I came across a Gartner prediction last week that gave me pause: by 2025, 80% of marketers will abandon personalization efforts. By way of justification, the analyst quoted points to challenges of data collection, integration, and protection.
As headlines go, it’s a clickbait-worthy winner. But insightful commentary on how marketing is evolving?
While the challenges involved are undeniable, it would be difficult for me to disagree any more strongly than I do. To my mind, such a prediction is at worst cynical and at best the result of a misconception about what personalization really means.
To unpack this prediction, let’s start by clarifying what personalization is and how it works. Then we can evaluate where we are and where we might be in five years.
Personalization is an approach, not a technology tool. There’s little argument that we live in an experience economy. In both our personal and our professional lives, we’re more motivated to spend our money based on experiences than the innate characteristics of a product or service. Creating those experiences, and getting them consistently right, goes far, far beyond the scope of any one technology or platform. The starting point is to define what “good” customer experiences look like, then make delivering them part of everything from company culture to performance metrics.
Personalization is not limited to marketing. When done well, it’s an integral part of all customer interactions. Personalization influences more than delivering targeted ads or addressing an email to someone by name. It also means getting their name right when they call customer service, remembering their purchases, and understanding their intentions. Personalization is at least as important for sales and service as it is for marketing. Regardless of the context, personalization has four key components:
- Addressing the individual
- Inferring and anticipating their needs—aka customer understanding
- Testing that understanding
- Remembering—across the whole organization
Oh, and doing it all over again, every time. This is a continuous exercise, not a one-off.
We’re still trying to translate face-to-face personalization into digital channels. A whole lot of what’s perceived as personalization in face-to-face interactions (and phone conversations) is a combination of treating individuals with respect and empathy, making inferences based on their tone or behavior, listening to what they’re saying (and what they’re not), and testing understanding by asking a question or two. All of that informs what action we take in the moment. As social animals, this comes naturally to us. It is in many ways a form of unconscious competence. Yet we are still very much in the process of building the same ability to observe, identify, infer, and—most importantly—test understanding through digital channels. Although these capabilities are improving rapidly, we still have a long way to go. There will undoubtedly be some pretty egregious examples of getting it wrong along the way, but we’ll get better by thinking carefully about the outcomes and experiences we’re trying to create and—you guessed it—continuing to experiment until we get it right. If I come across a shortcut, I’ll let you know. Tough to find with a moving target.
Plus ça change, plus c’est la même chose. The principles of personalization are as old as commerce. They’re the fundamentals that don’t change but must be reinterpreted each time we find new ways of buying and selling. Although knowing those fundamentals may be easy, applying them well can be extremely challenging. And that points to another big issue with personalization—or at least the term itself: we are very willing to be distracted by the ‘next big thing’ when the fundamentals themselves prove difficult or frustrating. I’d argue that personalization is and will continue to be a core tenant of good customer experience regardless of what else changes. Plenty of technology tools will wax and wane over the next few years. Some will fall by the wayside. There will undoubtedly be new categories that emerge with promises to improve our ability to deliver good customer experiences. Let’s be clear though—moving on to new tools and labels isn’t the same as abandoning personalization, even if it makes us feel like we’re making greater progress.
So where will personalization be five years from now? It’s a pretty safe bet that progress will continue to be uneven. The companies that seem to be doing the best so far—and the ones that will likely continue to be in the lead—are the ones that concentrate on the big questions. They understand the fundamentals and continuously ask themselves what they’re trying to achieve and why. Those north stars help to focus all the other priorities and trade-off decisions along the way. They also make it much easier to determine where technology can help and which tools are most appropriate. The impact of AI in particular will lead to significant improvements in capability, especially in addressing issues of scale and speed, over the next five years. At the same time, much progress will be the result of critical thinking, fine tuning, and incremental improvements in closing the gap between what customers expect and the actions companies take.
No one said personalization—effective personalization—was easy. (If anyone does, ignore them. They don’t know what they’re talking about.) Abandon it, however, and you might as well give up and go home.
Image: Snowflake cookies, a shameless homage to the festive season and tasty allusion to ways we think of customers. Source: TasteofHome.com
