Better Personalization: Level Up Your Customer Experience

We all want our daily relationships and interactions to be personalized on some level. This is relatively straightforward when it comes to face-to-face contact: I know the name of my barista, my dog walker, etc. I know the basic details about their lives, such as where they live, when and where they go on vacation. Why? Because this allows me to personalize my interactions with them and likely, improve our continuous relationship. I call them by their name and allude to the basic context of their lives when I interact with them. It’s crucial that those interactions exist to support our social contract as acquaintances. When that connection breaks—I forget my barista’s name, or where the dog walker lives, I’ve dropped the ball. It can be awkward and even hurtful to those you spend your time interacting with when you improperly identify them/their lives. So how can you ensure this level of accuracy when attempting to reach potentially hundreds of thousands of people across the world, with a pool of data supposedly related to their activities and targeting? Personalization is a battlefield where many businesses struggle to succeed.

Before we get any further into the details, it’s important to establish a definition of personalization. Let’s start by referencing the dictionary. Here is the definition from the American Heritage Dictionary (my personal favorite):

per·son·al·ize (pûrsə-nə-līz)

    • To render personal rather than impersonal or purely professional: personalized the doctor-patient relationship.
    • To make or alter so as to meet individual needs, inclinations, or specifications: personalize a drug regimen; personalize emails to potential customers.
    • To have printed, engraved, or monogrammed with one’s name or initials: personalized the bath towels.
    • To take (a general remark or characterization) in a personal manner.
    • To attribute human or personal qualities to; personify: “songs from the fifties and sixties that personalized automobiles by giving them names” (Christopher Hitchens).

One of the reasons I like the American Heritage Dictionary so much is how they break down the word and give clear concise examples. The above examples I gave apply to the first definition, which is largely human to human.

How Industry Experts Define Personalization

This gets much more complicated when you start to look at the second definition with regards to companies or brands. Brands have relationships with millions of consumers. This means to personalize interactions, a scalable solution is required. So while the definition doesn’t change significantly in the dictionary, it would be useful to look at more industry-focused definition:

Personalization is a process that creates a relevant, individualized interaction between two parties designed to enhance the experience of the recipient. It uses insight based on the recipient’s personal data, as well as behavioral data about the actions of similar individuals, to deliver an experience to meet specific needs and preferences.

I’m going a step further: I classify personalization into three levels.

The First Level of Personalization

The first level is when a business is able to identify your name and put you into a segment. So all communications between you and brand have a basic level of personalization. There are many successful use cases that can leverage this model, all of which focus on having a specific need that is concrete and addressable by single product:

  • Businesses and Brands offering a highly specific product where the key business driver is initial conversion. I’d put most consumer durables in this category: cars, appliances, furniture, etc. This technique of personalization keeps the brand front of mind throughout the discovery and consideration process.
  • Mass-market lead generation efforts based on demographics where the key business driver is initial conversion. This use case is largely based around consumers home address and the selling services for the home and personal finances such as: car insurance, utilities, home care
  • Content Subscriptions sending customers regular updates. This use case is focused on keep subscribers up to date on content. Many content subscription services also start off with this model, reminders of the basic service offered can be delivered through this tech

Where this level of personalization one falls short is that its solely dependent on a slice of data and has a limited ability to evolve.

Here are some basic problems that can  arise:

  • The brand is pushing a  product or service that is irrelevant to you such as a warranty extension on a car you no longer own.
  • The brand is pushing a product you already bought, such as an appliance sale from a retailer you just bought that appliance from at a higher price
  • The brand is continuing to push a service when your needs have naturally and predictably evolved, such as puppy kindergarten classes for your 5-year-old dog or toddler for your 7-year-old.

What does this look like? Here’s a great example:

By misjudging the persona targeting of the new puppy owner, the experience in-person for their pitbull exclusion did not match the owner’s digital experience, which resulted in a painful brand defection coupled with a powerful social media response. This could have significant repercussions for the brand. By building a seamless digital personalization approach, it’s likely this owner would not have received this offering and could still be a valued customer for another type of training program.

The Second Level of Personalization

The second level looks a little deeper into your consumer behavior and does basic retargeting. This allows vendors to capture your evolving needs and continue to target what is relevant. This solution does a great job of addressing the first pain point with level one since all products and services are based on the consumer’s recent behavior. Here are some examples:

  • eCommerce brands where the key business driver is conversion. This use case is largely based around keeping products of interest in front of mind by sending emails (abandon cart) and retargeting through ads on the web.
  • Travel and Hospitality where the key driver is maximizing share of wallet. This use case is selling additional services around products that have already been purchased, such as seat upgrade, welcome packages, etc.
  • Software and Content platforms where the key driver is engagement. This use case is encouraging users to further explore the offering based on past behavior such as finish watching this show or here are some other Slack channels that might be of interest to you.

Unfortunately, level two personalization still experiences the second two weaknesses described above. This is because it is focused on micro-moments and not taking into account the full story of consumer behavior and needs.

The Third Level of Personalization

The third level of personalization helps address this by looking at the entire journey the customer and therefore is able to anticipate the needs of consumers and focus on personalizing the entire experience across every touchpoint. Additionally, this allows brands and companies to properly channel their resources to the customers that will provide the most value. Here are some examples:

  • Consumer Packaged Goods vendors targeting babies and in some cases pets where the key driver is maximizing share of wallet. Target famously used purchase history to identify pregnant women so their behavior could be influenced before the child was born. This led to greater spend after the child was born. Many vendors at this level will change their product recommendations over time to anticipate the child’s needs based on his or her age.
  • Online Services businesses where the key business driver is engagement, such monthly summaries of behavior with personalized recommendations. Nest sends a monthly email summarizing behavior, comparing customers to their peers and makes a recommendation based on their location and past behavior.
  • Consumer Packaged Goods vendors targeting home and bath items with the key driver of maximizing share of wallet, such as subscribe and save from eCommerce vendors.
  • Amazon provides integrated purchase history into their platform so users can easily see their past purchases while browsing additionally they encourage users to subscribe to items at a regular frequency.

It’s important to note the difference between these last two levels of personalization. Where one takes basic interactions and uses triggers to initiate communication based on a particular behavior using if-then logic, the more advanced level of personalization takes the context of every previous interaction into account as much as possible. It’s the difference between a personalized campaign and a true customer journey that lasts throughout the customer lifecycle. This type of personalization can create lifetime customers and value throughout your business.

Why level up your personalized experience?

Better personalization is a long way from being only about including someone’s name at the top of an email. While businesses get value by simply knowing someone’s basic information and segmenting them, that is no longer enough to deliver customer excellence.

If you’re interested in building a better, truly personalized customer experience, there are several resources that you’ll find particularly helpful. The first is our Guide to Real-Time Interaction Management, which walks you through the ways you can navigate customer interactions with powerful real-time decisioning.

If you’ve already created some level of personalization, then the next step for you would be to attend Kitewheel’s upcoming webinar on March 6th: Marrying Personalization with Real-time Decisioning. This is a tactical walkthrough of how you can personalize your brand experiences in real-time. I hope to see you there.