Silhouetted customers that marketers want to know more about
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Marketers want to know their customers and prospects on a personal level. Almost 100 percent said in a study this year by Evergage/Researchscape International (PDF) they believe that personalization helps advance customer relationships.  But not all marketers feel they're earning gold medals in the personalization Olympics. Case in point, the same report found only 12 percent of marketers are “very” or “extremely” satisfied in the level of personalization in their marketing efforts, while 38 percent are “moderately” satisfied. Why? Probably because more than half of them (55 percent) don’t feel they have sufficient data and insights for effective personalization. Further, they’re housing their customer data, on average, in four different systems.

Do consumers even want personalization? Yes, but not all of them. About 50 percent of consumers in the U.S. either really or somewhat like to receive personalized messages, according to a study by Periscope by McKinsey (download required). French and UK respondents in that same study were less enthusiastic about personalization, with 38 percent and 37 percent, respectively, feeling somewhat or very favorable toward them. Consumers in Germany were more skeptical, with only 29 percent having a positive feeling about personalized messaging.

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Personalization's Never Been Easy

Personalization is an enticing vision for marketers. It's the core marketing message for many digital customer experience software providers. It’s a vision, however, tempered by unrealistic expectations, often-wrong application approaches and privacy restrictions and laws that give consumers more control over their personal data. “Personalization has been the most demo’d but least implemented function of DX (Digital Experience) platforms for over a decade,” said Tom Wentworth, chief marketing officer for RapidMiner and former CMO of Acquia, which provides personalization technology. “Marketers were sold a vision of personalization that required way too much effort from marketing teams to make it work.”

Wentworth found that earlier DX personalization products required marketers to create "if/then/else" style business rules to define personas. Then, they’d have to manually tag content to get it in front of the right person. “Almost no one,” Wentworth said, “went through all of that effort, and personalization was rarely implemented because of it.”

Today, machine learning has entered the picture, and the manual work is being eliminated. “There is still work to be done,” Wentworth said, “specifically in how DX personalization products automate content creation and tagging.”

What is Personalization at a Minimum?

A survey by Sailthru found that 75 percent of marketers believe that segmenting an audience fulfills the bare minimum requirements for personalization. It’s not going to get you to the personalization holy grail. That same survey found marketers have personalization challenges they're facing, with data (23 percent) and lack of resources (42 percent).

Sailthru researchers also asked marketers what they feel a brand needs to do in order to be able to say they provide a personalized customer experience:

  • Use customer demographic or behavioral data to segment audiences and message accordingly (75 percent)
  • Use customer behavioral and interest data to dynamically provide unique content or product recommendations (64 percent)
  • Predict the next set of actions a customer is likely to take, and tailor experiences and content to that customer based on the prediction (33 percent)
  • Use the customer’s name in communications (57 percent)
  • Dynamically coordinate messaging and marketing across multiple digital channels for individuals in real time (43 percent).

Related Article: Get to Know Your Shoppers the Way Netflix Knows Its Viewers

Segmenting, Persona-Building: Where it Went Wrong

Personalization efforts fail not only because brands leave technical capabilities on the shelf. They also fail because they take the wrong approaches toward understanding their customers and prospects, according to Brendan Witcher, vice president and principal analyst at Forrester who serves digital business strategy professionals. “What most marketers miss, is that what they think they are doing right is actually wrong. Personas, for example, are a horrible way of applying personalization. If I buy Yoga pants, that doesn’t make me a soccer mom, and you can very easily offend me, or at the very least make me feel misunderstood, if you treat me like one," said Witcher. 

Marketers need to target profiles, not personas, Witcher shared. Even marketing segmentation is a problem. Witcher finds there is nothing actually personal about comparing him to a bunch of other people. This is line with Witcher’s thinking in his report on personalization published in December (fee required) that stressed a move from segmentation to individualization. “The big a-ha moment some marketers have is when they realize the customer data they have — age, gender, zip code, income level, last product purchased — isn’t very powerful for creating personalization, and that their problem isn’t personalization delivery, but rather the lack of relevant data to do personalization that matters to the customer,” said Witcher.

Segmentation, Personas Worth Effort

The main objective in building a persona is to not only fully understand the activities or hobbies your ideal customer enjoys, but to understand what makes them tick and which triggers cause them to make a buying decision. 

Airto Zamorano, CEO of NumanaSEO, said that although some personalized marketing experiences "feel hollow and inauthentic," segmented marketing "seems to be very effective as you can use data to draw rational conclusions about specific demographics. This inherently feels more authentic to the consumer because it is." Marketers can also build strong personas if they learn the challenges, strengths, fears and weaknesses, he added.

Related Article: The Rocky Path to Personalization

Stop Trying to Be Amazon, Netflix

Unless you have the systems, data repositories and data science teams to do this kind of personalization, stop dreaming. “While DX personalization products like Acquia Lift and Adobe Target use many of the same machine learning algorithms, personalization pioneers like Amazon and Netflix have huge advantages that just can't be replicated by a product, including an enormous amount of data and large data science teams who deploy machine learning models specific to their needs,” Wentworth said.

As marketer Matthew Cyr of Clark University told us in 2016, “There’s a whole lot of logic you have to build in the back-end to make [our] system deliver the information you want to deliver to the right person at the right time. It’s that sort of figuring out how does the personalization piece interact with the typical experience of being on the website. It takes some getting used to for sure.”

Where Should You Start Personalizing Messages?

According to the Evergage report, most marketers (77 percent) use email for personalization efforts over other channels. Website (52 percent), mobile app (31 percent) and web application (24 percent) were next. Where else are they personalizing? Forrester’s Witcher cited the Forrester Q1 2016 Digital Experience Delivery Online Survey that found content on the website is the No. 1 area (75 percent), following by promotions/product offers (55 percent), product recommendations (49 percent) and reminders and alerts (44 percent).

Rachel Folz, director of digital marketing for Cerkl, said that marketers who decide to build an integrated, personalization-powered tech stack should start with their email system. “An opted-in email is one of your most valuable assets, even in a post-GDPR world,” Folz said. “Seek an email system that automatically personalizes your messages to your audience interests. Use their click and open patterns to develop personas.” Folz cautions that creating personas without a strong, deep data set is useless. “Your personas should be more than three categories,” she said. “Try to make them into real people. Don’t just name them, find them.”

After email, Folz suggests leveraging Artificial Intelligence (AI), then taking personas and applying them to your social and search campaigns. “If you can move past your fear of the robots making you obsolete,” Folz said, “you can build a marketing personalization stack that will make your email, social, and video strategies stronger."

Related Article: How to Deliver Personalized B2B Experiences with AI

Support Your Own Strengths

A strong personalization strategy entails recognizing your own strengths. For instance, retailers are moving from segmentation to individualization and multichannel retailers those with physical stores — have an advantage, according to Witcher. “Everyone can, and most do, offer product recommendations on site and in emails,” he said, “but getting customers to buy more is what retailers want to do, not necessarily what customers want to experience.” 

But not all are nailing personalization efforts yet. “The biggest problem today with many retailers is confusing the act of being customer-obsessed with actually being company-obsessed,” Witcher said.

The real power of personalization, he added, is when a retailer can offer individualized experiences to customers who want to buy online/pick-up in store. Those that want to communicate to their favorite store associate through the retailer's app. Those who want to try on makeup virtually in a store before they buy it. “These,” he said, “are the personalized experiences that actually add value to a customer’s life.” 

Data, Data, Data — Where Is It?

According to the Evergage study, 55 percent of marketers don’t feel they have sufficient data and insights to drive effective personalization. Witcher suggests in his report that brands need to consolidate data from internal databases and external partners in a single repository. Siloed data remains a problem for marketers today, Witcher told CMSWire, but it’s a problem that’s improving. “Data living across siloed systems is still an issue for most companies,” Witcher said, “but there has been a significant shift in the number of organizations who at least acknowledge that they are running at less than optimum levels because of their inability to work with data. This is a good start, but we have a ways to go.”

Jon Dick, marketing vice president for HubSpot, told CMSWire that between expanding first-party data, third-party data that can provide additional context, and the sophistication of modern CRM and customer data platforms (CDP), there’s never been a better time to leverage personalization. “That said,” Dick added, “leveraging this data to effectively drive personalization is still tough. Many (marketing technology) stacks are loosely integrated, and some of the most important data can’t be leveraged by marketers to drive relevant and timely personalized communications.”

Lizzy Foo Kune, research director at Gartner, captured nicely in her CMSWire post which systems manage customer data and help marketers create personalized experiences. The systems include: enterprise data warehouse platforms, customer identity and access management systems, CRMs, data management platforms, digital experience platforms, digital personalization engines, marketing dashboards, master data management platforms, multichannel marketing hubs and tag management systems. 

Related Article: A Marketer's Guide to GDPR: 3 Practical Tips for Compliant Personalization

Privacy Starting to Rule

Of course, harvesting personal data has a whole new set of challenges in the era of GDPR and laws like California’s new data privacy law. These developments mean the future of personalization will be based on trust, according to RapidMiner’s Wentworth. “And I think we'll start to see declared data emerge as the foundation of personalization, where consumers control what they share and who they share it with.”

The developments around GDPR and privacy laws also means companies can no longer have a casual approach to personalization, Witcher said, or the collection of data that drives personalization. “Many leading brands are now assigning someone in the organization as a ‘personalization specialist,’” Witcher said. “This is someone that understands the company’s strategic goals, translates that into personalization initiatives and keeps customer-facing teams across the organization in line with legal requirements.”

Start Small

Dick recommended marketers start by ensuring they can consistently and reliably track and access your customer data in a timely manner. CRMs need to be well integrated (or built into) your marketing systems. “When it’s time to start deploying personalization, start small,” Dick said. “Choose a few places where you can really understand a person’s intent, and leverage automation to provide a great marketing experience. Once you understand if it can impact your key metrics, you can pour gas on the fire and create some truly remarkable experiences.”