Every day, digital managers are barraged with a single idea: Personalization is the number-one priority of modern marketing. In a certain sense, of course, this is true. Thirty-five percent of Amazon’s revenue is generated by its recommendation engine, which matches users with products similar to previous purchases (VentureBeat), and 75% of Netflix users select films based on Netflix’s recommendations, which are based on interests users reveal when they first start using the site (Gigaom).
But can personalization go too far? Can personalization be too personal? The short answer is yes—it can. It’s possible for customized content and offers to segue into overly familiar communication that actually hurts the B2C relationship. (A famous coffee company is one of my go-to examples for this, as I explain below.) Add to this the confusion many companies feel about customers’ wants and needs, as well as the fact in some industries people stay anonymous until the point of purchase, and some companies would rather not personalize at all instead of risking personalizing wrong.
Decaf Soy Latte With an Extra Personalization Shot (And Cream)
Take Starbucks for example, a coffeehouse many Americans have patronized at least once. Starbucks gives each customer a personalized experience through its baristas, who ask everyone for his or her first name, write that name on a cup of coffee, and then yell that name across the store at the top of their lungs when the order is ready.
For some people, this personal touch is fine; it tells them when to go get their coffee. For others, it's a deeply embarrassing experience—even without the inherent potential for misspellings and mispronunciations. And customers who find it embarrassing may take their money to a different coffeehouse, which would negatively impact public brand opinion (and, of course, revenue). For that reason, I consider Starbucks’ personalization efforts relatively flawed and clumsy.
Given these high stakes, it’s no wonder marketers might fear personalization. But don’t let the stakes intimidate you into not personalizing! The key is finding the happy medium between no familiarity and overfamiliarity. Here’s my advice for achieving that.
First, strike a balance between being tentative and tactical. With 88% of online customers less likely to return to a site after a bad experience (Dynatrace), it’s clear you can’t afford to deliver a poorly personalized experience. The key, then, is to start slow. Run simple optimization tests to collect data that can inform more complex tests in the future. (And if you need a little help knowing when to run an A/B or multivariate test, check out our webinar on this very topic by Oracle’s Maxymiser technical trainer Trudi Miller, Ph.D.)
Use these tests to gain more knowledge about how customers interact with your brand—their goals, needs, and preferences. This will help you develop well-informed audience segments, which you can leverage to deploy more thoughtfully personalized experiences. (We also dive deep into segmentation in a previous blog post; check it out here.)
Second, accept the fact that personalization isn’t just about messaging, promotions, and products. It’s about the entire customer journey, which your business can impact in real time by delivering well-researched, properly segmented experiences based on how people interact with your website (or mobile site or application).
Go Forth and Personalize
Some companies personalize too much and risk customer relationships and brand reputation, while others are paralyzed into inaction by the idea they may personalize poorly or incorrectly. Successful companies find the middle ground between ‘not personal’ and ‘too personal’ to create a sustainable B2C relationship.
Don’t be afraid to personalize! Start testing to improve the viability and value of all your personalization initiatives.