Have you ever bought a musician’s autobiography on Amazon.com, and then returned to the homepage to get a suggestion to buy their latest album? This isn’t mind reading, but the power of personalization.
Personalization uses data about users to create content that is unique and customized to each user. However, every stakeholder in this topic holds his/her own thoughts. This post looks at the advantages and disadvantages of personalisation for businesses and individual users.
Originally posted in December, 2014.
Updated in January 2018.
Let's start by looking at the digital trends, which are driving marketers in 2018.
Big data and Artificial Intelligence (AI) are among the top in the list. These are among the key elements of building personalised experience. Big data, together with AI technologies will enable marketers make better predictions about customer behaviour, covering more customised content, offers and marketing automation. This also results in a radical shift from traditional (static) to more dynamic content.
With personalizing content, businesses can become more efficient by displaying the relevant ads and content to the right users. This personalized content engages the customer much more and leads to a higher conversion rate, compared to generic, “one size fits all” content. For example, a 2013 Monetate/eConsultancy Study found that in-house marketers who are personalizing their web experiences (and are able to quantify the improvement) see on average a 19% uplift in sales. It also keeps the website looking fresh with relevant content. There are many options to deliver it with tools like visual Web Optimizer (read our previous blog post on A/B testing to learn more).
Positive web experience for a user is vital, as they engage with selected content that appeals to them the most. Staple examples of companies that are excellent at online personalization are Netflix and Amazon. They use previous purchases and other data to suggest products that users may find useful. The data does not have to be as complex as search history or previous purchases. Research by Capgemini shows that more than 60% of shoppers say they find it appealing when an online store remembers their personal details and payment information to speed up a purchase. Personalization can be as simple as a “Welcome Back” message with a user’s name.
A few personalization take-away’s:
- [WEB]: welcome registered users by their first name and display content suggestions based on their past history;
- [WEB]: show multiple columns of important information to the new website visitors, and single column scroll-won for the returning visitors (read more on the digital marketing best practices of 2014);
- [WEB]: show content specific for user's location and language, e.g. agents in your area;
- [WEB]: display the most relevant HELP center Q&A’s based on past searches and browsed content;
- [WEB]: if a person coming from social post, customize the content they see to display what information it referred to in the post they clicked;
- [EMAIL]: customize email content based on the user’s history;
- [EMAIL]: include user’s name, company and/or relate to the past communication you held to continue the discussion.
Who did it well
Amazon has been at the top of the case studies for personalised content already for a few years. They cover a custom greeting, remember your past log in, recommend products based on your browsing history and past purchases. And it’s not just about the web experience, their email workflow is also set up for success, leading us all (consumers) to ‘unplanned purchasing decisions’.
Netflix is another great example to look after. They use very similar approach to Amazon, but then recommend shows and movies instead of real products. Check it out!
Though there are benefits of personalization, there are also some drawbacks to be named. Companies with personalized content usually have higher costs. It costs time and money to prepare content that would appeal to different segments. Instead of buying the typical banners, companies now have to spend money on tools and pay for different content and ads.
Some of the involved costs:
- resources to map out the trigger-effect dimensions for personalization, monitor and optimize the performance;
- software and tools to collect, analyze and automate personalization factors;
- custom (more) creative and landing pages.
On the side of the consumer, the technology does not work a 100%. With the use of search history and cookies, there may be some failings that users find frustrating. For example, a student is searching for information about the French revolution, but he is personally interested in African history. He now gets Amazon recommendations on French revolution even though he has no longer any interest in the topic. This is just an example of how personalization may go wrong in some cases.
The concerns on personalized content come mostly from users, where they raise privacy issues as a problem of web personalization. They feel they are being tracked, followed and watched to be sold something. Websites have responded with an opt-out option, but it can only be accessed only if asked for. This gives a Big brother vibe that is in effect right now. There is a lot of debate on web personalization and some of the privacy issues all around the world.
In 2018, Europe is also applying a new GDPR regulation, calling for much more specific consent requests when collecting personal data. With the arrival of the new legislation, double opt-in will become essential if you want to start or continue your personalisation effort in 2018. While this two-step approach will reduce the number of subscribers, you also must get a legal consent from all of your prospects (which you must be able to prove) before sending them any sort of marketing communication to avoid the regulator penalties. This might not sound overly new to some of the big corporations, but can definitely set limitations and cost extra buck for smaller businesses.
Here is what you need to keep in mind:
1. Send opt-in request to existing database
Send an email to all your existing subscribers and ask them to opt-in to keep them in your marketing communications list. You can also send a follow up email to those who do not respond to the initial opt in request, saying they will be “missing out on essential news”, if they do not opt-in to continue receive your emails.
2. Define opt-in statements for new sign ups
So as you can see, with digital personalization there are advantages of more engaging content and higher conversions, but they also come at a higher cost. There should always be a balance between the two: a transparency from websites on the information collected and the clear power of choice for users to actually be tracked and monitored.
What are your views on Web personalization? How has it helped your business? What have been the challenges? Please leave a comment below and share your experience with the community.