As seen published in Information Age.
Positively Toxic: How to Avoid Poor Implementation and Gain Value from Effective Personalisation
Personalisation of the online experience isn’t a new concept. Today, businesses in every sector are attempting to connect with their customers, seeking competitive advantage through targeted advertising, or recommendations based on previous purchases and browsing behaviour.
AS PWC’s Miles Lethbridge noted,
Miles Lethbridge, Head of Retail Development, PWC
today’s online shoppers want an eCommerce fulfilment service that’s tailored to their lifestyle and relationships. In other words, they want it to understand that they’re usually in on Monday afternoons and Wednesday evenings, and that Margaret at number 58 is happy to accept their parcels if they’re out.
The increased popularity of ad-blocker software reflects the negative impact of poorly executed personalisation. Ofcom found, “research suggests that consumers seek to use ad blockers because they dislike certain types of more intrusive ad formats, rather than [because of] a dislike of the adverts themselves.”
Ad blockers are used by 22% of online adults in the UK, a figure that is causing concern for digital publishers. With the next generation of browsers promising (or threatening) to have ad-blockers built in, the need to address the root problem of poor personalisation is more urgent than ever.
Personalisation done well should give users appropriate information at an appropriate time and place. At the very least, it should function as an unnoticed nudge towards action.
Apple’s iPhone iOS 9 provides one example of effective personalisation, warning users of traffic problems on their usual route home, before they have left. With this information, people can decide to change their departure time or route to get home quicker.
Similarly, the local weather-sensitive clothing recommendations that Burton added to their site, or the interaction that wearable tech companies like Fitbit have with customers, all provide examples where personalisation done well proves effective and useful for customers.
The new generation of digital personal assistants like Google Now, Microsoft Cortana and Amazon Alexa, are an emerging example of how integrated into daily life personalised services are becoming.
These applications are designed to be new digital friends. Not only do they provide useful personalisation in terms of content, but they also provide a more human interface; appropriate intervention by a machine followed by a human conversation reduces friction for the user.
According to research by McKinsey & Company, “personalisation can deliver five to eight times the ROI on marketing spend, and can lift sales by 10% or more”.
Demonstrating the level at which effective personalisation drives powerful results. Retailers like online clothing store Missguided illustrates this perfectly when it experienced an increase of 33% in revenue and 35% conversion rate, after implementing its personalisation strategy.
Driving customer acquisition
Not only does good personalisation prevent the loss of customers, it can also be an effective tool for customer acquisition. Giving site visitors a friction-free, seamless and personalised experience – regardless of channel – quickly converts them to customers.
An experience that gets richer and more valuable over time reduces customer churn. Firms like luxury travel company Secret Escapes rely heavily on effective personalisation to drive customer acquisition through digital channels like Google and Facebook.
With customers increasingly expecting a truly seamless, deeply personalised experience wherever they are: on the sofa with their iPad, on their work PC or standing in your store with their smartphone, the benefits of effective personalisation are clear.
Organisations that take the time to implement their personalisation strategy give themselves that competitive advantage in a market that suffers from this new era of brand disloyalty.
However, when the repercussions on a business can potentially be so toxic, organisations would be better doing nothing than doing personalisation poorly.