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The Most Effective Personalization is Invisible

David Dodd | Nov 22, 2016 143 views 4 Comments

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Delivering outstanding experiences to existing and potential customers has become the prime strategic objective for most B2B and B2C marketers. In the 2016 Digital Trends Quarterly Intelligence Briefing by Econsultancy (in association with Adobe), surveyed marketers identified optimizing the customer experience as their most exciting opportunity.

Most marketers now recognize that the ability to personalize marketing messages and other marketing content is an essential requirement for providing great customer experiences. The authors of a 2016 report by the Economist Intelligence Unit (EIU) used a quotation from Kristin Limkau, the CMO of JPMorgan Chase, to highlight the importance that marketers place on personalization:  “Achieving personalisation at scale is the biggest and most important challenge for us to get right.”

But despite the recent focus on personalized marketing, it’s clear that marketers have more work to do to make it truly effective. Research has shown that many customers aren’t particularly impressed by the personalization efforts they encounter. For example:

  • In a survey by Adobe, 71% of consumers said they like receiving personalized offers, but 20% reported that offers are not done well, and another 20% said that personalization efforts are too intrusive.
  • In other research by EIU, 70% of survey respondents said that many of the personalized messages they receive are annoying because the attempts at personalization are superficial, and 63% said marketing messages that use their name are so common that they have grown numb to the practice. In addition, only 22% of the respondents said that personalized offers are more likely to meet their needs than mass market offers.

Clearly, most of us want companies to provide personalized messages and content, but many of us are becoming more concerned about our privacy, and we feel that some personalization efforts are just plain creepy. When CEB recently asked a panel of nearly 400 consumers how “online ads that use details about what I have done” make them feel, almost three-quarters (73%) of the responses were negative, and almost half (49%) used synonyms for “creepy.”

To avoid the “creepy” element and make personalized messages and content more engaging and effective, marketers must keep one critical principle in mind:  The most effective personalization is usually invisible. By invisible, I mean that the personalization is undetectable by the customer or prospect.

Since the early days of personalized marketing, the most common way to personalize a marketing message has been to include specific facts about the recipient in the message. Some examples would be the recipient’s name, her job title, company affiliation, or information about a recent purchase. I call this practice explicit or overt personalization.

It’s as if we marketers believe that the effectiveness of personalization comes from telling the customer or prospect what we know about him or her. There may have been some truth to this belief several years ago when personalization was still novel, but today, most types of overt personalization are ineffective at best, and can actually be seen as “creepy” by customers or prospects.

What our customers and prospects really want are offers, messages, and content that are relevant to their interests and needs – in other words, something that is useful or valuable. So, we marketers need to stop telling our customers and prospects what we know about them and start using that knowledge to craft marketing content that provides them real value and utility.

Image courtesy of Lisa Lowan via Flickr CC.

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4 Responses to The Most Effective Personalization is Invisible

  1. Thomas Wieberneit November 23, 2016 at 5:49 pm (226 comments) #

    Hi David, interesting thoughts – so interesting that I currently do not know whether I would agree or not. Maybe jus the choice of words: In a marketing context ‘invisible’ and ‘undetectable’ sound like ‘manipulation’ for me. Do you remember the case where some dad didn’t trust his eyes when he saw advertisements for baby gear addressed to his young daughter? That was highly personalized, likely even very valuable – because she was pregnant. So it would fit the bill of ‘invisible’. Dad just didn’t know of the pregnancy yet.

    Still this kind of invisible data usage is extremely creepy.

    I think that the main problem is that companies are still looking too much into ‘value’ from their own angle, not from a customer’s one. This meanwhile created a strong impression of marketing being manipulative, which is one that is hard to be eradicated.

    highly philosophical topic, I guess

    2 ct from Down Under
    Thomas
    @twieberneit

  2. David Dodd November 26, 2016 at 11:10 am (19 comments) #

    Thanks for your comment, Thomas! I can understand why it could be easy to associate “invisible” or “undetectable” personalization with manipulation, but I would argue that this approach to personalization is not more inherently manipulative that most other marketing tactics.

    Personalization is a conundrum for many marketers because most of us (i.e. consumers) harbor contradictory attitudes about personalization. Many research studies have shown that most consumers want to receive offers and other marketing communications that are personalized and contextually relevant. But research has also shown that many consumers are concerned about the quantity and type of personal data that companies are collecting. The problem is, effective personalized marketing requires the collection and interpretation of data. So, we consumers can’t really have it both ways.

    For an insightful discussion about how companies can address the inevitable tension between personalization and privacy, I highly recommend a recent report by Capgemini Consulting (https://www.capgemini-consulting.com/privacy-vs-personalization).

  3. Thomas Wieberneit November 27, 2016 at 11:55 am (226 comments) #

    Hi David, thanks for your reply. I will certainly have a look at the thoughts of the Capgemini folks.

    I agree that personalization is a conundrum, which probably finds its resolution in age groups. It looks like younger people are far more acceptant than ‘oldies’ … there might be a factor of ‘being used to’ or ‘not knowing something else’ to it.

    For the sake of spurring a discussion:

    What I do think is that the problem is less the collection of personal data in itself (which is already bad enough because no consent is usually asked for nor are there many possibilities for opting out) but its usage. I dare saying that most companies do not use the collected data – which is by no means their property – to add value to/for the customer but for themselves.

    From the work that I do with retail companies I can see that their opening rates of mail adverts do not really depend on perfect personalization (although they tend to become sophisticated on their web sites) – I, e.g., have worked with a company that describes itself as a mass marketer – and having looked at their campaign strategies there is no personalization but addressing their customers by name involved. Still they have opening rates of 70% – don’t remember click-through rates anymore, sorry. Personally, I open/look at marketing mails from very few companies, and some of them do just the same.

    Conclusion: Perfect personalization is often not really necessary, with that the data collection may become doubtful as well.

    Given that the problem seems to lie far deeper. And transparency about what gets collected and used plus the customers ability to have the data removed seems important to solve this (the data does not belong to the company).

    Lastly I would argue that highly targeted manipulation is more manipulative than a scattergun approach. Why would one do it else? This is besides the inherent danger that the argument in itself poses.

    Thomas
    @twieberneit

  4. David Dodd November 28, 2016 at 5:28 pm (19 comments) #

    Hello Thomas,

    Thanks for your follow-up comment – which raises several important issues. In the interest of space, I’ll limit this response to the question of whether personalized marketing – particularly when the basis of the personalization is not expressly disclosed – is manipulative.

    If I understand you correctly, you believe that most companies do not use the personal data they collect to create personalized marketing offers or messages that create value for customers. Instead, most companies use personalized marketing for their own benefit, and that’s what makes the practice manipulative.

    My problem with this approach is that self-interest is an inherent characteristic of marketing. As Sergio Zyman wrote almost twenty years ago, “The sole purpose of marketing is to get more people to buy more of your product, more often, for more money.” So, if the presence of self-interest is what makes marketing manipulative, then all marketing is manipulative.

    But I don’t believe that value for the customer and value for the selling company are mutually exclusive. It isn’t – or at least doesn’t have to be – either/or. In fact, I would argue that the most effective way to “get more people to buy more of your product, more often, for more money” is to consistently deliver value and utility to customers. I discussed this concept in an earlier article here (http://customerthink.com/why-successful-marketing-is-all-about-give-to-get/)

    In my view, if using what I know about my customers enables me to create personalized marketing that provides a more effective way to deliver relevance, value, and utility to my customers, it’s not manipulative just because it also helps me sell more.

    By the way, in your initial comment, you mentioned the example of the father who learned about the pregnancy of his teenage daughter because of personalized marketing. It turns out that there’s a fascinating backstory behind that example – one that illustrates the potential benefits and the potential dangers of personalization. I’m planning to cover that topic in a future article.

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