Imagine you’re shopping at one of your favorite clothing stores. As soon as you walk into the store, you notice that your favorite category, button-down shirts, is right up front. Within the button-down shirts display, you find that your favorite brands and colors are front and center. Within seconds you’ve found a few different items you want to try on. As you continue to move through the store, you keep finding items you’re interested in without having to wander too far or dig through racks of merchandise.
The only conclusion that you can draw from this experience is that the store has been tailored personally to your tastes and needs. This sounds impossible, and of course, in the physical world it is impossible to arrange a store to meet the needs of each individual person. In the digital world, however, any site — from any industry — can offer this kind of tailored experience.
Infosys found that 74% of customers feel frustrated when website content is not personalized, while Forrester reports that 77% of consumers have chosen, recommended, or paid more for a brand that provides a personalized service or experience. Research like this shows us that consumers are coming to expect personalized experiences from all companies they interact with.
This should make sense to all of us because, as consumers, we have all experienced the benefits of a personalized digital experience. Have you ever spent more time watching videos on YouTube than you expected because the platform kept suggesting interesting content to you? Or have you used Amazon’s recommendations to help you find relevant products among its massive selection of products? Personalization shows us that companies who know and understand us earn our loyalty.
In the very near future, providing a personalized experience won’t just be a nice-to-have or a competitive advantage, it will be a necessity for companies in all industries.
How It Works
The notion that personalization will soon be a must-have may sound ominous, but I don’t think I’m saying anything that marketers don’t already know. For many years I’ve heard marketers talk about their desire to communicate at the one-to-one level with their customers and prospects. The problem isn’t that they don’t want to personalize; it’s that doing so requires sophisticated technology that has not existed in the past. To deliver personalized experiences across channels, you need to be able to:
Track and interpret in-depth behavior
With a powerful personalization platform, all of this data can be analyzed to uncover a person’s affinities (the categories, brands, keywords, authors, etc. that they prefer) as well as his in-the-moment intent.
Pull in other relevant data
Forrester has found that, on average, marketers have customer data stored across 15 different locations in their organizations. As a result, getting a complete picture of an individual will often require pulling in data from outside sources such as a CRM, DMP, data warehouse or email marketing platform. A personalization solution needs to be able to integrate with other solutions in the tech stack in order to pass, pull and push data between systems.
All of that data needs to be collected, analyzed, and acted on in real time. In other words, in less than 20 milliseconds. Otherwise, data collected in a session won’t be used until a person returns in a later session. He may not ever return to the site, and if he does, that information may be outdated.
Machine learning capabilities
Machine learning is at the heart of any individualized experience. It allows you to utilize algorithms to determine and deliver one-to-one interactions across a person’s digital experience. Anything from recommending products, categories, brands and offers, to dynamically modifying site navigation, search results, and list sorting is possible with machine learning. Marketers also have to be able to play around with machine-learning algorithms, testing and tweaking them to deliver the most effective individualized experience possible.
Customers don’t just interact with a company in one channel. That means that to deliver effective personalization, you must be able to collect data across channels and use it to make decisions about what experience to deliver in each channel…and then deliver it. This means all digital channels such as web, mobile web, mobile app, email, adtech, as well as all “human channels” including call centers, chat, in-store and in-branch.
Analytics and attribution
Finally, effective analytics are critical to any personalization strategy. Marketers need to be able to measure the results of each campaign they run to calculate the ROI of their efforts, as well as continue to iterate and optimize their experiences. That requires the ability to run effective A/B tests with a control experience, measure the impact on multiple different metrics to understand true impact, as well as filter results for different audience segments to get into the nitty gritty of campaign performance.
In the early 1990s, Don Peppers and Martha Rogers, Ph.D., foresaw a world of one-to-one personalization in their seminal book, The One to One Future. But the type of individualized experiences across channels I’ve described were simply not achievable with the existing technology at that time. With the machine learning, real-time processing and big data capabilities we have access to today, the one-to-one dream is finally a reality. There’s no excuse not to take advantage of it.
As technology constantly evolves, the world of personalization keeps changing too. Going forward, marketers will be able to bring together more and more data to better understand their prospects and customers and deliver even more precise personalized experiences across channels. I encourage you to take the next steps with your organization today. Become the champion of amazing experiences and great personalized customer engagement in your organization. By doing so, you’ll deliver significant incremental revenue to your business.
To discover more about one-to-one personalization, how it’s evolved and what the future entails, download a free digital copy of my new book, One-to-One Personalization in the Age of Machine Learning.
Karl Wirth is the CEO and Co-founder of Evergage. He is also the co-author of One-to-One Personalization in the Age of Machine Learning, a book described by customer experience luminaries Don Peppers and Martha Rogers, Ph.D., as “a down-to-earth, eminently practical how-to guide.” Prior to Evergage, Karl Wirth spent 10 years as a product and marketing innovator at several companies including RSA Security and Red Hat.
Editor’s note: This column first published January 8, 2018.