We've all received direct mail marketing offers and emails from businesses that believe they're on a first-name basis with us. Most of the time, the greeting might as well say, "Dear INSERT YOUR NAME HERE," because it's clear from the context that the company just purchased data from a third party and has no idea who we are or what we need.

Personalization—including use of a prospect's name in a marketing pitch—is a well-established tactic used by millions of marketers... but does it work?

Research suggests not. A study at Temple University's Fox School of Business revealed that adding a prospect's name to a greeting was more likely to be perceived as a turn-off than to create a warm lead. More than 95% of study participants reacted negatively to being greeted by name in an email.

Moving Beyond Personalization

For marketing teams that rely on personalization to create a connection with customers, the study's news wasn't all bad. Emails that left out the customer name but included content built around the prospect's past purchasing decisions had a 98% positive rating.

That statistic reveals a golden opportunity for marketers. The key isn't to use the customer's name but rather to incorporate his or her needs into the message. A combination of demographic data and industry information can be effective for B2B marketers connecting with buyers.

Doing that requires segmenting target companies by industry and implementing a verticalization strategy in which potential customers' needs, purchasing motivations, and preferences are incorporated into marketing messages.

In that scenario, personalization needn't be abandoned. It can be integrated into verticalized messages. By including vertical industry information into the message, marketers can overcome the perception that personalization is superficial and create a highly effective, tailored message.

Knowing What Your Customers Want You to Know

As the Temple University study revealed, knowing customer names isn't important, but businesses must understand their customers' needs.

In a B2B context, it's absolutely critical for the selling organization to demonstrate that it understands what is important to the potential customer. Without that understanding, superficial personalization is a waste of time. Instead, the selling company must create a subject line and provide content that speaks directly to the buyer's needs.

Knowing customers' needs requires a commitment to research. Surveys and "voice of the customer" tools are incredibly valuable for identifying needs and expressing them in the customers' own words. The sales team can be a valuable ally as well since sales reps typically have an in-depth understanding of customer business requirements and pain points.

Reaching for Verticalization

To achieve verticalization, companies need to segment the audience not just by demographic data but also by industry data, so they can create consistently relevant and useful messages.

Segmentation must take place at the database level, which will enable companies to generate value statements that resonate within the target segment.

Using the right language is important; a comparison of the jargon used by different industries quickly reveals that a one-size-fits-all approach will not resonate across verticals and may have the same counterproductive effect as ubiquitous, context-free use of customer names. Instead, companies must find a way to deliver contextually specific messages that demonstrate that the sender has understood the reader's needs.

Designing a messaging strategy that goes beyond personalization to incorporate industry vertical elements involves a voyage of discovery for the marketing team. Marketers must get to know their target verticals intimately, using research, analyzing industry benchmarks, and accessing the collective wisdom of internal teams, such as customer service and sales, to find out what makes each customer segment tick.

Moreover, marketers must understand the precise nature of the value their company delivers to each segment and map out a messaging strategy based on that. They must create messages that will resonate with each specific group, including industry jargon specific to the segment, as they articulate pain points and propose solutions.

To successfully achieve verticalization, companies must harness technology, accessing an advanced marketing automation platform that not only automates messaging but generates data from interactions with prospective customers. The right technology solution makes it easier to obtain proof points and feedback. It also makes nurturing leads more efficient by automating the process of staying in touch at every point along the sales funnel.

* * *

The most important step companies can take toward building stronger customer connections is to recognize that effective communication is about more than knowing customer names. It's about knowing who customers are.

By moving past personalization and toward a verticalized approach, marketers can define the essential value their company delivers and communicate it effectively to the verticals they are targeting, connecting with prospects to transform them into customers.

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image of Giles House

Giles House is senior vice-president at CallidusCloud, a provider of cloud-based sales, marketing, and learning solutions.

LinkedIn: Giles House

Twitter: @housegiles