being customer-centric, giving their subscribers a personalized experience i.e. personalized playlists such as “Made For You,” “On Repeat,” “Daily Mix,” and the yearly popular content, Spotify Wrapped, makes Spotify stand out amongst the other music streaming platforms. Customizing content helps to build trust, and apart from having well-made content, it’s an essential factor to consider. This approach makes the subscribers feel valued, helps to show that they’re being heard, and, most importantly, understood.

While granular personalization in smaller companies’ marketing strategies may not be possible due to various constraints, they should start planning for it. Though this strategy is more effective to be implemented by companies in the media entertainment field, according to the present marketing landscape, granular personalization will become more prominent in the near future, and early adoption of this strategy will be the only way to stay ahead of the curve.

Do you think granular personalization is the key to success in marketing?

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The idea of delivering the most value for the consumer has evolved over the years. As we know, the best marketing strategy is cetera desunt for adaptive future-leader mindset that uncertainly evolved over decades. Companies began to use various promises in effort to persuade and attract customers. The fiercely increasing conditions of competition added the popularity of the concept of “brand” and “advertisement” by adopting the concept of neo-marketing and elaborate them with psychological terms. Albeit, all emotion influences consumers personal relationships, business choices, and buying decisions. The emotion itself has situational and reactive qualities, as well as satisfaction and expectations formed over lifetimes of experiences and interactions.

When a boy goes to an ice cream parlor or restaurant, he will feel befuddled. Choosing what he is going to get, that’s the thing that he despises. Would chocolate chip or strawberry ice cream please him better? Cheeseburger or fried chicken? He feared that what he selected will not give him as much pleasure as the other option would give. What he doesn’t choose could provide a higher sense of pleasure than the one he chose. One interesting finding utilized by neuromarketing is that people really don’t want to lose out. People are just as worried about what they might lose as to what they might gain.
In the meantime, one of the biggest challenges that marketers deal with is customers’ expectations in the pre-purchase phenomenon where the consumers haven’t fixed their buying decision yet. To tackle the challenge, many companies are competing to build relationships with their customers, with the expectations that they will be able to provide the best customer experience for specific individuals. Therefore, the company must be customer-centric to carry out a successful marketing strategy in order to be noticed by consumers and to forge a brand identity.

According to McKinsey (2019), by making a fundamental change of mindset of focusing on the customers, companies gained significant enhancement on several aspects. Along with operational and IT improvements, companies generate 20 to 30 percent uplift in customer satisfaction, a 10 to 20 percent improvement in employee satisfaction, and economic gains ranging from 20 to 50 percent of the cost base addressed in the various journeys.

To overcome these challenges, companies have to understand consumers’ behavior and expectations. Hence, companies should put a bigger concern towards consumers’ buying-cycle from awareness to its advocacy. By implementing the concept of Neuromarketing, stereotypes of the communication matters of the marketing basis will be integrated with taste of individual market itself. The more personalized the promotion, the higher the probability that the advertisement will work. It could be done by using big data to allow the company for this huge aggregation of all consumers personal information that they’ve ever revealed to build a precise representation of who they are, now, more than ever before. Data and insight are not delivered to consumers as a whole but individually by delivering the most value to the customers with a very specific scope based on how they think.

In order to win in today’s marketplace, companies must be customer-centered, to the point that ideally, each individual customer’s values are taken into an account to derive the value that they are truly seeking. In essence, by generating consumer reactions, and treating them not as reactionary receptacles of marketing strategies, but as each their own person with differing individual values. Therefore, reinforcing belief is a very important matter for marketers that influences consumers experience. They must deliver superior value to their target customers traditionally and digitally with knowledge of neuroscience marketing strategies combined. Neuromarketing will surely strengthen customer’s contentment of a product itself.