Personalization and Customer Experience—Strategy vs Reality

Today, if you get into a discussion about the top trends driving business growth; digital transformation, customer experience or personalization are sure to be top of mind. Industry research consistently highlights that customers are looking for better personalization. According to Gartner, the purpose of personalization is to create relevant and individualized customer interactions based on unique user data as well as behavioral data of similar individuals. When it comes to focusing on a website personalization strategy, the Dynamic Yield Report revealed that 95% of companies believe in the long-term benefits of personalization.

Having a personalization goal is one thing but accomplishing it is an entirely different challenge. Many companies have initialized personalization in some form, either in marketing messages, customer engagement or website optimization and have found it difficult to drive results. It requires the ability to identify what is relevant at a specific point in time, as well as, sort through thousands of constantly changing variables. As much as personalization plays an important role going forward, the cost of getting it wrong is high. The reality is that companies are currently very far from delivering on the personalized experiences that customers will respond to.

When personalization goes wrong

Gaining basic customer information, such as an email address or phone number, is not enough to implement an effective personalization strategy. Companies cannot assume that because a customer shopped once in their store, or on their website, that they have enough information to engage with that customer effectively. As an example: A woman shops in a major department store and purchases lingerie. When asked to sign up for future offers, she gives her husband’s home email address as she doesn’t want lingerie emails being delivered to her work email address. For the next few months, the brand emails personalized offers, but the wife never sees them, because the emails get delivered to her husband, who simply deletes them in annoyance. The result: the targeted personalization never results in more sales and the experience could even have a negative impact on the brand.

The other challenges of personalization

Even if customers are accurately targeted, individual preferences are constantly changing and influenced by multiple external factors—which are also quite dynamic. This highlights a number of potential issues: first, the question of data accuracy in both its collection and analysis. Second, timeliness becomes critical as the pace of change continues to accelerate. Data that is a few months old may no longer be relevant. This drives the importance for companies to find better ways to get accurate data that reflects real-time interactions with live users. Given these challenges, perhaps the starting point should not be how to make personalization work, but understanding why customers want it.

Website personalization strategy starts with listening to the voice of the customer

The connected and always-on modern lifestyle means people are constantly being exposed to messaging in some form or another. Forget television ads, billboards and junk mail - people can’t even browse social media or search for information online without being bombarded with promotions and sponsored content. People are fatigued by it, especially as the large majority of messages are not relevant to them. That’s why they’re demanding personalization. It’s not that they want to be disconnected or don’t want to hear about great offers. But if companies want their money, the offers need to be relevant, useful and beneficial.

Website personalization best practices

Artificial intelligence (AI) has an important role to play in meeting the demand for personalization. AI has the ability to track and analyze vast amounts of data, quickly—which can help access data to deliver an experience which is personalized, relevant, and timely. If companies are serious about personalization, they will need to invest in the kind of technology that makes this possible. This also demands a company structure that enables them to maximize on that investment. Departments need to be able to share information and collaborate on projects with a clearly defined personalization strategy in place.

Many customers are willing to trade off privacy if it translates into a better customer experience, companies still have an obligation to keep customer data safe. In fact, regulations such as GDPR demand it. Companies must give careful consideration as to how they track and store personally identifiable information (PII) and unique user parameters as well as how much of it is necessary to implement effective personalization.

The voice of the customer (VOC) is loud and clear in the request for personalization, but the why behind it should not be forgotten. People want relevance and convenience, to have information and product suggestions served to them rather than having to search for it on their own. However, they don’t want to be spammed with irrelevant messaging and they don’t want to be put into rigid boxes. They want to be valued as individuals and for their unique preferences and interests. A sure path to delivering an effective personalized experience comes from listening to the VOC and adapting personalization strategies accordingly.

Currently the offerings of only a few companies succeed in delivering personalization. It is clear from those leaders that AI-based digital strategies are proving to be most effective. This new technology is going to play an increasingly vital role in helping companies deliver on customer expectations. The question is: Will your company be one of the market leaders in personalization success?