Personalization is one of the primary reasons organizations are aggressively investing in data analytics technology.

The ability to better meet the needs of customers by understanding and anticipating their behaviors is what’s made big data analytics one of the defining business opportunities of our time.

Just as important as the potential impact of personalization is its ready attainability. 

Personalization doesn’t demand the kind of ideal conditions that only exist in vendors’ marketing literature, nor does it take an endless budget or a department full of data scientists. 

Organizations of all sizes can — and should — use the ability to capture and analyze data to effectively improve their relationships with customers through personalization.

And yet, so few actually do. At least, few are doing so effectively. There are, of course, many reasons for this, but none more so than the mistaken assumption that personalization is a science

Certainly, science plays an enormous role in any successful personalization initiative. Without science, there is no personalization, at least not in the modern, data-centric sense of the word.

The more I talk to customers today, the more I get the sense that personalization has become synonymous with analysis. The prevailing wisdom seems to be that we analyze data, therefore our actions and offerings are personalized. Unfortunately, that’s simply not the case.

Part Science, Part Art

Effective personalization occurs when reliable metrics are used in a creative fashion. For many years, the biggest road block was getting those reliable metrics. 

Companies had plenty of creative types, but few ways to access and analyze data to create insights on which they could take action. Today, it’s beginning to feel as if companies have over-rotated in the opposite direction. 

We’ve placed such an emphasis on data analysis that we’ve forgotten the other half of the personalization equation — creativity.

Much as we IT vendors would like to think otherwise, creativity cannot and does not come from an IT or BI system. You cannot automate creativity. Big data, small data or anything in between, the creativity required to deliver smartly personalized services, content or marketing offers to customers still comes from the creative minds within your organization.

The Role of Analytics in Personalization

Personalization may not be a science, but the role of analytics in creating personalized offers is still critical. Just as data is the raw material for analytics, analytics is the raw material for personalization. 

Analytics is the fuel to the fire: It gives organizations the metrics on which creative minds can act. It provides the justification for what you’re doing — or the explanation why what you’re doing is wrong. 

Analytics is also what makes it possible for organizations to take a concept that implies intimacy and scale it out to thousands of customers.

5 Keys to Effective Personalization

Personalization is easy. 

Effective personalization – personalization that fosters better relationships, increases customer conversion rates and ultimately drives revenue for the organization – is another story. That requires a combination of analysis, creativity, timing and precision. 

Here then are five best-practices organizations can leverage to create truly effective personalization:

  1. Start with integration. Personalization starts with data integration. Even the smallest of companies have multiple streams of data coming from different systems. You can’t understand the buying pattern of a shopper, for example, unless you understand both his online and in-store behaviors. Unless you’re pulling together all of your sources of data, you can’t personalize.
  2. Invest in prediction. Personalization isn’t just about knowing what your customers have done in the past – it’s about knowing what they’re going to do in the future. It isn’t enough for a retailer to know that I like to shop at its store. It needs to know when I’m likely to do so next and, just as importantly, what I’d be interested in buying when I do. That’s why it’s critical to create an advanced analytics environment that leverages modern predictive and prescriptive capabilities.
  3. Right time over real time. Real time is all the rage right now, fueled by companies’ desire to act with urgency at all times. But real time doesn’t always make sense when you’re trying to personalize. Right time does. The gal who just got an oil change doesn’t need a coupon for another oil change 60 seconds after she leaves the shop. She needs it 60 days after she leaves. Having data on a customer doesn’t mean you need to act on it immediately. When it comes to personalization, right time trumps real time, every time.
  4. Ensure a 360-degree view of your customer. Base interactions with customers off a complete view of who they are and how they behave. From marketing all the way to the delivery of whatever goods or services you sell, use the information you have to make decisions and implement programs that make sense for your customers — and do so creatively in order to stand out from your competition. Personalization should be about more than just coupons. Serve up the data, and then empower your creative thinkers to act on it in ways that others aren’t.
  5. Leverage creative energy across the business. Taking things a step further, personalization should be about more than just marketing. Empower product teams and client service teams with the data insights and creative freedom they too need to personalize, so that when that personalized marketing offer draws a customer in, she is met with products and services that are equally personalized. A right-timed coupon offering 50 percent off a car tune-up just when I need it is a good start. But it would be even better if the car servicing I’m provided specifically matches the needs of my automobile and my driving patterns. Personalization driven by a combination of smart analytics and creativity can have an impact that cuts across your business functions.

At the end of the day, remember that personalization is both a science and an art. 

It requires a blended approach in which data analysis is tempered with a creative human touch. Just as audiences eventually tired of the mass marketing approach behind TV commercials and print ads, so too will they tire of personalized marketing if it’s not truly personal. 

Over-rotate on automation and optimization, and you’ll do more harm than good. Find the right balance, however, and the possibilities are virtually endless.

Title image by Steven Lewis.