The parents of a good friend of mine run the town fireplace store. The store is incredible, with the largest square footage dedicated to fire that most of us will ever see.
There are gas fireplaces, wood-burning fireplaces, stoves, electronic fireplaces with as many features as a car, fireplaces with remote controls and fireplaces without.
If there’s a particular style of fireplace you’re looking for, chances are they carry it.
Mass Appeal or Product Customization?
So I was surprised when my friend’s father told me one day that, “90 percent of our sales volume is in three models. Everything else is really here just to make people feel comfortable with their purchase decisions.”
In the years since he told me this, I’ve thought a lot about that concept, particularly as the pendulum has swung further and further toward personalization and the customer experience models that support it.
The biggest question for me has been whether the needs of a business can be better served by focusing on broad experiences that appeal to many people or by custom-tailoring experiences to every individual.
Custom-tailored approaches are more complex to create, increase costs and, most frustrating of all, don’t automatically lead to an improved value proposition for either you or your customers.
Assessing the Value of Personalization
Consequently, at the start of any personalization project, particularly one with heavy input from analytics, big data or modeling, I find it helpful to ask these questions to inform and guide my approach:
- How much human involvement will be required in the purchase decision-making process?
A high level of personal involvement may mean a simpler model that is easier to understand, making the process of analyzing future purchase scenarios more effective.
- Will my customer receive incremental value from added customization?
If there is little or no perceived customer benefit, how can there be any expectation of increased sales or margins? In cases like those, the simpler, mass market approach will probably be better.
- Can I address my customer’s purchase needs in a less complex way?
Some customer experience scenarios are hard and require going the extra mile. Others really don’t need to be made more complicated than necessary.
- How will the relative costs of each solution compare?
How will the relative costs in time, money and ongoing maintenance compare between alternative products and services?
When Personalization Fits
Of course, sometimes the value proposition arguing for greater personalization is so obvious it’s jumping up and down begging for attention. Here are some signs to look for to help understand when that might be the case:
- Everything you do with personalization, whether a small test or a larger effort, is knocking it out of the park. In that case, go with what has been working so far.
- Your analytics insights all point toward personalization being effective. If the data is telling you to go, listen to it and follow its lead.
- Your customer segmentation efforts keep producing lots of small groups rather than three or four large ones. This probably means your value proposition varies greatly from customer to customer. In that case, it’s worth exploring the case for more personalization.
Empathy for Customers
The moral of the story is to know your customers. The better you can empathize with them on a deeply personal level to understand their purchasing decisions, concerns and emotional desires, the easier it will be to provide them with the perfect personalized experience.
For my friend’s family that knowledge came from everyday interactions with customers over a 20-year time frame.
You may not have that same track record, but your desire to provide outstanding customer service, combined with tools to give you analytic guidance, can take your decision-making a long way.