Given that we just passed ‘Back to the Future’ Day on October 21, 2015—the day in Back to the Future 2 that Marty McFly and Doc Brown traveled to—today’s topic is particularly apropos. Much like Marty and Doc traveling from the past, the resurgent focus on customer experience (CX) and personalization, particularly real-time personalization, is, at its core, the combination of traditional marketing best practices of the past with the tools and techniques available to the modern-day marketer.
Years before the ‘always on’ customer revolution fueled by smartphones, Web 2.0 and Amazon, most marketing was both personal AND real time. Think of the neighborhood grocer, the pharmacist or even the local bank branch teller. These people knew their customers, understood their needs, recognized context and delivered tailored products, services or messages at the right time. They didn’t produce messaging for mass distribution; they tailored based on what they knew about their individual customers.
So why should you care about this history lesson in personalization?
Because it shows not only where we’ve been, but also where we’re headed.
First, let’s talk definitions to ensure that the nuance of personalization vs. customization is understood. Mass customization has been used as a marketing strategy in varying forms for years. Originally this term described the still-evolving trend in manufacturing whereby manufacturers partially cede ownership of the product design process to consumers—think Dell and computers or Adidas and athletic shoes—and, in turn, those consumers reveal preferences in the process of designing products to fit their unique needs or wants.
When applied to marketing, a parallel can be drawn when the consumer is allowed to specify one or more elements of his or her marketing mix such as preferred channel, contact number or content via a web portal, email data capture page or other response channel. In both the manufacturing and marketing context, a critical concept is segmentation, or how many choices (or the level of customization) you will allow your customers to make.
Personalization, on the other hand, keeps the onus to determine the appropriate marketing mix (including channel and call to action) on your brand. Segmentation is still a critical component of the overall process, but instead of segmentation being a limit because of complexity or cost, the goal is to maximize the number of segments, ultimately to a segment of one. In practice, the number of segments is limited only by your ability to manage the required data, content, CX and overarching technological complexity.
Today, some companies—many in retail and ecommerce—have overcome this complexity and are now deploying communication customized in real time. The inherent value of applying real-time personalization techniques is demonstrated not only by a luxury brands’ cachet, but also ecommerce’s ongoing disruption of traditional retail. From Louis Vuitton’s singular focus on a customer’s in-store experience to support the brand message of globetrotting luxury to Amazon’s visionary mission to become the ‘Earth’s most consumer-centric company,’ personalization in real time is the tactic that supports the strategy.
The time has come to embrace real-time personalization as a foundational marketing practice to communicate with consumers. Many industries are managing this complexity and because of that experience, your customers expect intelligent, real-time interactions. In 2015, it is within capacity to successfully deploy real-time personalization. The challenge becomes where to start, and just as importantly, how to maintain momentum while waiting for those first wins.
This post is not the place to provide a comprehensive deployment approach for real-time personalization, so instead I will leave you with a framework in which to consider your readiness to successfully deploy such a strategy. At the core of any personalization effort is data curation. Recall from the definition of personalization that your brand retains the responsibility to deliver the customized message to your customer. At a minimum, you must have a unified repository for first-party data on your customers. The addition of partner or third-party data becomes critical, especially if you have minimal products, transactions or customer tenure from which to draw insights. Additionally, site, device or even telemetric data can be critical depending on the specific product offer or content.
The second component is platform. The burden of legacy systems and the challenge of migrating to new technologies tend to stifle many efforts at real-time personalization. Instead of succumbing to these challenges, consider a channel-focused real-time personalization pilot to prove the efficacy of the approach. By deploying the right data and content in real time, you can make a quick win to show your stakeholders and help maintain momentum for the larger effort.
Finally, the organizational challenges of adopting real-time personalization should not be underestimated. Product marketing and competing customer ownership do not integrate well with a data-driven, real-time personalization approach. Customer ownership should be at the highest level within your organization and product strategies need to be informed by customer insight.
With that, I hope that this post has provided at least a fraction of a gigawatt of insight as to how you can successfully combine an approach from the past with capabilities of the present and future to acquire new and deepen existing customer relationships. Your future depends on it.