Strategy•Jan 22, 2020
3 Principles of Personalization: How to Personalize the Customer Experience Without Being Creepy
Personalized marketing campaigns have been around for years. Today’s consumers are offended when they receive a generic email with little relevance to them. Imagine receiving an ad promoting a retirement community when you just turned 21. In fact, 74% of consumers are frustrated when website content isn’t personalized to a degree.
Basic personalization is easy for companies to implement and has high returns. According to Forrester, 89% of digital businesses are investing in personalization, and another recent study indicated that the overall market could benefit almost $3 trillion dollars from companies implementing digital strategies to personalize the customer experience. That’s why we receive birthday promotions, tailored recommendations on Netflix, and banner ads for online stores we frequent.
The Personalization Paradox
However, with such a big business impact at stake, companies might be taking personalization too far. How about a push notification for a coupon to a store you just walked past or receiving an ad for a product your roommate was talking about earlier? Personalization at this level can be downright creepy. In fact, 75% of consumers find most forms of personalization at least somewhat creepy, with most consumers noting that location tracking is the most invasive approach to marketing, according to a recent study. This is what Salesforce is calling the personalization paradox: when consumers expect personalization but are also creeped out by it.
Tackling the personalization paradox is daunting, but there are three key characteristics we see in consumers’ expectations of marketers that help us understand what they want—but more importantly what they don’t. Consumers do not want violations to their privacy, a lack of control over the messaging they receive, or irrelevant marketing.
Marketers can respond to these characteristics by adhering to three principles of personalization:
Transparency: Be transparent with how and why you are using consumer data.
Control: Involve the consumer in the personalization process.
Relevance: Provide value with every consumer touchpoint through relevant advertising.
By implementing personalized marketing that follows these principles, brands can build a trusting relationship with consumers, a tactic that not only increases value for the brands themselves, but also for the consumers.
1. Transparency: Be Transparent With How and Why You Are Using Consumer Data
Consumers are becoming increasingly tech savvy, and they know their data is being leveraged by just about every major website, brand, search engine, and social media platform for targeting and marketing purposes. The Facebook scandal in 2018 opened consumers’ eyes to just how much data are being collected and used. Facebook responded to the scandal saying that users’ privacy settings were set to allow this collection, but their inability to be transparent about what this setting meant caused immense backlash. Companies can avoid these kinds of issues by being extremely clear with the meaning of their data collection/usage policies and informing consumers often about how it applies to them. This ensures that companies are being transparent about the what and the why.
A recent white paper published by Credera, titled “Using Customer Data to Deliver Better Customer Experiences,” points out that a mutual exchange of value occurs when companies are transparent about collecting data. A recent study also points out that 83% of consumers are willing to share their data if transparency exists, including the option for the customer to opt-out of data sharing agreements.
An excellent example of transparency in data collection is Google, whose privacy statement is not only upfront, but also user friendly and digestible.
2. Control: Involve Consumers in the Personalization Process
Consumers expect to be able to contribute to their personalized experience. They want to see personalized recommendations to make the purchasing process smoother and frictionless. By giving consumers control over that messaging, they feel heard and empowered! With the advent of more stringent consumer data privacy protection laws like California Consumer Privacy Act (CCPA), consumers have control over how their data is being used more than ever before, which augments the idea that consumer preferences are driving key decisions in the market. For companies, this means they should hear the pleas for control and offer it wherever possible.
Use a Preference Center
A common way to involve consumers in the personalization process and give them control is by using preference centers. These are essentially online portals that capture preferred channels of communication, message frequency, and other interests that contribute to tailored marketing communication. Preference centers are easy ways to begin the personalization process by asking consumers a few simple questions, like how often they want to receive newsletters or if they prefer text messages over email, and then applying that feedback.
A more unconventional example of bringing consumers into the decision-making process is DoggyLoot, an online pet product retailer that filters the contents of their website according to the size of your dog. Dog owners know that products designed for a Lab are very different than those designed for a Yorkie. Allowing the consumers to provide the information up front puts the control of personalization back in their hands, and the subsequent personalized emails (based on the dog’s birthday) saw a 750% higher click-through rate than their standard campaign email.
Create Two-Way Digital Dialogues
Another way of involving consumers in the personalization process is to create ongoing, two-way digital dialogues that resemble real conversations that consumers have with sales representatives, a tactic that Stitch Fix does rather successfully. This subscription clothing delivery service sends consumers a unique box of new clothes every month based on their answers to a detailed style quiz. But here’s the thing: the clothes aren’t chosen by an algorithm, but by a personal stylist who handpicks each and every item. They have essentially created a digital conversation between an expert and the consumer, providing personalized choices that make the consumer feel heard and special.
3. Relevance: Provide Value Through Relevant Advertising
The third way to practice optimized personalization is to add value for consumers through providing relevant ads. If consumers see a beneficial return from their collected data, they are more likely to receive it in a positive way. Examples of delivering value include tailored recommendations that lead to easier purchasing, providing exclusive access to deals and new releases, and offering rewards for loyalty.
Sephora brought home first place on SailThru’s Retail Personalization Index by utilizing cross-channel communication, its Beauty Insider loyalty program, and a virtual try-on feature to “test” makeup. The Beauty Insider loyalty program provides rewards for repeat consumers and collects data on consumers through their online profile. This data helps Sephora understand the market for certain products and allows them to specifically target those individuals. Sephora can also personalize consumers’ marketing promotions based on previous purchases and by delivering reminder emails to repurchase or to find something else similar. This creates value for consumers because they are not only getting a personalized product recommendation, but also discounts for future purchases. Sephora gets value because they can generate more sales with the personalized recommendations.
A recent study found that 91% of consumers are more likely to shop with brands who remember them and their purchase history, which in turn helps provide relevant offers and recommendations. This is because with the plethora of information available to consumers, efficiency and immediacy are almost necessary. Having access to and the ability to act upon consumer data will increase the chance that the marketing communications are relevant and add value.
How Credera Can Help
Implementing personalization while walking the fine line between helpful and harmful can be daunting. Credera’s history helping brands personalize the consumer experience speaks to our ability to guide companies down the path to personalization done right. Companies who apply personalization correctly show powerful results and their consumers feel respected, included, and more inclined to purchase. This is because the brands are transparent, give the consumer control, and provide value through relevancy.
At Credera, we recently helped a popular jewelry brand reap the benefits of personalization done right. Working together, we created a seamless user experience across marketing and ecommerce pages by emphasizing analytics and engagement tracking. This provided them with increased visibility into their consumer activities, which gave them deeper insight into who their consumers were, how they responded to promotions, and what they purchased. By adhering to the guidelines of personalization laid out in this post, this jeweler was able to better provide their consumers with personalized marketing messages.
Knowledge is power for personalization, and the implementation of this knowledge is crucial to provide consumers with transparency, control, and relevancy. Want to learn more about how to implement personalized consumer experiences to better serve your consumers? Reach out to us at firstname.lastname@example.org to speak with a personalization expert.