Customer Experience, Personalization

Personalization Gone Wrong: Why Companies Are Still Getting Personalization Wrong

Esat Artug

Esat Artug 14 min read

Source: https://storyset.com/illustration/forgot-password/bro

Marketers are seeking ways to get more personal with their marketing efforts.

A recent report found that 85% of businesses say they provide personalized experiences to consumers, but only a fraction of companies actually achieve this goal.

There's a massive gap between where marketers are and where they want to be when it comes to delivering personalized content, offers, and experiences at scale.

On the surface, it seems like a simple thing for companies to provide highly individualized content and experiences to customers. But in reality, achieving this is extremely challenging because most businesses lack the data required for personalization.

It's no secret that catering to your customer is the key to success, however, a lot of companies are still trying to do personalization with limited data, and sometimes these efforts are going in the wrong direction.

The cost of the wrong personalization activities is massive. Brands lose 38% of customers because of poor marketing personalization efforts.

What Personalization Is and Is NOT

Marketing has evolved into a more personalized approach, and with that comes the use of data analytics to create highly targeted campaigns.

Personalization in marketing is defined as "the process of tailoring a message or an experience to each individual, which speaks directly to their needs, interests, and concerns."

This can be done by using customer information such as demographic, geographic, psychographic, firmographic, or behavioral data. By doing this, marketers can determine what type of message will resonate most with their audience.

For example, when people search for something on Google, they get different results than someone else because their personalized settings have been changed based on their location or previous searches that they have made. This gives them a more relevant experience while using Google, making them more likely to continue using it!

Although personalization is about making a web experience look and feel like it's for you when in reality, companies are just throwing in some colors and trying to talk directly to you.

So, personalization is NOT:

  • showing the first name in the email

  • trying to track and store all the data points

  • buying data from third-party vendors

  • changing the colors of buttons

Personalization isn't just about anything mentioned above. It's about making sure brands create the best possible experience that works for everyone, regardless of their location, device, and more. This requires an understanding of how all these elements interact with each other in real-time.

Personalization is the ability to leverage data to provide exactly what users need at any given moment on any platform or screen - and do so instantly!

How Can Personalization Go Wrong

85% of businesses say they are providing personalized experiences to consumers. In the same report, 60% of consumers say they will re-purchase after a personalized experience. Then, why aren't more companies enjoying the benefits that personalized experience can provide?

There are many reasons why personalization doesn't happen or goes wrong:

  • wrong technology stack

  • lack of human and financial resources

  • complexity of data

  • handling personalization as a one-shot game instead of treating it as a process

Moreover, according to another research, 59% of brands use out-of-date information about their customers, and 57% get customers' personal details wrong.

When you look at the reasons why more companies aren't benefiting from personalization and the numbers, it's not a surprise to see wrong (or creepy) personalization practices every day.

The Consequences of Applying Personalization Wrong

We all know that marketers are constantly looking for new ways to make their message stand out.

This is typically done through personalized marketing, where customers receive tailored content based on what they've previously seen or interacted with. But as much as marketers may want to get personal, there's a right way and wrong way to do it.

The consequences of getting the personalization wrong can be enormous - just look at the backlash against Target after data from one customer revealed she was pregnant before her mother knew about it!

Here are the major consequences of wrong personalization:

  • loss of customer trust because of breach of privacy

  • frustration due to facing irrelevant content and messaging

3 Commonly Used Examples Where Personalization Gone Wrong

There's no denying the power of personalization.

In normal cases, tailoring your website towards users' interests and preferences will give them a better experience. However, it's not always the case.

If you're reading this, it's likely that you've seen the phrase "personalization gone wrong" before. You might even remember an occasion where personalization has gone wrong for you!

I'm here to tell you about some of the most common examples of wrong personalization and some tips (in the next section) on how to avoid making these mistakes in your own work.

Here are some commonly used examples of where personalization has gone wrong:

Over Personalization

How many times have you been bombarded with irrelevant offers?

Let me guess.. You're tired of this situation.

It's annoying to see similar offers for a product that you just bought or an offer that doesn't apply to you anymore.

However, for some companies, this is still the case.

You go to a website and purchase a product. And, the next day, wherever you go, the home page of that website, emails from that company, ads on other websites, the only thing you see is similar products to the one you just bought.

In the recent study by the Nielsen Norman Group, one participant told a similar experience when shopping for toilets:

If I look up toilets on Taobao, there will be information about bathroom appliances everywhere. The downside of this is that if I already bought this thing, the ads still keep showing up. It's annoying, and I'll feel bad if I see a better deal after I bought it.

Data Failure

Another biggest reason for wrong personalization is data failures.

Every time a customer interacts with a company, whether through a mobile app, a website, or another device, the data from that interaction is used to improve the next interaction by providing more informed and relevant content, offers, and product information that are tailored to customers' needs.

It's crucial to have strong data when it comes to personalization. Any flaws in the data can and will ruin the experience brands want to give their customers, ultimately repelling them.

Having incomplete data, inaccurate data, too much data, bad data, or wrong data might be the cause of this.

Since data is the fuel of personalization, it's not a surprise to see that a personalization effort fails because of the wrong fuel.

[Name] Personalization

Although there is debate as to whether it is identification or personalization, name personalization is another most commonly used marketing personalization failure that you can see every day in your inbox.

Most marketers usually start their personalization efforts with emails and addressing

  • people by their name and surname

  • product name

  • company name

  • etc.

Because it's very easy to implement, all they need to do is insert [Name], [Company Name], and [Product Name] they collect when people sign up their product into the emails.

However, sometimes people don't share all the information, and the email you receive sounds a bit weird:

Hey [First Name] [Last Name] from [Company Name]...

How to Do Personalization Right

So far, you've seen not-so-good personalization practices.

Does all of these examples mean personalization is useless and no one should invest in it? Not at all. What it means is that companies have to get smarter about the way they approach personalization if they want their customers' loyalty.

Now the question is: How to do personalization in the right way?

There are lots of different ways that marketers can use personalization. Some methods are better than others, and it's hard to figure out what works for your business.

Here are the nine principles that can help you avoid your personalization practices from being creepy:

1. Develop Personalization Skills

When we talk about personalization, we usually think about how to collect data, which data to collect, the best technology stack, the best way to segment users, etc. However, we usually forget the most important factor that makes a huge difference with all these data and technology: People.

Gartner's research found that digital talent and skills are key differentiators between average and above-average performance in personalization.

In order to deliver the best personalization experience for customers, companies need to invest in people. Especially in the following areas:

  • A better understanding of customer reactions for personalization experiences

  • Ability to understand customers' micro-behaviors

  • Higher knowledge of data and technological skills to create better personalization

  • Content atomization and more content production for different customers' needs, wants, and preferences

2. Atomize Your Content

According to Gartner's marketing personalization guide:

  • Sixty-five percent of marketers indicate they "feel overwhelmed by the need to create more content to support personalization."

  • Meanwhile, two-thirds of B2C marketers report they are expected to show results from their personalization investments in less than a year.

To overcome these two challenges, marketers need to generate personalized content broken down into smaller components (atomic content) based on specific messages or purposes that contribute to the bigger experience to manage expectations and deliver on objectives effectively.

3. Rethink Your Data Strategy

Data is the fuel of any type of personalization and optimization efforts.

However, brands are constantly juggling the need for personalized marketing messages with consumers' increasing concerns over privacy and data usage.

To overcome this challenge, brands have two options:

  • rethink the collection of customer datasets

  • risk losing consumer trust and an opportunity to draw attention away from competitors by being hesitant with what they share about customers on social media platforms like Facebook or Twitter where anyone can see it.

Leading companies have found success utilizing zero-party and first-party data as their primary source of data collection, where customers can choose whether or not they share certain details about themselves at any time with companies.

4. Invest In Accurate, Real-Time Data

As discussed in the previous section, data is the fuel of personalization. What I meant by data is not any type of data. It's accurate data.

According to a recent report, 69% of consumers say they appreciate personalization, so long as it's based on data they've shared with a business directly.

To keep up with the customer demand, companies need to invest more in their own data: zero-party and first-party data.

5. Work with Your Own Data (Zero-Party and First-Party Data)

According to Forrester Research, zero-party data is the data that a customer intentionally and proactively shares with a brand. And, first-party data is data a company collects directly from its customers and owns.

Before diving into this section, let's check the following statistics from a recent report first:

  • 48% of consumers appreciate the convenience of personalization so long as their data is secure.

  • When deciding whether to shop with a particular brand, 55% of consumers said transparency and trustworthiness are the most important business traits.

  • 7 out of 10 consumers are comfortable with personalization, as long as brands are using their own data and not purchased data.

  • 43% of brands said that getting accurate customer data for personalization is the biggest challenge for them.

As you can see above, security, accuracy, transparency, trustworthiness are the common things customers expect from companies. For this reason, companies need to be collecting their own data:

  1. It's more likely to be accurate than second-party and third-party data

  2. Brands can build transparency by telling them how and why they need customers' data

  3. It's more likely that companies will be able to keep it safe and secure.

Therefore, the best way to ensure customer expectations is to work with your own data: zero-party and first-party data.

6. Learn the Limits and Capabilities of Your Technology Stack

Although there will be pressure to generate results on personalization investments, brands need to be careful and take their time to finalize their personalization technology stack. They need to try to understand and learn the limits and capabilities of the tools. Especially if they don't have an in-house team that can support such investments.

The business cases for using these solutions are also uncertain; it takes time to build up customer profiles before one knows what direction this path may take you down, so plan accordingly!

You should always keep in mind that personalization is a process.

And processes take time.

7. Test and Learn

Content can be a tough sell.

That's why you need to test and see what works best for your audiences!

One of the first things brands can do to fine-tune their personalization strategy is testing out different content.

Content analytics is a great way for brands and marketers alike because no matter what, they provide insight into which types of media work best with certain audiences while also giving insights on where more targeted messaging would help most!

Once businesses have some data, not just anecdotal findings from testing on social media channels or internally with their team, they'll know how many people like this type of content versus another one. So there is less guesswork involved when deciding which ones deserve promotion over others.

8. Start Small

Start small.

It's more realistic to make personalization a gradual process rather than an overnight success. Brands can introduce small, incremental changes to see what works for their audience and refine from there.

They can start by targeting a single customer segment. If they have the data available, they can shoot for the one that has more value - improving their experience will more likely to give better results sooner than others.

Moreover, companies need to try concentrating on a single element. They should not try to personalize all the elements at once. Instead, brands need to try to personalize the hero section, checkout page, or banner on the home page. Focusing on one single element will make it easier to test and learn from the results.

After that, companies can start scaling their personalization efforts for different segments and different content elements.

9. Consider Your Customers' Journey

The more knowledge brands have about their customers, the easier it will be to provide a relevant experience.

Consider their journey and how they interact with the brand when deciding what personalized content or actions are best suited for each stage to keep this interaction smooth throughout every step.

A great way to get started is by analyzing how people find brands. Let's say that when a visitor clicks on links, are they taken directly into personalized content related specifically to their search? And where do these visitors go from there based on what we know about them so far in this conversation?

Don't forget. Start small. Test and learn.

The Bottom Line

Personalization is one of the hottest topics in marketing, but companies are sometimes getting it wrong.

Brands are still getting personalization wrong because they don't have the right data and the right tools to support their decisions.

In order to create a successful personalization strategy, take the time to understand how customers think and what they want.

To get personalization correct, companies need to gather data about what makes each customer different and then use this information to create a personalized experience for every user by identifying how they interact with the brand across all platforms.

This type of approach is crucial in today's competitive market, where customers expect brands to know them personally, respect their boundaries and provide relevant content that speaks directly to their needs at any given moment.

Yes, personalization is not an easy task and requires time and effort. But it can be worth the investment if done correctly because of the increase in sales that often follows.