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Beware of the Personalization of Everything

By Jennifer Polk | December 09, 2015 | 0 Comments

Personalization is a hot topic within digital marketing, but marketers should beware of the personalization of everything and the risk of investing in an area that may not drive immediate ROI.

Beware the Personalization of EverythingSocial networking sites, mobile applications and connected devices that identify individual users and anticipate the type of content and engagement they prefer, set the bar high for brands to personalize their interactions with customers. Customer data and analytic, marketing automation and personalization engines make it possible to tailor nearly every aspect of digital marketing, from customized emails to a bespoke digital commerce sites.

Most customers will tell you they want a more personalization. But do they value it? Are they willing to pay for it? Will they buy more, or at least more often, as a result of personalization?  If not, how much should marketers invest in personalization and how should they measure success?

Are you personalizing what matters?

How do marketers know what they should and shouldn’t personalize? Are there limits on customers’ appetites for one-to-one engagement? Most discussion about limiting personalization has focused on demographic differences and customer concerns about data privacy. While those dynamics matter, another important dynamic is the need to align personalization efforts with customer expectations and creation of mutual value.  Delivering personalization has been shown to increase customer engagement, but engagement doesn’t always translate into a more profitable customer relationship.

Some personalization efforts have a meaningful effect on the overall customer experience by making customers lives easier. Other tactics, particularly those that focus solely on messaging, may have a limited impact, leading to only minor improvements in marketing metrics—a slight bump in the email open rate or minuscule increase in click through rate—and no real change in business outcomes. Every bit counts, but personalization takes significant upfront investment and should be prioritized based on what matters most to customers. Don’t just personalize marketing, deliver a personalized experience.

Are you playing the long game vs looking for a quick win?

Personalizing even a single aspect of the customer experience, such as marketing, takes sustained investments in customer data and analytics—including spending on data management and analytic tools, hiring the right analytical talent, and developing or revamping marketing processes. It also requires technology and techniques that allow marketers to apply insight to execution, such as prioritizing marketing channels and platforms that enable audience segmentation and targeting over those that only support generic customer engagement.

The immediate impact of personalization on short-term results, like revenue and profits, may be minimal compared to long-term improvement in lifetime customer value. Before spending on personalization, marketers need to decide if they’re playing the long game or looking for a quick win. Even though personalization is a hot topic, it may not be the highest and best use of marketing resources for every company. If the c-suite is focused on quarterly results, marketers may need to balance personalization that delivers long-term value with investments that yield an immediate return.

Assess the business goals and time frame. What does the organization need to achieve and by when. Then figure out what type of personalization will achieve those goals by creating value for customers, and, in turn, the company. What types of personalization are customers willing to pay for—either explicitly or implicitly—and what is merely laying the foundation to improve customer engagement, retention, loyalty and lifetime customer value? Strike a balance of delivering short-term success to get c-suite buy-in and funding to pursue deeper levels of personalization and create lasting value.

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