Everyone's talking about personalization. We all want to achieve it, but things get a little messy when we try to define what it actually is and set expectations around the impact it will have on a company. It's easy to think that investing in personalization technology is the answer to a better user experience -- that the right tools can be installed and the rest happens automatically. The truth is, true personalization requires strategic legwork from marketing teams to be successful. Being on the engineering side (and working with marketing teams to help them achieve their personalization goals) has revealed the gaps in our approach to, and understanding of, personalization. Here's what marketers need to know before they start trying to fill in those gaps:
A high-level definition
Before we dive in, here's how I would define personalization: Personalization is how your customers (and their customers) convert from a "visit" to a sale. The technology-backed process comes with a hefty promise: dramatically cut down on decision fatigue for consumers, giving them what they want, when and how they want it.
The 4 levels of personalization
Just because something is called personalization, doesn't mean it creates the best user experience possible. There are several levels to this practice of giving customers what they want, when they want it -- ranging from painfully simple (and not exactly accurate) to incredibly complex.
- Customization: This is personalization at its most basic. It's as simple as inserting a user's name, location or other small detail into existing copy, images or content. Most campaigns like this are "customized" via email, not personalized. For example, a shopper might receive an email saying "Hi [Name], check out these great deals to update your summer wardrobe." The content getting used already exists, and what you see is nothing more than content being merged.
- Crowd Personalization: This is the lowest form of personalization that any business should be seriously considering. It's happening when we see phrases like "people who bought this also bought…" or "related content". It's effectively using the wisdom of the crowd to power suggestions in a majority-rules fashion. At a crowd level, personalization is still pretty basic. It doesn't make use of more advanced data, and instead makes blanket assumptions by analyzing the relationships between people and content and creating a rule. That's not to say crowd personalization doesn't react, learn, or evolve, but it is considerably less-smart than segmented personalization.
- Segmented Personalization: The idea of a segment -- a group of people who share similar interests -- is well-known, especially in the email marketing world. In terms of product recommendations, this uses algorithms to make statements such as "people like you also bought," which is a step deeper than crowd personalization. You might share a few details with other people in the crowd, like all buying the same product before, or even buying something from the same category. It's more specific than crowd personalization because its suggestions are based on more than an immediate action. At this level, personalization gets a little more relevant because it has some data to act on, allowing a marketer to, say, ensure people who spend between $50 and $100 per order are shown a certain banner.
- Contextualization: Finally, we have segmented, real-time personalization that combines content and data to build a far more holistic customer experience. That experience is designed to understand the flow of data and lead each customer down the desired path-to-purchase based on previous buying decisions and interactions with a brand. It serves up all the information they need to move through their digital journey, and leaves out the information they can't be bothered with (or the things they've already purchased). For example, you may receive a retargeting email that leads you back into your shopping cart to buy lift tickets after booking a stay at a ski resort. Combining data, strategy, and action is the ultimate goal.
How we get to contextualization
The problem with achieving true personalization starts early on in the process. A company knows they need to personalize the digital experience, but they can't answer the most important question out there: "What is my end goal?" Is it increasing season ticket sales? Is it getting a certain number of shoppers to buy a newly released product in its first 90 days on the market? If we don't know, how can we expect customers to do what we want them to do? The technology to help answer these questions is out there, but it isn't being leveraged in a way that realizes its true potential.
When it comes to marrying content and data in a personalized and context-aware way, many companies hit a roadblock. They may have data available to them, but don't know how to make that data work in their favor. Assigning a purpose to all of that customer data transforms personalization from a guessing game into a mission-driven project. Only once you've determined your goals can personalization technology truly work in your favor.
Once goals are set, businesses can start learning from the flow of customer data and become strategic about making connections that drive customer satisfaction, loyalty, and the bottom line.
A final word: getting marketing and tech on the same page
Personalization is both creative and technical, and it's easy for marketing-focused and technology-focused players to butt heads in the process of making it work. The focus of technical teams is often to implement something for the marketing department and move on to the next project. Meanwhile, the marketing department tends to be focused on taking action quickly and repeatedly -- testing and re-testing campaigns and actively figuring out what works, then tinkering with the technology appropriately. But it takes time to collect all the data needed to build the right, truly personalized digital experience. Personalization is about working together and investing in the long term -- not a "set it and forget it" approach. There needs to be continuous strategizing and planning happening from both sides.
Misconceptions about personalization, and the goals and strategies to implement it, can lead companies down a fruitless path. But combining the insights of technical leaders with the visionary strategic guidance of marketers can help us find out what works to bring meaningful results. Personalization is not solely about improving the customer experience, but driving specific actions that improve your bottom line business results. It's about envisioning what success looks like for your company, then engineering a way to make it a reality.