First, let me assure you that this isn’t going to be one of those ‘personalisation is the next big thing in marketing’ posts. By now, you’ve probably read the articles, facilitated the brainstorm and put together that slide on personalisation in your last marketing strategy.
Every marketer and business leader in 2016 is aware of the opportunity which personalisation presents to organisations looking to counteract the fragmented media and advertising landscape and maintain relevancy in the face of ‘generation adblock’.
All too often, however, CRM data cleanliness, nervousness around privacy and a lack of investment in ‘closing the loop’ on customer data management and reporting leads to personalisation efforts stalling after the inclusion of a customer’s name in the subject line of an email.
The challenge facing marketers doesn’t lie in the belief that personalisation could work for them but the means with which they can effectively and ethically execute a personalisation agenda.
In this post, I’ll explore the three main challenges facing marketers when it comes to personalisation.
The intersection between data tech, governance and personalisation
Technology, governance and access to data often go hand-in-hand. However, a recent Econsultancy report paints a telling picture of the state of investment in data resources, technology and personalisation efforts.
The late 2015 study found that;
- Most companies either have no formal approach whatsoever to using data in marketing programmes (23%) or are working towards a strategic approach, but haven’t arrived at one yet (51%). Only 26% of responding organisations have a solid data-driven marketing strategy in place.
- Less than a fifth (19%) indicate they have technology and processes designed to predict the needs and behaviours of customers and prospects.
- Two in five (41%) report that marketing takes a back seat to IT/tech groups in managing its data, with 45% suggesting that marketing can’t make decisions on new technology investments.
- A third (34%) of responding companies rely on individuals/teams separately managing point solutions and delivering insights to a central repository. At the other end of the spectrum, only 13% are using cloud-based technology that includes solutions across marketing goals.
With findings like these, it’s no wonder marketers are struggling to make sustained strategic efforts in personalising marketing and customer experience. The limited or fragmented access to data technology, as well as the broader question of strategic alignment around the value and ownership of data within an organisation points to a failure on the part of business leaders to invest in and resource for appropriate data governance.
It may sound obvious but access to an accurate database which records both explicit and implicit customer data is key for marketers looking to move beyond the 101 of personalising based on name, geography and gender alone. A misspelt first name or retargeting of a product a customer has already bought is counterproductive and can be more damaging than a neutral/ mass audience approach.
You can read more about the role of data governance and its role in unlocking the value of organizational data in this recent post from the team.
Access to valuable data
Even for those marketers who’ve nailed CRM and other data tech integrations and have a ‘single pane view’ of customer behavior, data is still a challenge.
All too often, this data-lead view of a customer is limited to their behavior when interacting with an organisation’s own channels whether that be via website, email, app, social media or in-store loyalty card use.
Just as personalisation shouldn’t be constrained to demographic information – not every teenage girl loves the Kardashians and not all 45-year-old males are AFL footy fans – it also suffers when marketers fail to think beyond the 1% of the time a customer spends with a brand.
- What other brands do they love?
- Where have they travelled to recently?
- Where do they look for news and entertainment?
15 years ago, this type of context and customer insight was predicated on expensive and (often inaccurate) focus groups or market research.
With the decreasing cost of data storage and computing power, the liquidity of and potential access to data is giving marketers the opportunity to return a more human and one-to-one understanding of customers – similar to the way we used to interact with local shopkeepers.
The caveat to this burgeoning access to data is as follows:
- The shopkeeper could easily and quickly verify the truth of any information or data on customers
- The shopkeeper had an established and trusted relationship with the customer and any information exchange occurred under this pretext
Marketers accessing or licensing third-party data must keep customer privacy, consumer law and their own data security top-of-mind or they risk both the loss of customers and failure to achieve ROI through investment in poor data.
Traditionally the required level of governance and security around the exchange of data for enriched customer insights either wasn’t adhered to – which represented a major risk to both organisations and consumers – or it required lengthy, complex and expensive agreements.
It was the challenges associated with navigating secure and fair data exchanges that lead our team to invent Data Republic’s multi-lateral legal framework and technology platform which enables companies, governments and not-for-profits to safely and securely exchange data to enrich customer insights. With all customer personal information or P.I removed from data on the platform and with all exchanges strictly governed on legal and ethical bases – we solve both the access challenge and manage risk around customer data enrichment.
Access to valuable data leads me to the final key consideration for marketers when executing personalisation – the ethical and legal bases by which they collect and apply customer insights.
Customer privacy and the importance of delivering utility
It’s important to note that access to data isn’t everything.
As Jeff Goldblum’s so eloquently put it to the mad founder of Jurassic Park;
“You were so preoccupied with whether or not you could, you didn’t stop and think if you should.”
Every marketer has heard of the famous Target example back in 2012 where an algorithm predicted a pregnancy and triggered Target coupons and promotional materials to be sent to a home before the pregnancy was announced by the mother. The sophisticated propensity model developed using Target’s own CRM loyalty data caused quite the stir, striking equal measures of fear and envy into the hearts of many a CMO starting to use data to personalise offers.
Target had proven that their approach to personalisation through data had unprecedented accuracy but to what end? Customers felt alienated and issues surrounding privacy were called into question. The antitheses of what a marketer would hope to achieve through personalisation.
An important thing to note here is that Target obeyed all consumer privacy laws in the US and were only utilising data which they had been authorised by their customers to collect.
The data itself wasn’t the issue (frequency of purchasing lotion and cotton swabs), the issue was the ethically questionable application of that data to try and predict pregnancy – one of the biggest moments and events in a person’s life – in order to send them coupons.
The offer (or utility) was woefully out of balance with the value of that information or the trust typically required to gain it. Nor was the customer given the opportunity to signal intent or stop personalisation by being asked “We noticed you were buying lotion, are you interested in receiving offers for prams and nappies? Yes or no”.
Would the uproar have been the same had the woman been offered 50% off her preferred cosmetic line because she had spent X amount in-store the previous month?
Or if a bank had offered a special discounted rate because behavior signaled that a customer was looking to switch banks after many years?
The lesson here is that marketers cannot operate in a data-driven vacuum where all that matters is the data and the offer. Any collection, use or exchange of customer data must meet both consumer privacy law and the ethical expectations of the customer.
For trust to be maintained, customers must gain value or utility from personalised exchanges and the terms of organizational data collection and use must be made transparent.
Concluding thoughts
Marketers, leaders and consumers currently stand at a critical juncture with digital technology, access to data and IoT (Internet of Things) disruption changing the way we conduct business and interact with society as a whole. At the end of the day, however, data-driven personalisation cannot be treated as an intrusive arms-race for customer surveillance. Data alone can’t account for better customer service, value and utility – to have customer rights respected and their loyalty rewarded. We’ve all been talking about personalisation since the early 2000s – it’s high time we started delivering ethical and effective personalisation for our customers.