By Mark Simpson, Founder and President, Maxymiser
Personalization is not new, but its widespread popularity is. And like any other widely-adopted concept, personalization has elicited a number of conflicting definitions...and questions: What exactly is it? A certain set of tactics? A defined approach? A specific technology? Ask 10 different people this very question and you'll get at least five different responses.
Personalization is the act of using the data you know about individuals to create personal experiences, across any channel, online or off. That information can come from a personal interaction, CRM, online behavior, opt-in form entries, or any other means of gathering and/or storing user information. Personalization can be simple (e.g., based on one or two collected insights) or complex (e.g., based on multiple insights processed by detailed formulas and algorithms), as long as the end result is an enhanced individual customer experience. It can be applied to in-person experiences, email communications, online with each new visit...the options are really limitless.
The concept of offering customers a personal touch pre-dates the Internet though, going all the way back to the days when we did things the old-fashioned way: in-person. Think personal shoppers, personal banking, personal concierges...and even that friendly waitress who remembered your lunch order every Friday.
Because major Web pioneers like Amazon and Netflix have extended this type of experience to the online masses, many recent adopters of personalization assume it's limited to online methods, such as product recommendations ("customers who bought this, viewed that") and persona or segment-based content targeting. Personalization, however, is a broad concept that describes the individual experience, not the means or channel through which it is achieved.
This distinction is important, as it reminds online marketers that they shouldn't stop at just one personalization tactic. (The more personalization, the better!) Savvy online businesses are currently personalizing with these three primary techniques: segmentation and targeting, product recommendations, and one-to-one behavioral targeting. All other forms, of course, still apply as well.
Since the concept is evolving so quickly, here are two popular myths to beware of as you devise your personalization strategy for 2013. (Personalization will be more popular than ever in 2013, after all.):
Nowadays, online shoppers probably feel cheated if they shop a site that doesn't at least attempt to recommend a few complementary products (either during their visit or in a follow-up email). Because this form of personalization is so ubiquitous, what is actually a fairly rudimentary level of targeting is commonly mistaken for personalization as a whole. And while this feature it is a wonderful component of a larger personalization strategy it is ineffective as a standalone tactic. With the right solutions in place, a website can factor in more than 50 different visitor attributes for each individual visitor and use those to craft each visitor's experience; this capability alone allows a website to do a lot more than merely suggest a few products at the time of purchase.
In the not-too-distant past, manual rules-based targeting was the only means of achieving online personalization, but there's a limit to how acutely one can tailor a customer's experience this way, since the technology is only as good as the team and their spreadsheet.
Imagine, for example, you have identified 12 key visitor segments (e.g., time of day, browser type, repeat vs. new, and so forth). And that for every single visitor there are 50 different possible attributes to factor into the targeting rules (previous purchases, gender, click behavior, CRM data, etc.). Now imagine that each user has attributes that fit into a number of different segments. How would you even begin to start figuring out which experience or promotion to provide to a visitor at any given time? The answer is...you don't. It's virtually mathematically impossible to manually create precise personalized targets for each segment, let alone for each individual. And even if it were possible, we haven't even begun to discuss the need to factor in known consumer behaviors, such as the various stages consumers go through when making any kind of decision or purchase. And there are other behaviors that go well beyond any single site visit. To account for all of this at once and in real time, you'll need to apply predictive behavioral targeting, which is powered by complex modeling algorithms that learn and dynamically adjust over time to continuously optimize results for each individual.
Bottom line: manually targeting visitors and segmenting content will never result in 1-to-1 individual targeted experiences, and is therefore not personalization.
The Truth About and Future of Personalization
In the end, consumers are a mixed bag of personalities, demographics, geographies and psycho-graphics. Every specific piece of data you can gain about each of them-from search activity, purchases, click behavior, bounce rates, point of bounce, shopping cart activity, and the list goes on-can be used to create a personalized experience. Factor in their environment and how they have interacted with your brand in the past, and their individual profiles become even that much more complex.
All of this is why today online personalization tactics and technologies have to be much more sophisticated. With the continual evolution of tactics and the emergence of new technologies, personalization will continue revolutionizing the way we optimize the customer experience, and continue offering us vital keys to long-term brand engagement and loyalty.
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About the Author: A career-long evangelist of online businesses, Mark is the commercial founder of Maxymiser and introduced its revolutionary Conversion Management platform to the market in 2006. Prior to Maxymiser, Mark headed up online marketing and business development for Travelport, focusing in particular on the acquisition and integration of ebookers, Octopus Travel, Hotel Club and RatesToGo. Latterly Mark headed-up the Business Development, Search and PPC teams for Travelport. Mark was previously part of the team that launched Hitwise in the UK market.