Are you doing personalization wrong?

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Less is more

Personalization is becoming an increasingly important element in the pursuit of a differentiated customer experience. It has also come a long way, in recent years, according to Evergage CMO Andy Zimmerman who says that personalization has evolved from “delivering one-to-many experiences, aimed at broad groups of people – to being truly effective at the individual, one-to-one level.”

This is backed by recent research by Evergage that found that 98% of marketers agree that personalization positively impacts customer relationships with the principal areas of benefit coming from increased visitor engagement, improved customer experience and increased conversion rates.

However, in the same study, the surveyed marketers also reported a range of challenges including insufficient and low quality data.

But, is more data of a better quality the answer, particularly when you consider that while many customers want a personalized experience a large number of them also have privacy and data protection concerns?

Jebbit, a declared data platform provider, and Zappos, the celebrated online retailer, offer different perspectives on the route to personalization success.

Jonathan Lacoste and Ben Cockerell of Jebbit believe that companies actually have more data than they know what to do with and they need to change tack if they want to create a compelling, stand out and personalized customer experience. To do that, they believe, they should focus on asking for and collecting only three or four data points that will take them beyond the standard transactional or behavioral data, that is normally collected, and that will allow them to move into more psycho-graphic data i.e “The why behind the buy.”

Boden in the UK is following Jebbit’s declared data approach and, on average, they’re seeing a 33-34% increase in their cart size and around a 52-53% higher conversion rate.

This approach is aligned with Zappos’ approach to personalization. Alex Genov, Head of Customer Research at Zappos, believes that the challenge with personalization is that different customers feel very differently about sharing their data and that personalization means different things to different people. As a result, it is often very difficult to ascertain the real reason or context behind a purchase and that is where many firms’ personalization efforts go wrong.

That’s why they are taking a more dialogue led approach rather than a data and technology ‘best guess’ led approach.

What that means, in practice, is that they are designing their interfaces to help deliver the sort of dialogue they need so that it drives their understanding of their customers as people and not simply as a collection of data points. Then, and only then, will they use technology and algorithms to deliver the experience their customer wants.

While Genov admits that Zappos are early in their own personalization journey, he believes that brands should first concentrate on understanding their customers as people and then work with data and technology to deliver the experience they want. He goes on to say that “If you see people as just a user or just a buyer then you don’t see the whole person and, as a result, you don’t see the whole opportunity”.

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This post was originally published on Forbes here.

Thanks to Pixabay for the image.

3 COMMENTS

  1. Whether data-led or dialogue-led, isn’t the real opportunity represented by personalization that of customer-perceived value (which, by the way, is not mentioned at all in this post)? Micro-segmentation and personalization algorithms have been around for years. If the customer can’t recognize targeted and individualized value in the content and/or messaging, and this isn’t explored in qualitative and quantitative experience/response research, then the effectiveness of approaches must really be challenged. Value is the magic word here.

  2. Hi Adrian: I agree that when it comes to personalization, customers have privacy and data protection concerns, along with a host of other issues like how their data is used, who uses it, and for how long. And there’s increasing concern over ultimate question, who owns the data? It will be interesting to see how these issues play out. The battle pits customer will against the corporations that monetize big data. I know where I’m placing my bet.

    As interesting as the answer might be, it is unclear whether understanding the “why behind the buy” will yield sufficiently attractive financial returns to companies that endeavor to find out. One matter is scale. How can companies uncover such insight when they have hundreds of thousands, millions, or billions of customers or users? The other is incremental benefit. Data science can deliver many insights about people and their consumption proclivities. Over time, would a deeper, albeit more time consuming, qualitative expose be worth the investment?

  3. Something worries me about this topic. Maybe we need another word…like customization. My Lucchese boots are customized. I selected the boot material, size, color, toe style and heel style. But, no one at Lucchese knows me personally. I might reserve the word personalization for experiences that connect me with a service provider in a personal way, not just a tailored way. Amazon and Zappos customize my experiences by recommending products preferred by “customers like me.” But, they don’t really know me like my dry cleaner, banker or electrician. As soon as the discussion migrates to big data, we leave the realm of personalization. Personalization requires little data, like the fact that I want my dress shirts folded, or the teller that remembers my cat’s name, or my electrician who knows were I leave the house key so she can start work before I get home.

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