Not long ago, your bank manager knew your name. The butcher knew the cuts of meat you liked, and the High Street travel agent knew where your family enjoyed a holiday. Today’s businesses are trying to recreate that intimacy and empathy in their digital channels so they can better connect, serve, and sell to their customers. The problem is, the techniques and tools businesses are using to improve digital personalization have originated in the wrong place.
The old way – optimizing content with segments and batches
Most tools used have a heritage in content optimization. That is, they are designed to test and deploy variants of the web experience with the goal of optimizing specific metrics like bounce rates, click-through, or conversion. Different page layouts are tried. Alternative images and text are tested against each other. Through an experiment-and-learn approach, poor design and unappealing content can be eradicated to create a more compelling experience.
One big step in personalization was to develop tools that could apply different content based on the type of visitor. For example, with behavioral segmentation you could present individually-optimized experiences based on the visitor’s persona – which significantly improved the digital experience.
However, marketers that rely on behavioral segmentation will eventually hit a roadblock – because it’s difficult to further personalize an experience with segments when most of the essential customer context for the current situation lies outside of the digital channel.
To overcome this roadblock, marketers’ attempts to inject customer insight into digital channels have tended to rely on co-opting batch campaign engines to produce “leads.” But this approach doesn’t create better personalization either. Batch applications were designed for bulk outbound “spamming” and are poorly suited for the digital world. For example, they will be slow to pick up on the fact that the customer was in a retail shop this morning with a complaint.
The challenges marketers need to address
Content optimizations, even when targeted at customer segments and personas, can never be true personalization. Trying to make this work results in five personalization challenges that marketers need to overcome:
1. Relevancy: There is no point working out the best message variant and presentation for a customer if that message is not relevant to them.
The tools that are very good at targeting the right content at a customer to get the highest click-rate do not necessarily generate content that is right for your visitor. By focusing on content variations, you ignore the bigger issue – relevancy.
It is far more important to get the most relevant message in front of your customer, than it is to find the “perfect” variation of an irrelevant message.
2. Timeliness: There is no point delivering relevant messages if the timing is wrong.
You may be running lots of offline analytics to understand your customers’ next likely need or purchase – but this analysis is delayed, and there’s a big lag processing and loading the insights that you need to engage into your channels. Customers are now moving faster than the speed at which you can understand what they might need – their journeys happen across channels in real time, and are often over before you even can blink.
Customer relevancy is not confined to a channel and can change quickly.
3. Consistency: You will undo your good work of being timely and relevant if you can’t be consistent in your next actions.
You may have placed the right message in front of your customer, and they have responded – but you’ll undo that good work if you can’t maintain that conversation consistently across your other channels. Nudging the customer along their journey requires a response that is consistent everywhere you engage customers, and the intelligence gained needs to be shared with your other channels and paid media – fast.
Outbound and paid channels often live in their own world, largely oblivious to the customer’s current state, or what’s happening on inbound – just as digital channels are oblivious to the outbound messages being sent out the door.
4. Segmentation: You may optimize your messages for each segment, but your customer is not a segment.
Much of digital targeting relies on segmenting visitors. Customers are assigned personas, which are then associated with segments that are shaped by your views on what you think your customers ought to be doing. For every segment there is a message you want to deliver. However, your organization’s personalization strategy may often exceeds its capability to define and build all the segments required to produce the fine-grained targeting you desire.
Worse, customers rarely fit neatly into those segments - their behavior may deviate markedly from the “average” defined by the segment.
Your customers are not neatly defined by segments. Their intents, contexts, and needs are individual.
5. Optimization: You may achieve better click-throughs and checkouts with optimization, but are you actually increasing customer value? Revenue? Profitability?
The actions you’re trying to influence may happen days, maybe weeks, in the future. For example, what you really want is to retain a customer at end of contract, or for them to draw down a loan, or activate their SIM card, or purchase a flight upgrade. But optimizing in-channel KPI may not be the best way to make that happen.
You need to be capturing true business successes and relating them to the decisions you make in the digital channel. Personalization should then be driven by predictions as to what content will result in the best business outcomes.
These challenges result in much of your valuable digital real estate being populated with content that is irrelevant, untimely, and incoherent - ultimately driving the wrong behaviors. You end up focused on pushing product, dominated by segmentation-based thinking, and driven by convenient (but unhelpful) metrics.
The relentless pursuit of increasing click-throughs and checkouts will mask deeper problems in customer experience. If you are not consciously driving and measuring experiences to directly manage both, you may be reducing customer value and harming retention rates, instead of setting yourself up for longer-term, more sustainable success.
Steps to take to improve digital personalization
Problems will persist while the culture of the organization sees digital personalization as an issue for the digital channels, and where metrics are only focussed on the performance of these channels. To provide true digital personalization, a new approach is needed. To conquer these personalization challenges, marketers should take the following steps:
- Do not personalize “in channel.” Relevancy is not always visible there. Decisions about how to engage with a customer should be delegated to a centralized decision authority that has a full view of the customer across all channels, inbound and outbound, and all customer journeys. Channel consistency is only guaranteed by it being informed by your central “customer brain.”
- Make decisions in real time. Relying on batch processes and feeds cannot deliver timeliness. Current contextual data adds rocket fuel to your knowledge of the customer.
- Abandon segments and use automated machine learning at scale. Use your interactions with customers to automatically build predictive models as to how they behave. Personalize on a one-to-one basis using these models, taking into account the specific real-time situation, context, and history of each individual customer.
- Select the best experiences based on individual predictions of the best expected business outcome. Abandon the product push mindset and forget clicks and checkouts. Focus on the predicted value of the interaction and how this digital session helps reach overall goals for the customer and the organization.
ABOUT THE AUTHOR: Dr. Andy Lewis, a principal solutions consultant for AI and decisioning, is changing the world for the better through real-time, contextual, AI-driven next-best-action conversations.