Personalization Framework

In the age of constant bombardment with marketing messages, staying relevant to prospects and customers is not just good practice in the manual; it is a matter of survival. Recipients of marketing messages are more immune to generic offers than ever, and a relentless series of emails and we-will-follow-you-to-the-end-of-your-journey attitude literally trained them to ignore anything that even resembles commercial messages. You want to stand out in this world of omnichannel marketing? Try to stand out by making it about “them,” not about “you.” Personalization Personalization is not just another buzzword that came after the Big Data hype. It actually is something that marketers must care about. According to Gartner Research, “By 2018, organizations that have fully invested in all types of online personalization will outsell companies that have not by more than 30 percent.” I am not sure how they boldly put such a numeric prediction out. But in this case, I honestly think that the gap could end up being even larger, because the winners in this zero-sum game are moving at light-speed, while others still stubbornly carry that “If you keep reaching out to them, they will respond” attitude. Being Clueless I’ve actually met marketers who asked me how many more emails they should send out each week to compensate for an increasing number of non-responders. They actually asked me if they can poke their customer base even more frequently. (They were sending uniform messages to everyone more than six times a week.) That means they had been diligently training the customers to ignore their emails. I bluntly told them they just can’t mail their way out of that trouble. They should think about contacting their targets less frequently, and staying relevant as much as possible. Do Unto Others It is not difficult to sell the concept of personalization to marketers. They, too, are recipients of irrelevant marketing messages, and I bet that they mercilessly purge them out of their personal inboxes on a daily basis. Surely, there are enough conference tracks, webinars, whitepapers and articles about this subject. But how are they supposed go about it? Do we even agree what that word means? (Refer to “What Does Personalization Mean to You?”) Based on all of the client meetings that I’ve been to, the answer unfortunately is a hard “no.” And that conclusion was not solely drawn from some rudimentary practices being conducted by many marketers in the name of personalization, either. Because of available data and in different stages of customer relationship development, we do need to differentiate various types of activities under that all-inclusive personalization banner. We Can Get There From Here There are many personalization frameworks out there, listing various endeavors, such as collaborative filtering (as in “if you bought that item, you must be interested in these products as well”). Then there’s customer segmentation, and personas development based on predictive modeling techniques, usually in that sequence. If you add technical elements in terms of ability to show different things to different people, multiplied by content generation and content management pieces, things get complicated quite fast. In any case, I do not agree with such sequential framework, as that is like saying the patient cannot be admitted to the operating room unless the doctor’s exhausted all of the simpler forms of treatments. Needless to say, some patients need surgery right away. Likewise, when it comes to maximizing the value of data assets for personalization, marketers should not avoid predictive modeling by habit, just because it sounds complicated. That shouldn’t be the way in this age. If you want to be sophisticated about personalization, you’ve got to get serious about analytics without resorting back to simper, often ready-made, options. Unless of course, you as a consumer think that seeing offers for similar (or the same) products that you’ve just purchased for next couple of months is an acceptable form of personalization. (I don’t.) Nuts and Bolts Then, what should be the not-so-sequential data framework for personalization? Allow me to introduce one based on activity type and data availability, as no marketer can be free from data scarcity issues at different stages of customer relationship development. First, let’s divide the personalization efforts into outbound and inbound activities: Outbound Personalization: This includes mail, email and any other media where each individual is targeted on a 1-on-1 basis. We have been calling that 1-to-1 marketing for some time now, and it stems all the way back to direct marketing days. Basically, this is a type of activity where the marketer must know to whom they are talking, and there is no excuse not using all available personalization techniques — including model-based personas coming from the 360-degree customer view. There is no excuse to employ anything less for both targeting (i.e., deciding whom to address) and personalization (i.e., knowing what to say and what to offer). We can do far better than using 1-dimensional segmentation techniques in this day of abundant data and computing power (refer to “Segments vs. Personas”). Inbound Personalization: This is more complicated than the outbound one, as we can’t always identify who just landed on the website or entered the store. Even diligent marketers who follow best practices in Web or store activity management may not be able to identify all shoppers; in many cases not even half of them, and not in time, either. Therefore, we must look at inbound personalization in two separate ways, mostly due to the data availability factor: Target Identity Known: If a visitor signs in when browsing the website, then the marketer can bring in all historical transaction data, response data, as well as geo-demographic data. The same is true for mobile apps, as most are continuously linked to the user’s identity. Similarly, during an inbound call or an online chat, the caller’s ID may be revealed, though not guaranteed. In such cases, it is a matter of connecting the dots and bringing in relevant data points and modeled persona scores (or segment/clusters) as fast as possible. This is a game of speed calling for near real-time response, so having pre-developing personas based on readily cleaned up data is very important. Then, it becomes a matter of matching personas (or segments) to proper scripts, offers and products. Target Identity Unknown: This gets tricky, as marketers will not be able to rely on historical transaction data, modeled personas or other personally identifiable information (PII)-type data. Luckily, many companies — along with their smart developers — have been working on such an “in-the-moment” type of personalization for some time now. In fact in practice, such reaction-oriented personalization should be the first to check off, if we look at this effort from the sequential framework. Simply, if you know what the shoppers are looking for, just usher them to right aisle. If the intention is not explicitly revealed, then we have to get into agile and real-time version of predictive modeling, with all available data up to that point (such as location, device, source, day-part, immediate browsing history, etc.). Obviously, there is no need for pre-built personas (or segments) or real-time modeling if the intention is clearly revealed (as in “I want a pair of men’s dress shoes, Size 10, black or dark brown”). The trouble is that such reactionary personalization is not the end of it, as marketers don’t always get to know what their customers are looking for. In the interest of “personalizing all messages through all channels all of the time,” we must look at other not-so-explicit data and make the most out of them using statistical modeling techniques. Even when “some” explicit data are available, personalized messages become far more colorful — and relevant — when used in conjunction with personas and segments. Because shoppers behave in contexts, not in isolation. Personalization is complicated, because it is all about human interaction. Even for seemingly one-way communication, such as email or mailing campaigns, marketers must consider the relevancy factor at all times. And such relevancy comes from the right context; which, in turn, comes from the combination of past and present views of the target individual. I introduced a new framework, as available data drastically change based on the stage of this personalization game. We should never look at it from the perspective of technical difficulty or complexity, as that type of mentality would lead us to the rudimentary methods (i.e., habitually resorting back to the default setting of a commercial personalization engine). And when you do that, you may end up personally annoying your customers, not really personalizing by staying relevant at all times. Lightening Up a Bit I don’t mean to scare every marketer, but there will be different outcomes for marketers who fully embrace personalization and those who don’t. A sense of urgency — leading to a firm commitment for serious personalization efforts — is exactly what is required today. Data and technology are at our disposal already, so commitment to connect dots between piles of data and recipients of messages will get marketers to the goal line. Besides, why do marketers worry so much about technical difficulties? That is the job for the techies and data geeks, isn’t it?

Data

Personalization Framework

Personalization

Stephen H. Yu

About

Subscriptions

Events

Publications

Personalization

WORK SMARTER - LEARN, GROW AND BE INSPIRED.

Subscribe today!

Stephen H. Yu