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If Data Fuels Personalization, Are You Running on Empty?

By Jennifer Polk | November 12, 2020 | 0 Comments

MarketingDigital Marketing Strategy and ExecutionMarketing Data and AnalyticsMarketing Technology and Emerging TrendsPersonalization

Data fuels personalization and loyalty, which explains why most efforts stall in the driveway.

green and black industrial machine

Photo by Sara Farshchi on Unsplash

Gartner predicts by 2025, 80% of marketers who have invested in personalization will abandon their efforts due to lack of ROI, the perils of customer data management or both.

Personalization is reshaping how product discovery.  One element of personalization consumers value most is access to benefits not available to others. This is a hallmark of loyalty programs. Consumer demand is sustaining attention and investment in personalization and loyalty. For example, personalization and loyalty management tools are core to the B2C martech stack.

Focusing just on the destination often distracts us from the journey.

Phrases like “personalized customer engagement” and “one-to-one interactions” start to show up in vision statements and strategies. You see the chance to link marketing plans to these priorities. Then comes approval and a modest budget. Now you’re pursuing personalization. This is great!

But there’s a good chance you have yet to answer these critical questions about personalization:

  • How will it help us achieve business goals like loyalty?
  • How will it help our customers meet their goals?
  • Who do we want to target with personalization?

And the most vital question: 

  • What data will we need to do it?

Things just got complicated. Maybe you have a sense of how personalization can help your business. But how are you supposed know what customers want to achieve? You’ve run into the first, of many, roundabouts.

Knowing what customers want requires insight you may not have.

How do you pursue personalization if you don’t know what customers want?

Narrow your scope. Don’t approach personalization as if it is the goal. Instead, start with a specific business or marketing goal. Define success measures to track impact against that goal. Work toward your business goal while also generating insight into customer goals.

Suppose your business goal is new customer acquisition. Your marketing goal may be improving ad reach. Your personalization efforts might focus on segmentation and media targeting to maximize reach. Clicks or views will give you additional insight into segment-level interests or affinity. While this doesn’t tell you everything about customer goals, it can increase your insight.

Define specific data needs based on your scope of personalization.

Personalization at the top of the funnel, based on third party data–which is really personification–is different from a targeted mobile or email campaign to a list of subscribers. Presumably, subscribers have a relationship with your brand. This gives you a better idea of their goals. You may have the data you need to start testing that hypothesis. Or you may need to integrate transaction data to improve message relevance. Don’t assume you need more data. Instead, you may need to connect data your company already has.

This assumed need for data often drives marketers to target loyalty members . Loyalty program members are a common target of early stage personalization because brands have more data on these customers than others. Yet, personalization remains focused on achieving business goals with little thought to customer goals. In other words, even with more data, marketers still have the wrong insight. You know they buy three times last year, across two categories, but you don’t know how personalization can help them reach their goals.

Start where you. Prepare to test and learn what matters to customers, what works and what doesn’t. 

Personalization efforts demand you have a goal. But that goal should be at the meeting point of company and customer success. Figuring out what that means for your company may be easy. Yet, discovering what it means for customers takes data-driven insight gathered through time and testing. Start with a hypothesis and test to determine if you’re right. Audit the data you have or can access before you invest in data collection. Begin personalization in a single touchpoint, channel or campaign. Test. Learn. Iterate. Repeat.

As you scale, focus first on deepening your insight and understanding of customer goals, rather than assuming you need to expand into additional channels. Success on the path to personalization isn’t about racing at 80 mph down the expressway. It’s about taking one turn after another until you find your way.

This week’s analyst picks have been chosen to guide you on your path, from program design to data utilization, from privacy to tactical execution.

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