The Data Age

Big Data and Living in an Age of Data

The Data Age - Big Data and Living in an Age of Data

Personalization in Brazil

Next week I am headed off to Brazil to give a presentation on personalization. It will be my first time in Brazil and I am really looking forward to it for many reasons. Brazil is a market I have not had the chance to do business in directly for years. As a result I am curious to see how similar or different the market is to the US.

On May 8th, I will be speaking in Sao Paolo at the Ecommerce Brazil conference. I am presenting the topic of Personalization, Going Beyond the Technology. It is a presentation based on my own experiences with retailers, hospitality and financial services companies here in the US. All three industries are really looking to improve their personalization efforts. However, many companies within those industries fail to achieve their goals for the simple reason: They rely too much on IT and technology. My presentation is all about how to avoid those mistake and get to a really good personalization program that delivers results.

In the US, many companies often believe the personalization is about adding recommendations to their website or slapping someone’s name on a generic email. Often these tactics are confused for a personalization strategy. I can list over two dozen ways to implement personalization, most US companies rely on 2 or 3 ways, which means they often fall short on the promise of better service for customers. I am curios if in Brazil they have been able to leap frog these issues and learned from their US counterparts.

With Brazil being a growing market, I am interested to see how they are adopting ecommerce practices from other parts of the world as well as what solutions they have come up with on their own. I am really looking forward to not only sharing what I have learned but also learning how Brazilian companies are tackling the same issues but from their own perspective.

Conferences like these are ones I am very interested in because they are a great opportunity to share and learn. When I return, I will have another post that covers just what I did learn while in Brazil.

Taking Personalization beyond Tech

11919842-2804x1870

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.

Personalization, You are Doing it Wrong

Having worked on personalization projects over the course of 10 years, I have seen a general change in retail in towards personalization. Everyone wants more data and feels that they need data and machines to do personalization. This has lead a lot of customers to feel they are not being catered to and that personalization is more annoying than helpful. That’s because retailers are doing it all wrong.

When most retailers think personalization, they confuse recommendations and personalization. The reasons for that are a few. One, they look at Amazon and see these recommendations and read reports about how Amazon is making anywhere from 25-35% of sales from personalization (again, they confuse the two). Then the retailer wants to have the same thing, I mean, who wouldn’t. But that range has never been verified so it could be totally false. Now I do think Amazon makes a lot of money off of recommendations and I have built those systems myself and they do make a lot of money. But if you have stores, let us be real about your sales growth. Verified sales impact for a brick and click retailer is about 5-10% lift in revenue because recommendations are often only used online which is still a minority of sales for most bricks and clicks retailers.. That’s what you can expect too.

Most retailers, as I said before, confuse recommendations and personalization. Recommendations are just a tool set used to express your personalization strategy. They are not the same. Recommendations are great and varied. They can do all kinds of things but there are a dozen variations on recommendation theories and if you don’t know those theories, some vendor is going to have fun selling you a ton of stuff that will probably sit around and do nothing for you but will help pay for that vendors vacation home. Which leads me to my next issue.

Another problem is the most people don’t understand the basic theories of personalization. I see this a lot, you went and talked to a vendor who tells you that personalization is X and Y, that’s because that’s what they sell. X and Y tend to be some kind of technology stack that you can buy for a few million. But the issue is that personalization is not a technology issue, it’s a behavioral and customer experience issue rolled into one. Without a clear understanding of those issues, the technology is meaningless. It reminds me of my school days. When I was in school learning accounting, my prof made us do it all by hand. Even though computers would do all that work. She said if you don’t know the formulas, you won’t know when the computer is wrong. Same thing holds true for personalization, if you don’t know the basic theories behind the technology, you won’t know when it is wrong. Of course the vendors don’t really want you to know this because if you did, you could do a lot of this yourself and then they lose money.

Finally, when a company takes a technology only approach to personalization, they end up with personalization bubble. What happens is, you end up with this hammer called technology and all problems are nails. With this hammer you try to hammer in all the nails. And you demand more data! More data is always the answer. You start to see the work as a data problem that are suppose to fit certain models and business rules. People are rather interesting creatures that tend not to follow models. So you get frustrated and demand more data! Then your experience becomes a filter bubble. You’ve captured all the data on a customer that you legally can (no need to go NSA on your customers) and you find you don’t actually know them at all. That’s because most data still lacks intent. And people don’t always want a totally personalized experience because when you do that, you remove surprise and delight. People still like to be surprised and delighted with new experiences.

Personalization is a concept that is very simple yet much nuanced. Taking the time to understand what drives personalization, will save an organization a lot of time and effort.

 

Byline: Edward Chenard is an expert in big data and personalization. If you would like to contact him, reach out to Edward@crosschannelprairie.com.

Personalization is About Listening to Customers

I guess I am a big picky about what really should be called personalization.  Like the word marketing, it is applied to areas that it really is not a natural application to.  Personalization is about listening to customers and really giving customers what they want.

 

Too often companies think that throwing someone’s name on to an email with a canned message is personalization.  It’s not.  Nor is it really personalization to just serve up your best margin products as product recommendations and try to convince everyone that you are really just trying to help people pick out what is best for them.

 

If you want personalization to work, you have to listen to customers and give them what they want.  That is really the only way to see the 3 times increase in sales that personalization can deliver.  Anything else will mean you get far less.

Personalization, the next big thing?

Since I handle personalization projects at work, I have been reading many articles about 2012 and what will be big.  On many of those lists, personalization comes up as a topic and area to watch.  What these articles often do leave out is what really personalization is.

 

Personalization is one of those topics which sounds simple, until you actually get into the details.  Is it product recommendations, the ability to customize your viewing experience, is it a service experience that is unique to you, or is it something else entirely?  The answer is, it’s all of them.  And that’s where it gets complicated.  What is personal means something different to everyone.  For some, they like products to be recommended, but for others, they want that one-to-one service that is just like having your own personal concierge.  So designing a personalization experience can be very complex.

 

For me, personalization is about delivering a shopping experience that creates the feeling of a personal relationship between the customer and the organization.  How that is created, really comes down to understanding your customer.  This is where I think many pundits get it wrong.  All too often, when I am reading these articles about personalization, they focus on the technology aspects.  And people always up hold Amazon as the example.  To be quite honest, Amazon’s personalization experience is a bit weak.  I’m not saying it is bad but there is a lot of room for improvement and those at Amazon who are honest about it, will agree.  And I know they are working on filling in those gaps.

 

I always start with the consumer in mind first and foremost, not the technology.  Find the need or pain point and then work back to the technology.  Too often, I see companies who find a technology and try to shoehorn it in to being the solution, when in reality, it is not.

 

So will personalization be one of the big things for 2012?  That depends on the strategy companies take.  It is not all about the technology.  Technology plays a big part, but it is not the main part or the even the first part to getting it right.