Mistakes To Avoid In Personalization
Personalization involves tailoring content, product recommendations, and messaging to individual customers based on data about their preferences and behavior.
It has become a crucial strategy for businesses today to drive growth by delivering more relevant, engaging experiences. However, implementing personalization poorly can backfire and cause more harm than good.
In this article, we will discuss some of the mistakes to avoid in personalization that companies make and how to avoid them.
Specifically, we will look at issues like not defining goals and metrics, collecting poor data quality, not testing and optimizing, etc.
Avoiding these pitfalls takes careful planning, execution, and constant optimization. Done right, personalization can significantly improve conversion rates, revenue, and customer lifetime value. But the key is developing a thoughtful approach tailored to your business from the start.
With the right strategy and by learning from others’ missteps, you can successfully implement personalization and reap the rewards.
Let’s get started
Table of Contents
Not Defining Goals and Metrics
Setting concrete goals and metrics is a vital first step when implementing any personalization initiative, yet many companies fail to do this properly. Without clear objectives and KPIs to track, you end up launching efforts without a way to quantify impact or optimize over time. That leads to wasted resources and missed opportunities.
To avoid this misstep, you need to start by asking questions to define goals that align with broader business objectives. What exactly are you trying to accomplish with personalization? Some examples of common goals include:
- Increasing conversion rate by X%
- Reducing shopping cart abandonment rate by Y%
- Improving customer engagement as measured by pages visited per session
- Increasing revenue per website visitor by Z%
Once you know your goals, identify 3-5 specific metrics that will indicate whether you are hitting those targets. Metrics like:
- Conversion rate on personalized product pages
- Clickthrough rate on personalized on-site messaging
- Sales attributed to personalized recommendations
- Reduction in cart abandonment rate for users who received personalized emails
Track these KPIs on an ongoing basis to quantify personalization impact. You may need to test different versions and tweaks to consistently improve. Also, segment users to identify issues for certain groups.
Setting aside time upfront to align on goals and metrics will pay dividends. You’ll be able to show clear ROI, optimize intelligently, and build internal support for personalization efforts.
Revisit occasionally to update based on learnings and changing needs. With the right goals and metrics as your guide, personalization can become an invaluable growth driver.
Collecting Poor Quality Data
Solid, high-quality customer data is the prerequisite for impactful personalization. Yet many companies end up with flawed, incomplete data that leads to ineffective efforts. There are a few key ways poor quality data undermines personalization:
- Insufficient behavioural data: Not capturing enough information about each customer’s interactions, purchases, content views, etc means your algorithms have too little signal to discern unique interests and preferences. This can lead to generic experiences.
- Irrelevant data collected: Personalization relies on targeted data like purchase history, product views, email engagement. But some companies capture extraneous details like birthdates, addresses, etc that provide little personalized insight. Collecting the wrong data is a waste.
- Uncleaned data: Raw data inevitably contains errors, duplicate entries, formatting inconsistencies, and obsolete information. Failing to deduplicate, validate, and update means feeding dirty data into personalization engines. This dilutes the algorithms’ accuracy.
- Static, outdated profiles: Customers’ interests evolve rapidly. If you don’t continuously update profiles with new behavioral data, personalization loses relevance over time. Your insights into what each customer wants right now gets degraded.
Follow these best practices for better data:
- Audit existing data, keeping only valuable attributes like transactions, clicks, search queries
- Build workflows to frequently capture relevant behavioral data across channels
- Clean entries by standardizing formats, fixing errors, removing dupes
- Refresh customer profiles continuously as new behavioral data comes in
- Use tools for validation, appending third-party data, and automation
While solid data practices require investment, the payoff is more precise personalization leading to higher engagement, conversions, and lifetime value. Make customer data a priority.
Not Testing and Optimizing
Launching a personalization feature is just the beginning – optimizing based on continual testing is where the real impact comes from. Too many companies fail to dedicate proper resources to testing and improving their personalization over time. This results in lacklustre experiences that gradually become irrelevant.
To optimize personalization, you need to test different elements extensively:
Algorithms – The underlying algorithms that analyze customer data to drive personalization can be tweaked and refined over time. Test changes to the data inputs, weightings, recommendation logic, and machine learning models to improve accuracy.
UI Placement – The placement of personalized content can dramatically influence performance. Run A/B tests to see where recommendations, messaging, etc drives the most conversions and engagement.
Creative Versions – Test different versions of personalized emails, site messaging, product recommendations, etc. to see what copy, offers, images, etc resonate best.
Segments – Targeting different user segments with tailored messaging or product suggestions can improve relevancy. Test which segments respond best.
Over time, testing uncovers insights like ideal algorithms for different uses cases, high-performing placements and creative, relevance issues with certain segments, and more.
Dedicate resources to ongoing testing, analysis, and optimization. Set up processes to quickly assess tests and implement winning versions across platforms.
Don’t treat personalization as set-it-and-forget-it – regular optimization based on data is key for incremental gains over the long run. Testing drives continuous improvement.
Failing to Coordinate Teams
Implementing effective personalization requires tight alignment between marketing, engineering, design, analytics, content, and other groups. When teams operate in silos without collaboration, personalization suffers from inconsistent data, experiences, and execution.
Some best practices to foster tight coordination:
- Create a centralized “personalization council” with executives from all key departments. This governing body can set the overall vision, strategy, and goals to ensure unified efforts.
- Institute regular cross-functional meetings to discuss initiatives, share insights from different perspectives, and uncover blockers. This enables real-time problem solving.
- Designate project managers to coordinate across teams for each personalization campaign. They can facilitate communication and ensure smooth hand-offs.
- Build common protocols for data sharing, content tagging, development, testing, etc. This consistency results in seamless experiences across touchpoints.
- Provide training across teams on personalization best practices so knowledge and capabilities are aligned. This avoids critical gaps.
- Demonstrate how each department’s contributions map to overarching business goals. This instills a unified mindset focused on the customer.
- Implement shared incentives based on cross-functional metrics vs siloed KPIs. This motivates true collaboration.
Strong governance, open communication, process transparency, and shared objectives are imperative. Personalization requires a strategic, collaborative approach across departments. Eliminating fragmented efforts avoids major pitfalls and unlocks personalization’s full potential.
Not Understanding the Technology Required
Many companies fail to appreciate the robust, integrated technology capabilities required to do personalization well. Without the right tech stack, you end up with fragmented efforts that don’t scale. Building a solid tech foundation is crucial.
Carefully audit your existing marketing, analytics, and infrastructure tools. Look for gaps in:
- Collecting behavioral data across all properties into a unified customer view
- In-depth analysis of data to reveal insights
- Content management platforms that support personalization.
- Channels that allow for tailored messaging at scale
- Tight integration between systems to deliver unified experiences
For each gap, research best-in-class vendors to understand your options. Consult experts to determine which solutions fit your needs and integrate well together.
When evaluating options, consider requirements like:
- Data processing capacity and analytics functionality
- Flexible content authoring with personalization plugins
- AI-driven features for recommendations and matching
- APIs and connectors to unify data across tools
- Testing capabilities
- Vendor reputation, support, and product vision
This evaluation process allows you to build a technology roadmap tailored to your personalization objectives and existing constraints. Allocate sufficient budget for new tools and labour to implement them properly.
Rushing technology decisions or retaining siloed systems will undermine efforts. With an integrated stack purpose-built for personalization, you gain agility, scale, and impact.
Trying to Personalize Too Much Too Fast
In their excitement, some companies bite off more than they can chew by attempting broad personalization all at once across every channel.
This tends to overwhelm customers, strain internal resources, and ultimately damage the personalization effort before it gets off the ground. Avoid this mistake by taking a phased rollout approach.
Start with one high-impact use case like personalized product recommendations on category pages. Measure success on key metrics like conversion rate lift before expanding.
Next, add tailored on-site messaging or emails to align with the products being promoted. Again, quantify lift before growing further.
Gradually expand into new channels in order of impact, focusing on quality over quantity. Limit the number of concurrent tests to refine specific elements before optimizing others.
Prioritize personalizing newer campaigns and customer journeys first, where there is more room for improvement. Circle back to update older efforts later.
Target initial personalization toward high-value customer cohorts where impact will be greatest. Broaden to other segments once efforts are refined.
Limiting scope in early stages avoids overwhelming customers with over-personalization before you have honed relevancy. It also allows your teams to build expertise and capacity in phases, instead of overextending resources.
With small, iterative expansions guided by data, you can thoughtfully scale personalization over time. Patience and discipline early on leads to greater maturity and business impact long-term.
Privacy and Data Considerations
While personalization is powered by customer data, companies must still respect privacy, transparency, and choice. Customers are wary of how their data is used – failing to maintain their trust can prompt backlash and reversals of personalization efforts.
Some specific ways to keep privacy and ethics top of mind:
- Provide clear opt-out mechanisms on websites and in email communications so customers can decline personalization. Respect and enforce those preferences.
- Anonymize collected data by removing personally identifiable information and aggregating users into broader segments before analyzing.
- Avoid collecting and retaining overbroad data. Carefully determine what is directly relevant for personalization algorithms.
- Be transparent in privacy policies and notices about exactly what data is gathered, for what purpose, and how it is secured.
- Use encryption, tokenization, access controls and other security best practices to protect stored customer data from breaches.
- Allow customers to access, edit or delete the data held on them per data subject request policies. Refresh profiles accordingly.
- Train personalization teams on avoiding sensitive assumptions or judgments based on customer data – finance, health, politics, etc.
- Establish responsible governance of data use. Involve consumer advocates and ethics councils to address concerns.
With care and respect for individuals, personalization can thrive. But it requires conscientious data practices centered on transparency, choice, security and judicious use. Honor privacy obligations and personalization will earn trust.
FAQ
1. Question: What are some examples of personalization done right?
Answer: Netflix’s personalized recommendations, Spotify’s Discover Weekly playlists, Amazon’s product suggestions based on purchase history.
2. Question: How much does it cost to implement personalization?
Answer: Depends on scope, complexity of data, platforms required, but can range from $10K for basic setup to over $100K for enterprise-wide.
3. Question: What skills are required in-house vs. outsourcing?
Answer: Data analytics, marketing strategy, and design should be handled in-house. Can outsource tech implementation and optimization.
4. Question: How long does it take to see results from personalization?
Answer: Can see lift in key metrics like conversion rate within a few weeks of launching basic personalization. Continual optimization improves over time.
5. Question: What are the risks of personalization?
Answer: Irrelevant or “creepy” suggestions if poor data quality, overstepping privacy boundaries, resource drain if not managed strategically.
6. Question: How can personalization improve the customer experience?
Answer: More relevant content and product recommendations. Tailored messaging vs one-size-fits-all. 1:1 connections.
7. Question: What metrics are best for measuring personalization success?
Answer: Conversion rate, revenue per visitor, clickthrough rate, churn rate, cost per acquisition.
8. Question: How can companies balance personalization with privacy?
Answer: Transparency, opt-in/opt-out, anonymization, judicious/ethical data usage, security.
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