Read between the lines of the Goldilocks fairy tale and you’ll find a very picky customer. She doesn’t want her porridge too hot or too cold. She wants it just right. Similarly, she doesn’t want her bed too hard or too soft. She wants it somewhere in between.
Consumers today adopt a similar stance when it comes to personalization, the practice of marketing to individual customers. While they want a personalized shopping experience, they don’t want it too personalized, according to an Accenture study. This means marketers must walk a tightrope for personalization—using just enough personal data to engage customers, but not enough to turn them off.
In fact, a new word has entered the online advertising lexicon as a result of over-personalization tactics — creepy. This occurs, for example, when a company responds too quickly or inappropriately to consumers, such as sending emails in response to a consumer’s recent online search.
Yet even with the moderation caveat, personalized marketing is on the rise and consumers are appreciating it—when they see the value in it for themselves. In 2014, a study conducted by predictive marketing company AgilOne found that 79 percent of U.S. consumers expect some sort of personalization from brands.
The results also indicate that while consumers appreciate, and even expect brands to personalize their buying experience, different demographic groups have different personalization preferences. For example, 61 percent of U.S. shoppers age 25 to 34 appreciate welcome campaigns for new customers, but only 39 percent of consumers age 65 and over felt this way.
What all consumers do not want are personalization attempts that get it wrong. Take, for instance, a Target promotion. Based on consumers’ online shopping histories, the company sent baby-related coupons to high school-aged girls. But the majority of the girls had not yet informed their parents about their pregnancies.
The Accenture study found that when it comes to personalized online experiences, consumers had specific likes and dislikes:
Considering these findings, marketers could logically be asking: Is personalization even working? VentureBeat conducted a study to determine the value of reaching out to customers as unique individuals. It found that personalized website content drove up page views for one company 300 percent and 219 percent for another company.
A survey conducted by Econsultancy asked respondents whether personalization had resulted in an uplift in conversion rates. The results showed that each channel achieved positive results from personalization. Nearly 32 percent of companies reported a “major uplift” in conversion rates in their search engine marketing (SEM), more than any other channel. Interestingly, 95 percent of companies said there was some kind of uplift in conversions when personalizing offline channels as well, more than website (93 percent), SEM (92 percent), or email (90 percent).
Beyond the numbers, it’s not hard to understand the power of personalized marketing. At a time when customers value tailored experiences, personalization is not just a nice-to-have option, but also a must-have marketing strategy. Marketers just have to find the right balance.
Before embarking on a personalization strategy, it would be wise to consider consumers’ preferences and expectations around the practice to hit the just-right sweet spot. Here are a few key tips for not crossing the line into the creepy personalization zone—and for winning over your target audiences rather than turning them off.
What lies at the heart of the creep factor is the surprise consumers feel when their personal information shared in one context pops up unexpectedly in a different context, according to The Futures Company, a consumer research firm. Consumers are taken off guard by the unexpected and unwelcome leakage of their personal data from one social context to another.
The antidote to this problem is to have conversations with consumers, says Wired magazine.
“Remember that the most important lesson from social media marketing is that today’s marketing cannot be a one-way street. It must be conversational, a back-and-forth between company and customer. The same principle applies to data-driven targeted marketing. Yes, as big data marketing tools improve, companies will have greater insight into their customers’ desires and behaviors, and increasingly intrusive technology touch points for interacting with those customers. But customers do not want to be surprised by such technology. They want to be informed, and they want to be empowered.”
It’s not just marketing that is crossing the line into consumers’ comfort zones. Their personal data is being sought and compromised in other areas as well, such as banking. What’s more, it’s reasonable to assume that the potential uses of their personal data have not yet been fully explored by companies in every sector, making a tenuous situation today potentially even worse in the future.
Before customers’ attitudes harden around the use of their personal data in other new ways, “companies need to start thinking about how to redress that balance,” according to The Futures, which suggests the following ways:
It’s all about being transparent and building consumer trust. Eighty percent of consumers willingly provide personal information to a trusted brand, according to a data and privacy study by consumer analytics company SDL. But they expect the brand to be transparent about its intentions—including which data it’s collecting, why and how that information can help them. If consumers see value in it, they’ll willingly participate.
Listen carefully for customers’ feedback when venturing into personalization territory. “If you’re really listening, your customers will tell you exactly how your organization’s marketing is performing,” advises John Timmerman from big data company Teradata.
In general, customers are aware that companies are tracking their behaviors, and are OK with that reality if it improves their shopping experience. But they don’t want to be reminded of it every time they open their browsers and find ads tracking their every move. Use technology tools available to keep tabs on their comments, such as complaints on your site or social media, or a complete disconnection from your company.
If you’re not sure how your target audience feels about a campaign, ask them with a survey or questionnaire. When you have accurate, balanced feedback from consumers, you can adjust goals and strategies.
Loyalty programs appear to be an open platform for mass personalization. But tread lightly here, too. While 94 percent of loyalty program members want to receive communications from the programs in which they participate, only 53 percent of those members find the communications they receive to actually be personalized and relevant to them, according to a national loyalty study by Maritz Loyalty Marketing.
“Allow customers to help with that by providing the opportunity for them to customize their interactions with you, either by creating personalized interaction defaults, or in how they set up and manage a loyalty account,” says media analytics firm BurrellesLuce.
An example is The New York Times website. It allows users to view recommendations for articles based on their recently viewed articles and the sections they view most. It’s a way for members to not only track their own usage, but also feel that the Times is pointing the way toward tailored content.
Personalization is a new frontier for companies — ripe with opportunity and risks. However, companies can gain the most from this emerging discipline when they make a concerted effort to give consumers the personalization they want without the creepiness they don’t want. In other words, not too little or too much, but just the right amount of personalization.