If you have been following a lot of the talk around personalization, you have no doubt heard that every retailer is expected to have a personalization program in place. The prevailing wisdom is that customers want to have personalization and that in order to capture the customer of today and tomorrow, a retailer and any business for that matter, needs personalization. But where to start? On the surface, personalization seems like a simple idea to implement but it is actually much nuanced. The right approach can help you get the results you want.
When a company ventures into the world of personalization, they can quickly find themselves spending a lot of money on technology they don’t need, mainly because they did not do the necessary homework, up front. Here some easy to follow steps to take so as not to fall into the traps of setting up a personalization program.
1. Start with Your Strategy:
Often when starting out on a personalization program, companies go out and talk to vendors or look at Amazon and decide that’s what they should do. This is a mistake. What Amazon does, works for Amazon and may not work for you. Also, the vendors are focused on the end point and not the full spectrum of what is personalization.
Before you ever talk to a vendor, sit down with your team and do some research around ways to develop personalization. Doing this exercise you can probably come up with at least a dozen ways. I’ve done this and have come up with 30 plus ways for some companies. The more touch points you have the more ways you can personalize. Really know your business and focus on what you can deliver to your customer base.
During this phase, I highly recommend you ignore the technology and focus on the customer experience and how improving that is going to help your business. By doing this exercise, you are reducing your chances of getting lost in the technology hype.
2. Focus on the Metrics:
Too often there are a lot of vanity stats thrown around and you will see people claiming “10 years of brand impressions in one month.” I don’t buy into vanity stats. They sound great sometimes and totally unbelievable at other times. Get to the metrics that mean something to the business like conversion rates. Impressions are nice but dollars are better. Showing how personalization is improving sales is really the one thing you need to show, everything else is just window dressing.
3. Psychology Before Technology
I have sat in meetings about personalization that went on for months while IT talked about all the new toys they wanted to play with around personalization. However, when asked about the customer experience or business strategy, they were lost. What was worse though is that when asked about how the technology would be perceived by customers, they couldn’t answer the question.
There is a ton of technology out there that can be seen by customers as invasive or creepy. That’s why the psychology of personalization needs to come before the technology. Really understand how that technology will impact the relationship with customers. You don’t want to find yourself as the latest example of a company trying to grab personal data from its own customers.
Putting psychology first means that you are essentially taking into account the needs and wants of the customer and developing your personalization experience to answer, “what’s in it for me” from the customer perspective. Most people get upset when companies use data about them without getting something back. But by creating a personalization program that gives the data back to customers in a way that delivers a better customer experience, it comes back to companies in the form of a better relationship with customers.
4. Understand what you will Do with the Data
Even if you are not a large company with millions of customers, odds are, once you implement a personalization program, you will have a lot of data, more than you probably think you will have. When I first started out on personalization, we added 20% to our biggest data forecast. That was way too small. Now, I thinking about, how much will this grow in 3 years and then I triple that number.
Once you see the data coming in, you will want to use it in ways you didn’t realize you could use it. And with tools like hadoop, you can do a lot! As a result, data that you normally got rid of because it was not that important after the transaction, now is important and being used by more teams for more reasons. These often are teams that look at the customer journey at a meta level. This often can be used to help understand patterns on a geographical level or even down to a store level in ways that were not available before. As a result, you need to think about where all this data is going to sit. Understanding privacy issues with the data you collect is important as well as, what data is really personal.
Self-identifying data is something you always want to keep in a data center behind a few firewalls. Other data you could store in the cloud if you wanted to. Of course the use of the cloud comes with positives and negatives so look into the vendors and what they offer in terms of how easy it is to get your data back.
5. Separate the Strategy from the Tools
One of the most common issues I see is that people confuse the strategy of personalization with the tools of personalization. The two most common tools are recommendations and email marketing. They are NOT personalization; they are just tools you use to express the strategy. By confusing the tools and the strategy, a company will always find itself lacking a well thought out strategy.
The tools alone are not going to get you a real personalization program. They will get you something that looks personal but really is just faking it. Recommendations alone are just that, recommendations. They can look personalized but they lack a lot of the information needed to get a true personalization experience, mainly knowing about the customer’s intent, how relevant the information is to the customer and if the timing of the search is important.
A recommendation engine alone doesn’t know why someone is searching for a product. Is it a gift, a curiosity, a real interest? The engines today are not able to tell you that. Same thing with email marketing, just putting someone’s name on an email with a product you want to sell them based on past transaction, isn’t personalized, it is a guess. Real personalization takes a lot more effort.
If you follow these five steps, you will be a lot further along them most of your competitors and able to give you customers an experience they will enjoy. Of course this is just the start, there is a lot more to personalization but this will get you going.
Byline: Edward Chenard is an expert in big data and personalization. If you would like to contact him, reach out to Edward@crosschannelprairie.com.