4 Personalisation challenges holding back brands
June 07, 2016

4 Personalisation Challenges Holding Back Brands

British Home StoresPersonalisation is a hot topic, with widespread consensus amongst brands on why it’s important, and ultimately essential. But despite the intensity of interest, effective adoption and success stories have been limited so far. This blog article explores some of the obstacles brands face and identifies critical success factors.

THE CASE FOR PERSONALISATION IS OVERWHELMING

There are two simple reasons why personalisation is becoming so important for brands. First, consumers now expect to be engaged in a timely and relevant fashion. Those expectations are rising fast and continue to grow, fed by the experiences provided by new brands like Uber & AirBnB, extensive consumer choice and the power of mobile devices. As a result, the one-size fits all approach to engaging audiences will soon be defunct.

The second reason is that a well executed approach to personalization can be commercially lucrative. The retail sector is leading here, with Waitrose delivering a 24% rise in online orders for new and early stage shoppers using personalization, whilst online fashion retailer Missguided has increased conversion rates by 34% since implementing a personalisation and optimisation strategy that allows it to target customers with specific, tailored experiences.

Here are 4 key challenges we see holding back brands when it comes to Personalisation.

1. Lack of a clear personalisation strategy or plan for brands

What does Personalization mean for my brand, which channels do I focus on (eg. email, website, social, advertising), do we need to aim for one-to-one personalisation or target audience segments, do I have the right data and insights, what does the ROI look like. These are some of the key questions we encounter from brands at Knexus and which sometimes either slow a brand’s progress with personalisation to a crawl or even push Personalization into the ‘too difficult’ pile.

A plan or strategy for Personalisation is important, but as we highlighted in a previous blog article ‘Personalized marketing – even small moves up the continuum can deliver huge results’. Personalization isn’t an all or nothing option. The challenge is how to make progress, build learning and deliver value.

2. Poor understanding of Personalisation

There are different levels of Personalisation. Unsurprisingly the highest, most ambitious level of one-to-one engagement with a timely and high relevance experience for each customer, offers both the highest potential ROI but is also the most challenges to deliver at scale.

So it’s no surprise that the current embrace of personalisation is primarily at the lower end of both complexity but also value creation, splitting users into demographics according to data. The result is consumers get the same content and messages as everyone else in the that grouping. Better than one size fits all but still broad brush and dependant on a ‘best guess’ approach.

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Last year Gartner sort to create ‘personification’, as a definition for “the delivery of relevant digital experiences to individuals based on their inferred membership in a defined customer segment, rather than their personal identity.” This approach leverages personas, taking an audience segment without personal information to avoid privacy related issues.

3. Data security

The benefits of using data for greater personalisation should be clear for both brands and consumers. By delivering timely and highly relevant experiences, the brand increases impact and ROI, whilst reducing waste. In return consumers get insights or offers that match their needs and avoid the irritation of irrelevant content.

However, as we have seen with the rapid adoption of Ad Blockers (see ‘Brands Content Challenge as Ad-Blocking Accelerates’), where user numbers have grown from 21m (2009) to 198m (2015), consumer trust is fragile. With the recent disclosure that Linkedin suffered the sale of 117 million users’ data on the dark web only the latest in a catalogue of high profile security breaches from Sony to eBay, the regulators are paying close attention and companies are racing to strengthen security measures that protect and anonymise user’s data whilst reassuring consumers.

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4. The role of Technology

In a recent article we reflected that whilst almost 70 per cent of marketers believe personalisation is very important to the customer experience, 50 per cent feel constrained by technology in delivering this. Typical challenges we encounter when working with brands to personalise experiences include..

a) Unifying data – many brands still have a fragmented, channel first approach which acts as an obstacle to unifying data across channels to fuel personalisation

b) Content silo’s – as content investment grows rapidly, content formats (e.g. videos, images, html), sources (branded, social and user generated) and contributors (agencies, bloggers, in-house content creators, consumers) are proliferating and content is scattered across different channels, content management systems and impromptu storage options

c) Marrying customer data and content effectively – big data means brands have more information and insights than ever before. However using technology to effectively match that data with the right content remains work in progress for many

d) Automated personalised content distribution – consumers expect not only highly relevant content experiences but also timely and consistent experiences. Either complete or at least partial automation of delivery is therefore key for feasibility, whilst distribution capabilities across channels and devices will ensure a consistent experience

THE RISKS OF INACTION SIGNIFICANTLY OUTWEIGH  ALL OTHERS

If the era of one-size-fits-all marketing is in rapid decline, the competitive risks of either moving too slowly or doing nothing with personalisation are likely to heavily outweigh those of plotting the most effective way forward.

 

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