It's almost an article of faith among marketers that delivering personalized content and experiences to customers and potential buyers will improve business results. The value of personalization has gone largely unquestioned for nearly two decades. Most marketers now view personalization as essential for success, and many companies are on a mission to improve their personalization capabilities.
This strong belief in the power of personalization is easy to understand. There are now dozens of surveys showing that most consumers and business buyers want and expect to receive messages, offers and other content that are personalized based on their wants and needs.
But while support for personalization in marketing is widespread, it isn't unanimous. Earlier this year, Peter Weinberg and Jon Lombardo wrote an article for Marketing Week calling personalization "the worst idea in the marketing industry."
Weinberg and Lombardo base their case against personalization on two points. First, they argue that it's impossible to consistently produce effective personalization because the data used to fuel personalization is often inaccurate. They are particularly critical of third-party data, writing that, "Most third-party data is, to put it politely, garbage."
The second argument against personalization is that it wouldn't work even if marketers had accurate data about every customer and potential buyer. Weinberg and Lombardo write, "Arguably, there has never been a successful piece of personalized creative in human history. The biggest movies, books, songs and ads all speak to universal experiences that resonate with everyone, everywhere."
According to Weinberg and Lombardo, marketers would be better served by investing in performance branding, which the authors define as using "one-size-fits-most" marketing content that "speaks to the common category needs of all potential buyers, all the time."
The Four Critical Questions
In my view, Weinberg and Lombardo go way too far when they assert that personalization is "the worst idea in the marketing industry." The research clearly shows that when personalization is used under the right circumstances and in the right ways, it will boost marketing performance. But as with most business tools, the key to being successful with personalization is understanding when and how to use it.
The first important thing to recognize is that personalization isn't a single, monolithic marketing technique. It's a term that encompasses a wide variety of use cases that differ in significant ways. They have different business objectives and different data requirements, and they can demand different human and technological capabilities. Therefore, you need to assess each potential use of personalization as a discrete marketing project.
When you're evaluating any potential use of personalization, there are four critical questions you need to answer.
"Do we have enough accurate data to successfully implement this use of personalization?"
No proposed use of personalization will be successful if you don't have relevant and accurate data. Unfortunately, personalization efforts often miss their mark because of inadequate or inaccurate data. In a survey of U.S. consumers conducted earlier this year for Redpoint Global, 70% of the respondents reported receiving mistargeted information at least once a month, and 24% said they receive mistargeted information daily.
Each proposed use of personalization will also require specific types of data. For example, offering a research report to potential buyers working in a set of selected industries will require different data from making a product recommendation based on an existing customer's previous purchases.
So, this is really a two-part question: "Do we have the right types of data to execute this proposed use of personalization, and is the data accurate and reliable?"
"Will this use of personalization provide a meaningful benefit to members of our intended audience?"
Research by Gartner has shown that personalization works best when it provides meaningful, pragmatic value to the intended audience. The most effective uses of personalization will be those that help members of the intended audience solve important problems, or address important issues, or get more value from a product they've already purchased. Personalization can also be effective if it makes it easier for a customer to do business with your company.
The important point here is that when you're evaluating a prospective use of personalization, you need to put yourself in the shoes of your audience and ask, "How will this help me?"
"Is this use of personalization appropriate based on the relationships between our company and members of our intended audience?"
No one likes "creepy" personalization, and today's consumers and business buyers will react strongly to personalization that goes too far. In the Gartner research mentioned above, 38% of the survey respondents said they would stop doing business with a company that sent them creepy personalized messages.
The lesson here is that the level of personalization you use needs to match the real-world status of the relationship between your company and each member of the intended audience. To be effective, personalized marketing must be based on genuine insights about your audience. When you take personalization beyond such insights, it becomes inauthentic and will likely be perceived as superficial, presumptuous or creepy.
"Do we have informed permission from the members of our intended audience for this use of personalization?"
Numerous research studies have shown that marketers are facing a Catch-22 when it comes to the use of personalization. On one hand, the research shows that most consumers and business buyers want and expect personalized messages and experiences. The research also shows, however, that many consumers and business buyers aren't comfortable with how companies are collecting, accumulating and using their personal or business information.
Personalized marketing will not reach its full potential unless marketers use an approach to personalization that addresses these privacy concerns. If the huge volume of personalization research tells us anything, it tells us that consumers and business buyers will welcome and value personalized content and experiences when they are helpful, authentic and based on permission that is willingly and consciously given.
So how can you gain this kind of informed permission? There are three key steps.
Use personalization "programs" - In most cases, personalization should be organized into discrete programs, each of which is designed to provide a specific type of value to a specific type of customer or prospect. This approach will help you to focus on the purpose of personalized marketing from the perspective of your intended audience.
Ask for participation - Invite the members of your intended audience to "subscribe" to personalized content on a program-by program basis, and reassure them that subscribing to one program won't open the floodgates to other marketing communications.
Be Transparent - It's important to be radically transparent in your invitation about the details of the personalization program. So, the invitation should include:
- Why the program will be useful and valuable for the recipient
- What personal information will be used, and how the information will be used
- How the personalized content will be delivered (format)
- How frequently the personalized content will be delivered
- How long the program will last
- A clear statement that the recipient can "unsubscribe" at any time
Top image courtesy of Jernej Furman via Flickr (CC).