Today’s customers demand personalization—and that’s not just a matter of personal opinion. According to a November 2012 survey by Accenture Interactive, 64% of U.S. and U.K. consumers would rather have companies present them with relevant offers than have them stop tracking their online activity. In fact, 74% of online consumers get frustrated when websites present them with irrelevant content, offers, ads, or promotions, according to the “2013 Online Personal Experience” study by Janrain and Harris Interactive.
However, 60% of marketers say personalizing messages based on consumer behavior remains a challenge, according to the July 2013 “Real-Time Marketing Insights Study” by the Direct Marketing Association and Neolane—now Adobe.
Perhaps one reason why marketers struggle with personalization is because every definition of personalization is, well, personal. “There are a lot of folks in the industry who use words like personalization and they massively misuse them,” says Erik Severinghaus, founder and CEO of Big Data platform SimpleRelevance. “When they do that, it waters down and, ultimately, pollutes the concept for everybody.”
Here are some of the ways today’s brands define personalization and what they consider to be too much.
I) “Personalization” for all
For Suja Juice, personalization is all about making the brand fit into its customers’ lifestyles, says Greg Fleishman, chief marketing and strategy officer of the cold-pressured organic juice brand. But even with about 30 different products across its portfolio, Suja can’t personalize every experience for every customer. So the brand focuses on fitting into consumers’ lives by addressing their needs, occasions, and motivations.
One way Suja leverages personalization is through its app. The Suja Juice app is a Spark Compass mobile marketing app developed by mobile marketing company Total Communicator Solutions Inc. The cloud-based Spark Compass platform uses a central CMS to produce and manage brand notices and personalized offers. For example, consumers can download the app to schedule a one-, three-, or five-day Suja Fresh Start cleansing program and receive notifications when it’s time to drink their next beverage. These notifications follow the need, occasion, motivation model in that they alert users that they need a beverage, during a cleanse, to stay healthy.
To ensure that consumers’ needs, occasions, and motivations are met at every stage—and at every place—of the customer journey, Suja also leverages geolocation through Gimbal, a context awareness platform by Qualcomm Retail Solutions. Gimbal enables the Spark Compass app to send consumers timely, relevant offers inside or outside of retailers that use Gimbal technology. Kevin Hunter, senior director of product management for Qualcomm Retail Solutions, describes how it works: Suja places Gimbal’s bluetooth Proximity beacons inside or outside of major retailers. These beacons allow Suja to interact with consumers via their iOS devices. For example, by placing beacons outside of a retailer, Suja can send push notifications to app users inside of a designated geofence. These notifications alert consumers that they’re near a Suja outlet and remind them of the last time they’ve cleansed. Likewise, Suja can place a beacon on a shelf inside of a retailer and push out recipes and coupons, which the brand is planning on implementing within the next few months.
The app, Fleishman says, allows Suja to communicate with engaged consumers in a contextually relevant way. For instance, the reminders can include recipes for consumers looking to break bad eating habits, prepare a nutritious holiday meal, or provide healthy Super Bowl snack alternatives, he explains. In addition, the app helps Suja stand out from competitors on the shelves.
“Beverage choices are typically made on need, occasion, and motivation—I want something healthy in the morning that makes me happy,” Fleishman says. “There’s just a sea of choices that are out there, and these apps make it much easier to find the right products that are right for you.”
The Suja Juice app launched in January 2014, so Fleishman says that it’s “too soon” to see a change in results.
II) Personalization for one
According to SimpleRelevance’s Severinghaus, Suja’s app isn’t personalization, it’s segmentation. Rather than leveraging personalization, Severinghaus says that Suja is “creating a segment on the fly”—people within a particular location—and engaging in “geo-targeted batch and blast.” He says this approach creates more complexity and, thus, more work for marketers who have to create and manage more segments.
“[Marketers] say they’re personalizing by dropping people into segments and sending everyone in the segment substantially the same communication,” he says. “Fundamentally, that’s a different concept than…personalization.”
Personalization, by Severinghaus’s definition, starts with the root of the word: person. In other words, what marketers know about an individual—such as who he is, what he does, what he says, and what his preferences are. Next is to build a model up to create a better experience for that specific individual. Media and marketing solutions company Gannett began to take this approach for its DealChicken service after Gannett’s VP and GM of social commerce Rajan Mohan received numerous sushi deals—even though he doesn’t like the cuisine.
“At some point I’ve given you, DealChicken, enough signals to indicate that I’m not a fan of sushi,” Mohan says. “That’s how we started to look at it. We also knew that we needed to start watching what consumers were doing on our site.”
Using SimpleRelevance, DealChicken looks at customers’ behavioral metrics for every 1,000 emails delivered, including what emails they open, what deals and categories (e.g., American restaurants) they click on, when they opened, and which deals they purchased. After setting aside a subset of deal spots for advertisers, DealChicken fills the remaining 23 to 24 spots with deals personalized to the individual, Mohan explains.
DealChicken uses testing to ensure that its personalization is effective. It has SimpleRelevance personalize content for 90% of its subscription base; it uses the remaining 10% as a control group. According to DealChicken’s January 2014 results, subscribers who receive the personalized content have about a 9% higher open rate, 7% higher click-through rate, and 16% higher revenue per delivered emails than the control.
“Consumers feel like we’re delivering better content,” Mohan says.
III) Personalization across channels
Personalization via email is effective, but 40% of consumers buy more from retailers who personalize across all channels, according to the 2013 “How Multichannel Personalization Impacts Shopper Attitudes and Buying Behavior” study by the e-tailing group and MyBuys Inc.
Janet Bava, manager of direct marketing and customer experience communications for cruise line Royal Caribbean International, says taking a multichannel approach to personalization is an extension of Royal Caribbean’s on-ship experience. “Part of our Gold Anchor Service is to understand our guests and know what their need is even before they’ve asked for it,” she says. “That level of personalization—that experience that happens onboard our ship—we want to extend that to guests even before they sail with us. It increases the positive perception of the brand…even after they come back from cruising.”
When it comes to collecting customer data, Bava says that Royal Caribbean errs on the conservative side. For instance, the brand collects information via surveys, email, and onsite click behavior, and information that cruisers offer voluntarily, such as through its loyalty program application. Royal Caribbean tends not to use third-party data. “We feel like an email address is personal space and your home is personal space,” she says. “Unless you raise your hand and say you want to hear from Royal Caribbean, we don’t market to you.”
Through this accumulation of data, Royal Caribbean leverages personalization in its direct mail, email, and online channels. With direct mail, Royal Caribbean will send multiple versions of the same offer. For example, a family who lives in Galveston, TX, will receive a direct mail piece about the onboard family features for cruises sailing out of Galveston, Bava explains. Email works relatively the same way; however, the brand also remarkets based on what consumers click on while on the website, as well as in the email. For instance, if a retiree indicates while on the site that he’s looking for a trip to the Bahamas, Royal Caribbean will send him related content. Bava says that Royal Caribbean will also include a customer’s first name in the subject line and that those emails tend to perform “very well.”
Royal Caribbean also factors in guests’ loyalty status and cruise frequency to track where they are in their cruise lifecycle. In terms of its loyalty program, Royal Caribbean has six tiers. Guests within the higher loyalty tiers tend to be more engaged with the brand, so they receive communications more frequently, featuring “behind-the-scenes” content. Contrastingly, guests who are new cruisers receive more informative content, such as what they can do when they’re on a cruise. In addition, those with a higher loyalty ranking receive higher levels of discounts than those in the lower tiers, she notes.
“Once they cruise with us…they’re invested in the brand,” Bava says, “they rebook and re-cruise more frequently.”
IV) Staying on target
Personalization can be effective for repurchase, but can backfire without the right data. For this reason, Andrea Black, associate director of marketing for members-only home décor flash-sale site Joss & Main, says that brands must make every effort to stay on top of consumers’ ever-evolving needs.
Joss & Main began personalizing its emails about six months ago. It decided to start with email, Black says, because that’s typically the first interaction consumers have with the company on a daily basis.
Every day, Joss & Main hosts limited-time exclusive sales or “events.” These events feature furniture and décor that is curated based on a particular theme, such as West Coast Glamour or Country Elegance. The brand then tracks how consumers engage, such as what events consumers click on both in the email and on the site, how much time they spend in each event, and how many product pages they’ve viewed in each event. When consumers visit the site, Joss & Main builds user profiles based on their interactions.
The company automatically re-sorts the events featured in members’ emails based on their profiles. And because all of its products and events are tagged, such as by style or aesthetic, Joss & Main is able to continue to show members what they’ve indicated they want to see. For instance, it places pet-related events in a more prominent position for members who are highly engaged with pet products, Black says. Joss & Main sees a 23% increase in users clicking on the event and visiting the site, as a result.
To ensure that it doesn’t promote products consumers may have already purchased, Joss & Main updates consumers’ profiles every time they engage with the brand. In addition, the brand doesn’t personalize based on products consumers are unlikely to re-engage with post-purchase, Black says. “You could be in the market for a sofa, but you’re not likely to purchase it more than once,” she explains. “So while we want to be aware that you’re in market for something like that, there’s a list of product classes where—even if you purchase in them—you’re still likely to re-engage with them.” For example, the company categorizes its styles into about 20 different groups—such as rustic, modern, or shabby chic—and then overlays those style categories with product-specific classes that consumers are likely to continuously re-engage with, such as kitchen, lighting, pet products, and jewelry, Black says.
Moissanite.com—a wholly owned subsidiary of jewelry provider Charles & Colvard—uses similar tactics to ensure that it keeps up with customers’ milestones. The brand uses cloud marketing platform provider SmartFocus to monitor consumers’ online behaviors.
By using an anonymous cookie, SmartFocus is able to track what products consumers click on, what they search for, how they navigate the site, and what items they put in their cart, says Neil Hamilton, director of personalization sales for SmartFocus. Based on this information Moissanite then serves up product recommendations. For example, if a consumer is searching for an engagement ring on the site, Moissanite will serve up other engagement rings that are similar in style or from the same collection. Or, if a consumer adds a Halo engagement ring to his shopping cart, Moissanite might recommend a pair of Halo earrings.
“When people come to us brand new, we’re looking to predict what products will most appeal to them and serve them up those selections earlier in the site interaction so that they don’t become paralyzed [and move] away from making a decision and still end up with a product they love,” says Christine Seib, ecommerce conversion manager for Moissanite.com.
In addition, the brand takes into account purchase information. So if a consumer purchases an engagement ring, Moissanite will shift gears and start serving up wedding rings, Hamilton says. “They’re not going to buy two engagement rings,” Seib says.
V) Personal issues
But how do marketers know how much personalization is too much? Dennis Dayman, chief privacy and security officer of marketing automation company Oracle Eloqua, says there are three things marketers need to keep in mind to avoid crossing the line.
First and foremost, patience is a virtue. Marketers often rush to get their campaigns out and follow up, Dayman says, but having a salesperson call a prospect immediately after he visits a site could scare him off. To help alleviate this Big Brother problem, Dayman advises marketers to create a calendar so they can build out campaigns, analyze results, and follow up with customers and prospects without seeming creepy.
Dayman also advises marketers to initially ask only for the information they need to connect with customers and prospects. As buyers make their way through the purchase funnel—and develop trust—marketers can ask for more data, he says.
Finally, Dayman encourages marketers to be honest with how they’re using customer data and to be reverent to customers’ permissions. “If you have to go share [that data] with a third party because it’s part of that process, let them know that and then see what happens,” Dayman says. “Maybe they’ll leave, maybe they won’t.”
Linear Air is one brand that exemplifies these best practices. Alanna Vallee, VP of marketing for Linear Air, says that the air taxi service company used to ask consumers for “everything that we could possibly dream of” as soon as they hit its website. But after realizing that this was turning people off, the marketing team decided to only ask consumers for their email address and ZIP Code.
Even with just this basic information, by working with Web personalization platform Evergage, Linear Air is now able create a more personalized experience—for instance, it might send a customer in New York an email about Boston-New York flight specials. Linear Air can also tie in more implicit signals, like online behavior. For example, the brand can gauge the purpose of a trip by looking at whether a consumer clicks on the “business” or “personal” sections of the site.
However, knowing how much personalization is too much is rarely black and white. For instance, Ryan Bonifacino, VP of digital strategy for jewelry retailer Alex and Ani, says that banner ads can be a gray area for marketers.
Alex and Ani retargets consumers dynamically and serves ads based on customer behavior, such as the last three items consumers viewed on its site, customer acquisition source, and first viewable impression, Bonifacino explains. However, he says, the brand only does this when a consumer is at the bottom of the funnel and there’s “statistical assurance” that she intends to purchase—such as if she responds to an abandoned shopping cart notification, picks up where she left off, and still doesn’t purchase.
“At that second stage, I’m going to take advantage of every opportunity that I have to retarget somebody who is all the way down at the bottom of the funnel,” he says. “I just think it’s a little creepy at the awareness level.”
For the most part, Alex and Ani’s banner ads don’t go past a jewelry collection level, Bonifacino says. For instance, if a visitor looks at a bangle featuring a New York Yankees charm, Alex and Ani will serve her an ad featuring several bangles from the brand’s entire Major League Baseball collection, he says. Similarly, the retailer avoids showing consumers bangles featuring their zodiac signs, birth stones, or initials. However, Alex and Ani’s research shows that people who wear charitable charms are susceptible to hyper-targeting or retargeting at the product level.
In fact, ads can be just as engaging as other forms of content and can actually enhance a user’s experience, asserts Keith Kaplan, head of global agency and client development for Yahoo. Kaplan says that Yahoo personalizes its ads and content based on users’ location, browsing behavior, and information voluntarily given during registration. And when done well, Yahoo sees 40% increases in ad receptivity, Kaplan says.
“It’s all about reaching people in the right place, at the right time, and with the right ad,” he says. “Advertisers will see the highest performance when an ad is in sync with the user’s interests and the overall context.”
But when in doubt, marketers should just use their human instincts.
“Marketers should ask themselves two questions: One, will it make sense to the customer that I know this about them? [And] two, would I want other companies doing this type of thing to my child, parents, or best friend?” says Jim Barrett, VP of marketing for members-only shopping site Rue La La. “It’s such hard work to find good customers. Why throw them away by crossing the line?”
So while marketers may not agree on what exactly personalization means, when it comes to setting the boundaries of how much is too much all marketers should abide by the marketing version of the Golden Rule: Market to others the way you’d like to be marketed to.