Ashley Friedlein: 4Ps of personalisation
One-to-one marketing is back. And this time it’s personal.
Granted, there is nothing new about the concept of personalisation. American consultants Don Peppers and Martha Rogers popularised what they called “one-to-one marketing” in the dotcom heyday when personalisation platforms were very much in vogue.
But as companies wrestled with the subsequent crash, it dawned on brands that they had a long way to go sorting out basic usability before they started on more advanced targeting and customisation. Personalisation went quiet.
But now personalisation is back big time. Fifty-two per cent of digital marketers agree that “the ability to personalise content is fundamental to online strategy”, according to a recent piece of Econsultancy research in association with Adobe.
First, let’s clarify what we actually mean by the term ‘personalisation’. There seems to be little consensus. I would split personalisation into ‘anonymous’ and ‘known’ customers.
For anonymous customers, personalisation can be done at an individual level but the individual is not identifiable. Typically, he or she is actually a cookie or other digital fingerprint. Within ‘anonymous’ there are two sub-categories: customisation and behavioural (re)targeting.
Customisation involves personalising the experience based on attributes like the user’s IP address (and thereby location), their referring search terms, the device being used to access the internet and so on. Behavioural (re)targeting, most often perceived as the ‘creepiest’ form of personalisation, means messaging can be targeted based on an individual’s online behaviour all around the internet.
For known customers, there is both explicitpersonalisation, based on areas such as user preferences and settings, typically via a login of some sort. There is also implicit personalisation, based on a whole range of data, but most usually transaction history. In the former example, the personalisation is usually very evident to the customer; in the latter, it might be less obvious, like Amazon’s product recommendations.
There is rapid growth and interest in all these forms of personalisation. If done well, these can all dramatically increase marketing effectiveness, according to Econsultancy research. John Lewis reported that a personalised recommendation tool on its website was a key factor in driving a 27.9% increase in sales over Christmas last year.
So personalisation done well can truly delight customers. The Pizza Express email, which wishes an individual customer happy birthday and offering them a free bottle of Prosecco or wine on their next visit to celebrate, is an example of how good personalisation can increase customer loyalty.
But areas like data protection and privacy laws are harder to interpret and apply when it comes to social data or the social graph. For example, if a Facebook friend of mine grants access to my profile data, via his, to a brand then I become known as an identifiable person to that brand, despite the fact I may believe to be anonymous to them.
Only 6% of marketers surveyed are using the social graph for personalisation, but 88% of those doing so claim that the impact on return on investment and engagement are high, according to the Econsultancy/Adobe research.
To use the classic marketing tool of the “4Ps”, what should be the 4Ps of personalisation?
1. Privacy. This is an enormous topic, often emotionally charged and its terms vary by jurisdiction and culture. Think about the ePrivacy Directive, ‘Do Not Track’, cookie compliance, the FTC Bureau of Competition, default browser settings, internet self-regulation and so on.
Privacy often comes down to perception and trust in the eyes of the consumer, rather than legislation or the opinion of the industry. Which makes it a brand issue as much as anything. Transparency and a real value exchange (what are you giving customers in exchange for their permission/data?) is more important than the specific technologies or laws.
2. Physical. Ironically, one of the biggest opportunities for digital marketing is the physical world. Digital can be used to configure and personalise the real world. At the extreme, some shops in Japan are changing their store layout in near real-time to mirror what is happening on their websites.
Augmented reality (AR) can add an information layer to the physical world that is entirely personal. Likewise, the ‘internet of things’ sees physical objects embedded with technology and sensors so that they can use the power of the internet to communicate. Click and collect and personalised in-store shopping apps are the tip of the iceberg in terms of experiential digital-physical activity.
3. Predictive. Although we as marketers need to navigate what is seen by consumers as too creepy or Big Brother-like, we still need to embrace predictive technology. It’s vital our digital services attempt to best guess what our customers are interested in and then adapt themselves as effectively as possible to every signal and input a customer gives us.
We have to aspire to predictive personalisation based both on empirical data (think Amazon) and serendipity or ‘sideways’ experiences (think Last.fm). As sensitively as possible, with a level of brand trust and authority, we should be able to tell our customers what they should like, buy, and experience.
4. Proactive. We might think now that pushing information proactively at customers is a bad thing. I think in the future they will expect this, as long as the experience is correctly crafted and choreographed. Google is already experimenting with ‘push’ search.
We have moved beyond the internet as a repository of information to be retrieved. In the world of apps, the internet becomes most useful when we can dothings. The future of digital marketing, and personalisation, is about verbs (think ‘like’) not nouns. Truly successful, personalised, digital services of the future will help you do useful things across all your devices, using cues like voice as much as touch or clicks.
If you remember one-to-one marketing, you’ll remember when PDAs (Psion Organiser, Apple Newton and so on) were cutting edge. Perhaps here too we need to go back to the future and aspire to create digital services that both assist and are personalised.
Ashley Friedlein is chief executive of Econsultancy.