Personalisation isn’t dead, it’s misunderstood

We often hear this overarching narrative that marketing is binary, one or the other, mutually exclusive. When in reality it’s about striking the right balance of tactics and aligning departments to the philosophy of ‘customer first’.
September 13, 2022
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  • minutes to read

There are a lot of cheap shots fired at personalisation — as though it’s just another buzzword.

We often hear this overarching narrative that marketing is binary, one or the other, mutually exclusive. When in reality it’s about striking the right balance of tactics and aligning departments to the philosophy of ‘customer first’.

Strategically, we need to understand that personalisation is an organisation-wide practice and a mindset. Tactically, personalisation can exist alongside performance, and data can enable creative.

Those who disagree — simply do not understand. They are likely lacking practical experience and they’re sitting on the sidelines. There, we said it.

With this smoke comes a great deal of fire so, let's dive in a little deeper.

What is Personalisation?

At its core, personalisation is a practice and an organisational mindset, not just an important capability for marketing.

Personalisation is the alignment of Marketing, Digital/Product, Sales/Service, Data and Technology departments and is activated through the art (and science) of harnessing data and technology to tailor experiences that increase engagement, influence conversion and ultimately, create customer intimacy.

The problem is Personalisation is primarily used in two contexts.

  1. A tactical lever to pull to improve experiences across channels
  2. A way to describe a culture, mindset, and holistic customer-first business strategy

The first focuses on short-term results that are a means to an end. To hit a KPI, achieve a target, and deliver an impressive presentation on the value of personalised tactics.

The second is a longer-term focus to adopt a customer-first mindset. This context focuses on long-term commercial value delivered incrementally, in line with changing customer expectations. When an organisation adopts a holistic, customer-first business strategy at the level of culture and mindset, the race for competitive advantage becomes less important. This is because the value exchange is designed for, and with the customer at the core, resulting in customer loyalty, intimacy, and retention.

Neither use is incorrect, as they both deliver value — however, the problem is in the failure of delivery.

Organisations often expect the Netflix, Spotify, and Amazon approach to whole business customer centricity, purely through pulling a short-term lever.

That short-term lever can be crucial to kicking off any a personalised marketing program of work, as it supports the unlocking of a business cases and key resources required to holistically transform an organisation. However, this is where growth stagnates. Becoming trapped in the continuous cycle of tactical short-term wins without ever harnessing the latent opportunity a personalisation mindset can provide.

Aligning the Personalisation opportunity to organisational maturity

Performance, media, and advertising are tactics to deliver tailored experiences to consumers and drive positive brand sentiment or experiences. But you need the data to provide direction of specific activations (for example., how to segment audiences or how to guide creative messaging).

Few are jumping out of bed each morning with excitement to tackle the implementation of “business as usual” activities, but laying the groundwork across people, process, data, and technology is key to realising any sort of transformation.

We love the notion that during our time on the clock in any role, we’ll be able to attribute a highly innovative shiny idea back to our teams.

Achieving “personalisation at scale” has been that shiny soundbite referenced in conferences and inspiring otherwise bored teams from the monotony of daily foundational, but important groundwork.

We must learn to walk before we can run. It’s those that try to run first who give personalisation a bad name.

A brand getting Personalisation right

When done well, personalisation is an organisation wide exercise. Netflix provides us with a leading example, famously achieving worldwide success of its original series “Orange is the New Black” through identifying patterns in customer segmentation for viewership across similar shows such as “Weeds.”

They achieved this through not only aligning similar genres, but by enriching their data with custom tags offering descriptions from set locations, character ethnicities, use of profanity, demographics, generations, sexual orientations, niche sub-genres, and more. The data collected not only fuels the personalisation engine to encourage continued viewing; it allows Netflix to truly understand and design a franken-production that is the unique collection of the most popular traits and interests of its viewers. As a result, Orange is the New Black achieved 20 Emmy nominations, four wins, and 105 million viewers.

Coordinating the alignment of data and insights to production, scripting, talent acquisition (finding and then securing the right actors and actresses) and then marketing for the role would be no easy feat, yet the payoff from using data to intimately understand the audience and refine the value proposition in market.

Netflix is an organisation that knows that data is the new black. Using data is at the heart of Netflix’s organisation-wide strategy, fuelled by the practice of personalisation. Netflix focuses on intimately understanding their customers, guiding a strategy that delivers real value and then staying the course until that value is realised and customers’ needs are being met.

Common personalisation pitfalls

Personalisation is hard; but losing a customer hits harder. In today’s world, consumers don’t just expect personalisation — they demand it. Two years ago, 80% of consumers were more likely to purchase from a brand that provides a personalised experience and over 60% of consumers would stop interacting with brands that provided poor personalisation tactics.

Consumers understand the value exchange of data for a more relevant, personalised experience and are willing to share.

To state the obvious — it costs less to keep a customer than it does to attract a new one, and the more skilful an organisation is with applying data to grow engagement and intimacy, the greater the lifetime return.

It’s not comprehensive or useful to halo examples of best practice without offering a rulebook for what not to do. So here are a few pitfalls we envision businesses may fall into.

1. Personalisation is the responsibility of one team

True Personalisation demands an organisational-wide approach and requires cross-functional collaboration. A seamless, connected customer experience relies on alignment across Marketing, Data, Digital, Tech and Governance to drive growth.

2. It’s not all or nothing, one or the other

All too often in Industry media, we see Performance Marketing and Personalised Marketing face off. It is possible to make the case for broad brand messaging and contextual targeting. Both can (and indeed must) exist alongside a targeting approach that finesses the right messages at the right time, in the right channel tweaked and aligned to customer needs.

3. It’s not evil

The changing state of data privacy has peaked the anxiety of marketers everywhere who have relied on a business first, growth hack marketing method. Those who act first for their customers don’t see data collection or targeting as evil; they see it as a privilege to connect the missing links of information customers need to help them make their best decision.

4. Believing personalisation is intrusive and not welcome

Many brands offer the ability for consumers to opt in /opt out of personalised content. 71% of consumers expect companies to deliver personalised interactions. And seventy-six percent get frustrated when this doesn’t happen. Consumers choose relevance.

5. It’s changing but it’s not going away

The data landscape has been changing for quite some time. If you’ve found yourself with your head in the sand and haven’t established practices around acquiring first party data and customer preference information, you’re probably right to feel anxious. Data volumes won’t be what they used to be but that doesn’t mean to say they won’t be of quality. It’s all about the methodology used on the path from unknown to known.

6. It’s still worth the investment

Changes in the underlying data structures that are needed to fuel personalisation, will leave many with a need to diversify their marketing strategies. In many cases, start “re-testing” new methods. Whatever those methods may be, losing visibility over much of our digital data is reigniting appetites to diversify with greater risk. To our first point, this is likely why we’re seeing many short-sighted marketers go directly back to more traditional “spray and pray” marketing methods.

Effective personalisation will not only require the investment in data structures but in people to construct experiences that leave customers feeling so positive, they become loyal or better yet, advocates. Weighing up this risk is like playing the short or the long game but it’s the choice of acting “business first” or “customer first” and now is the time to choose an ideology.

These personalisation pitfalls are examples of an attempt at personalisation without the groundwork and should not be used as examples to illustrate a point that “personalisation is a farce.”

Personalisation isn’t dead, it’s misunderstood

Personalisation is not a shiny soundbite. It’s an organisation-wide practice of giving customers their power back and sit in the driver’s seat of creating their own experiences. Through engaging in meaningful conversation, true customer connection creates space to understand the missing links of information needed to help our customers take their next aligned action.

Tactically, Personalisation shouldn’t need to face off against performance or play second fiddle to the importance of brand and creative strategy. It would do us well to reframe our label from “personalisation strategy” to “personalisation promise;” a simple word replacement that reminds us of who we are here to serve.

The value of modern marketing is decided through delivering experiences that are both world class to the consumer and deliver value to the business. As a practise, Personalisation is crucial in achieving that goal.

As also seen in Mi-3 Australia here.

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Written by
  • Kate Cook
  • Head of Analytics at The Lumery
  • Darshana Patel
  • Customer Strategy Lead
Personalisation isn’t dead, it’s misunderstood
We often hear this overarching narrative that marketing is binary, one or the other, mutually exclusive. When in reality it’s about striking the right balance of tactics and aligning departments to the philosophy of ‘customer first’.