As consumers become more and more self directed, personalization has become the weapon of choice for marketers trying to reclaim some control of the shopping journey.
But it seems that weapon isn’t quite as sharp as it needs to be.
Most companies’ personalization initiatives barely make the grade, with the majority of marketers giving their own — and their competitors’ — efforts a grade of “C” or lower. (1)
It seems customers aren’t thrilled either. Only 22% reported being satisfied with the current personalization they receive. (2)
Why are so many marketers struggling with getting personalization right?
The way I see it, there’s two main factors: outdated strategy and the scarcity of individual level data.
A Shift in Strategy
According to Accenture “the goal of personalization should be to use data to make it easier for customers to buy and consume what they want. If the objective is to simply make a sale, companies risk tarnishing that long-term relationship.”
In other words, personalization needs to be approached with your consumer’s needs in mind — not as a way to improve the efficacy of your marketing efforts.
It needs to be relevant, not creepy.
This strategy seems to be one of the things marketers struggle with the most.
Too many companies are approaching personalization as a way to increase sales, instead of a way to offer value to their consumers. As a result many personalization attempts are essentially annoying ads that follow you around the internet and scream “I’m tracking you.”
Instead, marketers need to look for opportunities to provide consumers value with a personalized experience.
Opportunities like product exploration.
Focus on Convenience, Not Selling
Despite shoppers’ desire to be at the helm of their shopping journeys, they are often overwhelmed with the amount of information available to them.
Accenture found over 40% of consumers have made a purchase on another site or in-store because they were overwhelmed by too many options when trying to make a decision.
You can make it easier for consumers by narrowing their options and personalizing their shopping experiences with product recommendations.
Personalized recommendations make product exploration more convenient because they help ensure everything that customers see is relevant. Shoppers don’t have to wade through products that are of no interest to them to find what they are looking for.
However, recommendations have to be based on an understanding of the consumer’s wants and needs. They have to provide value to the consumer first and foremost.
It can be tempting to turn product recommendations into pushy retargeting campaigns. But it’s important to remember that selling more products is the result of effective product recommendations, not the main goal.
Just look at Amazon.
Amazon collects tons of shopping information. But instead of using it to chase people around and push products, they create a list of related products based on what consumers seem to be shopping for.
And people love it because it’s helpful.
There are an overwhelming number of products on Amazon, and the ‘Recommended For You’ section cuts down the time you spend searching for things. It’s great. It feels like you have your own personal shopper.
It’s “hey we thought you might like this” not “buy this now.”
Access to Individual Data
The majority of brands and retailers use rule based targeting to segments instead of a 1:1 algorithmic strategy to personalize their customer experiences. (3)
The problem is segmented personalization doesn’t create the kind of individualized experiences that customers expect. And segments based on pages visited, location, and browsing patterns (some of the most common criteria used to personalize experiences) can be generalized and flawed.
This is probably why consumers reported that marketers get their customization efforts “right” less than 30% of the time. (4)
However, individual level personalization is challenging within the current restraints most organizations face. You need to be able to track individuals across every touch point to ensure their personalization efforts are relevant. But individual data is typically spread out across different silos, making it next to impossible to get a complete picture of each consumer.
Companies also collect an immense amount of information and they don’t always have systems in place to cleanse, organize, or analyse that data -- let alone implement it in marketing campaigns.
Improvements to data management technology will undoubtedly shape they way we manage and analyse data. But I’d argue we also need to adapt the way we think about collecting data; specifically what information we are collecting.
Get the Right Data, Not Just More
Due to its sheer size, Big Data tends to be clumsy. Companies tend to collect large amounts of data blindly, and don’t know how to cleanse, transform, store, or consume it effectively. (5)
The problem is having a lot of data is useless unless it’s properly utilized. And there’s no point in gathering data you don’t have a plan to use.
Instead of gathering as much data as you can, focus on updating and collecting the data you actually need.
Digital promotions, like contests and sweepstakes, are actually incredibly effective ways to update individual information and fill gaps in your profiles. Because customers have to register to enter, you can collect individual level data for each customer instead of relying on segments.
You can also build promotions to gather specific information. Simple preference quizzes are data mines for personalized marketing. You can find out a customer’s preferences, interests, hobbies -- pretty much anything you need to personalize their experience. Just ensure the information you are collecting makes sense within the context of the game, and that the game provides value to your consumers.
The Bottom Line
Personalization is an effective tool for connecting with today’s self-directed consumers. But like any tool it needs to be sharpened and utilized effectively.
To compete in today’s market, you need to focus on honing your personalization strategy and updating your data collection technology. Otherwise you'll risk alienating and losing customers to other retailers/brands that are able to better understand — and meet — customer needs.