Personalization is not a tactic, it’s a data strategy
It’s an established fact that personalization delivers dramatic results. An HBR study quantified the benefits of personalization as an ROI of five to eight times the initial marketing spend and sales lift of 10% or more. Because personalization is, at its core a data-led business strategy, the benefits are not limited to customer relationships or marketing. Done right, personalization directly benefits the bottom line by way of its inherent data efficiencies and cultural paradigms.
Getting started with personalization: Go beyond the basics
Any millennial will tell you, being ‘basic’ is no good. It’s a judgment that will cost you big time. Forrester analyst Brendan Witcher points out, “Nobody comes to your website to be reminded that it’s Friday or see their name on the homepage. I know my name. I don’t need you to tell me that. I get it.”
Personalized emails that squander insights by stating the obvious make your brand’s understanding of your customers appear basic. And that’s a fast track to being spam-filtered and forgotten.
Conversely, email campaigns that consistently demonstrate a refined understanding of how individual customers define relevance and value are transformative. You’ll grab the email brass ring—an entry on the ‘Safe Senders’ list. Your brand becomes a trusted companion in a long-term customer journey straight out of the Hero’s Journey marketing playbook.
What do you really know about your customers?
In a recent webinar, Witcher threw down a challenge:
“Go back to your organization. Print out your customer relationship database and look at the columns. Ignore the rows. Just look at the column headers. What do you really know about your customer?”
His response is a bitter pill. It’s also the prescription for leveling up on personalization.
“I’ll bet it’s very, very little. Which is why your personalization efforts are probably very low. So how do you get customers to talk to you?” Witcher added. “We have to exchange value…for data. It’s value in exchange for data.”
Personalization done right = Using the right data
Speaking about common obstacles encountered in the first steps towards personalization at scale, Kai Vollhardt, a partner at McKinsey, noted that two of the biggest barriers to entry are based on misconceptions, rather than any actual lack of resources.
- First, many companies assume that to up their personalization game, they need new data resources. Most companies are already collecting vast amounts of customer data. It’s just not limited to your CRM. What’s really needed? Organize, identify and analyze the right data from existing info systems across your organization.
- A second common misconception is the starting point for personalization processes like email campaigns. Vollhardt warns that thinking in terms of seasonal or general events is a mistake. Rather than a national holiday, personalized emails must be based on triggers.
“Triggers are specific occasions when a particular message will be most valuable to a customer. A customer moving to a new home, for example, is a trigger for an energy company. In my experience, trigger-based actions have three to four times the effect of standard communication.”
Already have a solid multichannel personalization strategy?
Witcher stresses that personalization is a data strategy that spans channels—email, a mobile app, a loyalty program—and touchpoints. ‘Strategy’ is a term applied at the organizational level. From the C-suite to marketing to logistics to sales associates and the help desk.
For companies that have made that paradigm shift, the next step is to ensure that your data-led strategy is baked into the culture and organizational structure. Stitch Fix CEO Katrina Lake explains, “Data science isn’t woven into our culture; it is our culture. We started with it at the heart of the business, rather than adding it to a traditional organizational structure.”
Simplify to increase efficiency: Demolish data silos
What does that mean? To fully leverage your data, invert the convention that data infrastructure is fit to the business model. Data is the business model.
This may seem daunting. But for most companies, rather than a complexity, this is a simplification process. You’ve already heard the mantra: Demolish data silos! Get your data—and departments—talking to each other.
The benefits of this approach are not limited to customer experience. For example, upon connecting data sources, it’s not uncommon to discover duplicate data stores or processes, and other opportunities to enhance efficiency.
A 2018 McKinsey review of hundreds of AI use cases highlighted one study that calculated $1.4‒2.6 trillion gains in marketing alone when AI was applied to a post-silo data stack. Marketing and supply chain management were the biggest winners. But the benefits of using AI on un-siloed data can be felt throughout any organization. Consider the impact of real-time customer feedback on R&D processes.
Once your data are interconnected, what you have are individualized 360-degree customer profiles. This is where omnichannel personalization gets real, as in real-time. There are many ways to deliver personalization. What’s crucial is delivering that personalized experience on the platform preferred by the customer in that moment. It is not a static preference.
This is where contextual and environmental data enter the equation. For example, showing comparison charts on a mobile app to a customer while they are in a brick and mortar store. Or, distinguishing their spouse’s preferences and routines. And using that information to deliver email coupons on Wednesdays that are tailored to the local weekend weather forecast.
Personalization and omnichannel data strategies converge to provide consistent, relevant & useful individualized customer experiences that are both in-the-moment and accessible simultaneously across all channels.
Next-level omnichannel personalization
You may see massive distinctions among the operations of your mobile app, website and physical storefronts. Your customer views them as a single entity—your brand. And they expect a seamless personalized experience that reflects that fact. A brilliant, highly personalized email campaign can morph into an epic failure if customers cannot quickly and easily locate the recommended product at their preferred touchpoint.
How do you consistently deliver seamless, personalized, in-the-moment engagement and value? By predicting individual customer intent in-the-moment.
Next-level omnichannel personalization enables companies to provide a highly relevant, personalized experiences in a single interaction because they use 360-degree profiles that encompass historical data and present context to predict individual consumer intent as an iterative, dynamic process.
Regardless of where your brand is today, it’s easier than you think to level-up customer experience with omnichannel personalization.
