Feature
Personalization provides measurable benefits to organizations that do it well: increased engagement, higher conversions, improved customer loyalty. But there’s a more simple reason why companies are doubling down on personalization: customers have come to expect it.
According to Salesforce’s 2019 State of the Connected Consumer report, 64% of the survey’s 8,022 worldwide consumer and business buyer respondents expect a somewhat personalized interaction with companies. An even higher percentage of marketers themselves — 88% — believe their customers expect personalization, and the majority say it enhances customer relationships.
Personalization Delivers Great CX
"Right now, personalization is so critical in terms of advancing customer relationships and delivering great customer experiences," said Jill Grozalsky, product marketing director, experience platform, Sitecore. "Customer mindshare is so much harder to get, so you have to make that experience stand out. Personalization helps deliver that experience, but it also builds trust and loyalty — most customers demand personalization because it makes them feel the company understands their needs and respects their time."
McKinsey’s 2019 report, The Future of Personalization and How to Get Ready for It predicted personalization will become the prime driver of marketing success by 2024. But only if it’s done right. That success is built on a foundation of mutual respect and trust, and bolstered by a company-wide commitment to digital transformation, transparency and reciprocity, said Bruce Temkin, co-founder of CXPA.org and head of Qualtrics XM Institute.
“Savvy organizations understand the trade-offs inherent with personalization. People want to be treated as though your company knows them — if you don’t, then they think it’s ignorance — then they’re thinking, ‘Why are you asking me that question again? Don’t you know that about me already?’” Temkin said. “But if you’re just collecting data for a company’s own needs, just to wring more out of the customer, then that’s too far. I think of it as the need to have a fair exchange of value. To what degree is the customer willing to give their information to the company to use in a way that provides them with equal perceived value?”
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The Trade-off of Personalization: Data for Value
Customers are used to giving up their data to companies, with the expectation that it will be used to provide them with value, whether that takes the form of special offers, discounts, recommendations and the like. But even as these tactics evolve into hyper-personalization, some companies are better at delivering that reciprocal value than others, said Jakki Geiger, chief marketing officer for enterprise data management platform provider Reltio.
“Not all brands are great at leveraging that data to drive hyper-personalized experiences to delight their customers,” Geiger said. “Let's face it, you can't deliver hyper-personalization if your customer data is fragmented across functional silos. You can't respect consent and communication preferences if they are only managed at a functional or channel level.”
Success in personalization starts with making sure you have the right data, Grozalsky said. And the data that’s right for you depends on what you’re trying to accomplish with personalization efforts in general, as well as the industry and market segment you’re working in specifically, she continued.
“Primarily, it’s engagement data that is hugely important. Having a clear understanding not just of who they are but of their mindset and where [personalization] can and can’t be effective, as well as data about how they’re interacting with your content and through which channels they’re doing so,” Grozalsky said.
This is where reciprocity and transparency come in, said Temkin. While today’s customers understand the trade-offs inherent in giving their data to companies in return for value, the relationship can quickly sour and trust can quickly be broken if data’s used in a way the customer didn’t consent to.
“Companies should be collecting any data they can that’s reasonable to collect — we’re past the point where I think folks won’t expect to have to give up information in that way,” said Temkin. “But it’s what we do with that information after collection that matters to them, now. So, don’t collect data that you don’t plan on using to deliver value. But, do make it transparent by design. Help customers understand what you’re going to use that data for; why they’re seeing a specific ad or why they’re getting a particular offer, for instance. Give them a transparent view into what data you’re using and why you’re using it that way."
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The more personalized the experience, the more transparent you must be about how and why you’re collecting their data and what you’ll use it for, Grozalsky said.
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Be Transparent and Open
Brands that practice transparency can help preserve a sense of mutual trust, respect, security and privacy, even if customers are sharing ever-increasing amount of personal information, Grozalsky said.
“You should always be providing an opt-in or opt-out option at different points,” she said. “Over time, a customer’s preferences do change, so you have to preserve that sense of respect. ‘We’re going to use this data to tailor recommendations, offers or content to you’ is often enough to put them at ease and get them sharing. Of course, you should always be aware of privacy principles, data compliance laws and regulations, best practices for data protection and retention, too.”
You want to make sure that the content you’re delivering is driving engagement and urging customers to the next engagement point, call to action, purchase, or whatever the next step in their journey may be, Grozalsky said. One of the great things about personalization is you can always learn things about your customer as much from what they are doing as what they aren’t.
“You can always learn something, even if it doesn’t fit your narrative; even if it’s unexpected,” she said. “If I have a hypothesis — 'The customer’s going to do X after they interact with this content' — and it turns out they do the opposite, or they do nothing, that tells you something! It’s never really a failure, because you’re learning how they’re being propelled, or not. Any data that gets you closer to understanding your targeted customer is a win."
Take care, though, that you’re always offering an ‘out.’ Personalization requires making assumptions and sending customers down certain pre-designed paths, Grozalsky says, but you have to offer feedback touchpoints along the way.
“If you can’t give them a way to respond one way or the other and show you how they are responding to the personalization at those points of the journey, if the content isn’t relevant, they’re going to leave,” she said. “Any data you gather via personalization can be good data because it will tell you information about your customer. But, if you back them against a wall so they feel they don’t have any choice but to leave — then you will have no data whatsoever.”
