As a company becomes comfortable with marketing technology for outbound e- mail and direct mail, pressure builds to leverage the skills, technology and investment across additional customer touchpoints, such as the Web site and call centers. After all, the goal should be to create a consistent message to customers across multiple media. If so, it would make sense, at a high level, for the same investment to be leveraged across an increasing number of channels and customers over time.

In fact, that assumption is not completely incorrect. In the same way that messages can be sent to customers for e-mail, similar messages can be sent to customers when they visit a Web site or be delivered to an agent when a customer begins a call center session. Interfaces to systems that support Web sites and call centers for such activity are not complex. Basically, login information is the only data required to access the customer profile and to direct an on-screen offer, either the customer’s screen (Web) or the customer service representative’s (CSR) screen (call center). Challenges do exist in such an effort, of course, but such integration is fairly basic.

The Personalization Challenge

From a training, process and technology standpoint, the challenge emerges when management desires "real-time" interactions with customers which reflect not only historical behavior, but also the real-time information stream that emerges from the actions that a customer takes on the Web site (clickstream data) or call center (call stream).

Incorporating real-time data into a processing engine to deliver customized interactions in the same session strains technology, but more so, strains organizational systems and processes. Those organizational systems and processes typically are not addressed early in a real-time technology implementation but can play a key role in the success or failure of personalization. Personalization is not just another marketing campaign but requires skills and organizational considerations that are unique and critical to consider early in the effort. Failure to address such issues can result in team burnout and sub-par results.

What is personalization and, if it is so much trouble, why do it? Why not simply rely on static offers that can be implemented by traditional marketing campaign management organizations?

Personalization, or mass-customization (a more accurate name), is the delivery of content and offers to customers based on a mix of historical and current behaviors. The end goal of personalization is the same as all technology-enabled marketing – to create a sustainable relationship with "best customers" that leads to increased customer retention and long-term profitability. However that profitability is measured, the goal is to increase relationships with customers who increase their purchases, refer similar customers and exhibit other best customer behaviors. The primary difference between personalization and traditional campaign management (if any two- to five-year-old technology can be called traditional!) is interaction speed and the amount of data necessary to determine the appropriate customer responses. While this may sound like a technical problem, critical skills of business rule development and behavioral modeling distinguish this effort from e-mail and direct mail.

Why Bother?

Why do personalization if the effort is so much work and the skill set outside those of traditional marketers? The simple reason is results. Analysis suggests that personalized interactions exceed static contacts in responses, brand imagery and overall profitability. In effect, since communication is a closer fit with customer interests, at that time, the sense is reinforced that the company can address those specific needs. That sense supports brand differentiation and serves also to increase depth and length of the relationship. In addition, since offers can be directed to customers that more specifically meet their needs, response rates and profitability end up higher as well. Basically, personalization has everything going for it. Everyone would do personalization if the challenges to successful implementation were not so daunting.

It’s All About the Data

The challenges to personalization begin with the data. The potential data that emerges from a stream of customer activity in a Web site or call center is often too large to be analyzed easily, particularly if fast processing is required. Remember, the key to personalization is to analyze data and return results within a single customer session as well as capturing behavioral data for analysis. As a result, most organizations concentrate on analyzing summary data or select data elements to distinguish a customer’s visit and customize subsequent interactions based on business rules. Those business rules combine information from historical behavior databases with what- if scenarios designed to address potential customer behaviors. Those what-if scenarios represent part of the organizational and skill set challenges of personalization.

How does marketing generate business rules in the first place? Let’s be more specific, first about what a business rule is. In this case, business rules combine historical customer information with a potential behavior, then specifies content and offers for the customer when that behavior occurs. For marketers to create those business rules (and adjust them over time based on response data), they first need to review historical data. That historical data is usually organized into customer groups, or segments. Those segments include (hopefully) customers who are alike in key behaviors, such as historical purchases, and in psychographics, such as attitudes and beliefs, enabling that group to be effectively marketed as "a single customer." For this assessment, the assumption is that segmentation has effectively been conducted on the customer base. Understanding segmentation is a complex task but clearly within the bounds of traditional campaign management and marketing as a whole.

The challenge really emerges in determining the most likely scenarios for real-time behavior and identifying appropriate content and offers to be delivered when that behavior occurs.

Building Scenarios

How are scenarios created? Through a mix of analysis and marketing insight. The marketing insight is often driven by qualitative data from subject matter experts (such as retailer category managers) and from customers (focus groups, interviews, etc.). Analysis provides input by identifying and aggregating customer behaviors (developing approximate trends) into patterns for content/offer generation. In addition, when marketing (based on qualitative research) suggests additional behaviors to be marketed against, analysis can identify the frequency with which such patterns currently occur. The mix of clickstream (or call stream) analysis, marketing intuition (guided by research) and content/offer generation around scenarios represents some aspects of personalization that are seldom present in technology-enabled marketing. Add on top the need to constantly reevaluate offers and scenarios based on results that are arriving in real time, and you can see that a successful personalization team mixes qualitative and highly quantitative activities in a unique way.

Skills Evolve but Processes Remain

While personalization skills are unique in marketing, overall processes can be consistent with campaign management, providing some synergies. Customer behavior analysis, relevant content and offer development, business rule implementation and results analysis are all process stages in campaign management and in personalization. But, while processes remain the same, the content of each process requires different skills and technology than campaign management, requiring two teams that will sync frequently, but represent different directions and skills.

Integration – The Key to Customer Experience

In fact, personalization and campaign management must sync in order for customers to experience the brand consistently and to ensure that those customers do not receive the same communications and incentives across channels that may not yet be integrated. This integration step is actually one of the most critical, since the end result of technology-enabled marketing is to create and reinforce a consistent voice to the customer across channels. In fact, technology for marketing should be delayed to coordinate with process development in order to prevent marketers from inadvertently overcommunicating or miscommunicating to the most profitable, loyal customers. Often by avoiding that "big bang" approach to technology implementation, companies can ensure a slow and steady rise in morale, program success and financial results that supports expansion of new technology and skilled staff.

As you can see, personalization is not as simple to implement as it might seem, particularly from the process and skills standpoint. In addition, since a consistent brand message is critical, the development of such processes must be prioritized. My next article will explore the different roles involved in a personalization effort and demonstrate the skills that are required to ensure successful development and execution of personalization.

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