The Personalization Misconception

“Data-Driven Thinking” is written by members of the media community and contains fresh ideas on the digital revolution in media.

Today’s column is written by Victor Davidson, US lead at DBi Consulting.

One of the most important, and often misunderstood, aspects of a data strategy is the approach to personalization.

Recently I was asked what “personalization” actually means. It’s a very good question. Like most marketing jargon, it has different definitions depending who you ask. For me, personalization is the use of data to provide people with a tailored experience across channels.

I draw a distinction between customization and personalization. Customization is focused on a single user interaction, such as using imagery on a website associated with a product that a user has recently purchased or browsed. It’s a point-in-time recognition of a user based on a single data point or interaction. It can be tempting to use customization and personalization interchangeably, but that’s not entirely correct.

Personalization takes the interaction between a brand and a customer a step further than customization and extends the experience across multiple channels.

American Airlines does a fantastic job of this. When I visit its website ahead of a flight, my departure city is pre-filled, and when I call its customer service line, the airline recognizes my cell number, refers to me by name and puts me in queue based on my status tier. As a customer, this type of experience makes me feel that American Airlines knows me and understands what I need from it regardless of whether I interact with the company online or over the phone. That’s multichannel personalization.

So, if marketers are trying to build a personalization strategy, where to begin? I always recommend starting with what they have the most control over. For most marketers, that is their website. They should start with some simple A/B testing. If they’re not already using a site personalization tool such as Optimizely or Adobe Target, they should consider it. I’ve seen marketers increase conversion rates by 50% or more just by implementing a structured A/B testing approach.

When building a testing plan, they should include some hypothesis about what a specific audience or group of users wants to see, and test different creative ideas. They must balance the number of creative iterations against the amount of traffic they have so any findings are statistically significant. Don’t overlook the importance of documenting these findings and the related implications. I’ve seen many personalization efforts lose steam because no one kept track of what was tested, why and what the future implications were.

Next, marketers should consider building interaction-based journeys on their site. So, if I click a personalized content module, the next time I come back I should be served that imagery again. Marketers should consider what messages and experience helps the consumer move through their purchase journey. From an ecommerce perspective, if a brand has customized the home page to show previous purchases, can it use historical purchase data to find a different product that is often purchased next and bring that product recommendation forward?

Once marketers get that testing down, they must think about their paid media investment. In particular, they should think about using a dynamic creative ad server that can connect with their onsite personalization tool. This will allow them to test creative variations as they begin prospecting new customers and bring a similar experience to the website. Dynamic creative often increases front-end engagement (CTR) by 30% or more while also providing a more relevant experience to their customers. Now they’ve got their digital paid content aligned to a changing website experience.

Lastly, marketers must think about how they can bring that approach directly to their product or service. This is a step that requires the most amount of collaboration across teams, but it’s also the most genuine way to personalize the customer experience.

A perfect example is Starbucks. Using its app, I can purchase products before I even go into the store and have them waiting for me. I can save my favorite purchases, complete with any customization I want, and send those orders to any Starbucks location nearby. My entire interaction with the brand – from in-app to in-store – is personalized just for me.

Building a personalization practice takes time and structure, but if marketers make the commitment and build the right process, they’ll have happier customers and a more profitable business.

Follow Victor Davidson (@vicyogi), Havas Media (@HavasMedia), Havas Group (@HavasGroup) and AdExchanger (@adexchanger) on Twitter.

This post was syndicated from Ad Exchanger.