Improve Your Personalization Strategy by Making it Purposeful

Personalization — it’s a buzzword, alright. And for the past couple of years, marketers have been obsessed with it. According to SmarterHQ, 51% of digital marketers say personalization is their number-one priority, and 92% of marketers have reported using personalization techniques. 

And it works, of course: The vast majority of consumers are more likely to shop with brands that provide offers and recommendations that are relevant to them, and 80% of consumers are more likely to make a purchase from a brand that provides personalized experiences.

Why, then, did Gartner predict that by 2025, 80% of marketers will abandon personalization efforts?

Is There Long-Term ROI?

The theory is that without adequate customer data, getting personalization right is impossible, and the ROI won’t be significant enough to make it worth your while. And getting the right data isn’t as easy as it used to be. Over the past few years, new data privacy regulations such as GDPR in Europe and the CPPA in California have raised awareness of the dangers of providing personal data. The requirement to acknowledge privacy notices and click “accept” on consent popups is creating anxiety among consumers, while failing to effectively educate consumers about their rights. It’s also making it difficult for organizations to collect and store customer data, because the financial and reputational risk of violating those regulations is high.

Not only that, fraud is increasing. Nearly every day we hear about data breaches or identity theft. Phishing scams are commonplace, and even our political elections are getting hijacked by hackers. People are confronted with multi-factor authentication upon signing into almost any account, and they’re fully aware of the security risk. 

And consumers — particularly Millennials, the largest group of consumers today — trust brands less than ever. They don’t care about celebrity endorsements, and they trust recommendations from friends and others more than what a brand tells them.

But the biggest hurdle to achieving ROI from personalization over the long-term could be the growing tendency to over-personalize — to tailor every interaction to the max with extremely specific data points. AI-powered tools and advanced marketing automations systems are making this possible, but overwhelming consumers with hyper-personalized messages, emails, offers and experiences can get a bit creepy, feeding consumers’ anxiety and creating more distrust and skepticism. There’s a fine path to tread between making consumers feel important and understood, and making them feel like “Big Brother” is stalking them. 

With data privacy issues mounting, consumer skepticism growing and marketers sometimes overstepping their boundaries, personalization is indeed likely headed toward a dead end as Gartner predicts — unless we take a step back and rethink how we’re doing it. 

Personalization Must Have Purpose 

Personalization for the sake of personalization won’t help you accomplish your goals for creating tailored, meaningful experiences. A free offer created to capitalize on a customer’s past purchasing behavior may drive another sale, but will it help the customer truly connect with your brand? Serving up a cool ad with oddly specific details about your prospect may pique their interest, but will it help them trust you or cause them to disengage?

Infusing your personalization efforts with purpose requires a solid understanding of what your customers value about connecting with your brand. Tuning into customer feedback across review sites and social channels — and analyzing what you find — provides this critical insight.

My work at Reputation.com has helped me understand the impact of customer feedback, and I’ve seen organizations improve experiences just by analyzing it for insights and taking action on what they discover. Consumers are more than willing to tell you what they think about your brand and your products, and they’re doing it all the time. If you’re not reading reviews and engaging on social channels, you’re missing out on a lot of user-generated content — information that they willingly give you — that can be used to inform your choices about what interactions you personalize and how you personalize them. You’ll get much closer to meeting your customer’s expectations, and that will build their trust rather than break it down.

Say you have 12 data points about a particular customer — including what they purchased in the past. But in a review, they mention that an item they were looking for was out of stock, so they settled for something else. Wouldn’t it make more sense to structure an ad around the item they originally wanted rather than what they purchased? 

Having this critical understanding about what customers appreciate or even dislike about your brand is golden, because it helps you tailor your messages to what they expect from your brand. This is a powerful and cost-effective approach that eliminates guesswork and improves marketing efficiency. AI-driven personalization alone can’t accomplish this; human intervention is required.

To Boost the ROI of Personalization, Flip it on its Head 

Instead of using every data point you have about your customers to hyper-personalize your interactions automatically, first develop a data-driven understanding of your customers, then carefully and thoughtfully select the right information to apply to your personalization strategy. Don’t rely on technology alone — listen to and understand your customers, and make it a personal endeavor to personalize your interactions with them. The payoff will be well worth it.