In this second article on personalization marketing, we focus on the key issues of organizing a personalization team and integrating personalization into other marketing activities. But let’s begin with a common understanding of the term "personalization."

What is Personalization?

In this discussion, personalization represents the effort to provide near real- time responses to consumer-initiated interactions with an organization. Typical applications for personalization interaction include call centers, where marketing offers and communications are changed based on a customer’s answers, or Web sites, where offers, communication and page design can change based on the pages a customer visits in a session. In both cases, marketing offers and communications vary based not only on the data from that actual visit but also on historical information about a customer’s transactions or past behavior.

Key Components

Because many different and activities go into the work of personalization, it is important to establish a multidisciplined team to develop, manage and consistently ensure successful execution. Of course, without successful execution it is difficult to establish clear ROI –the "keys to the kingdom" in this results-driven economy. "It is easy to get lost in the vision of personalization and forget the many details it takes to make personalization a success," says Jennifer Hidding, senior manager of Personalization Marketing at Best Buy, "Personalization requires management of marketing, analysis and technology activities to be successful."

Marketing develops targeting, creative and offers, typical of technology-enabled marketing activities. However, this role now also includes creation and management of business rules and linkage of creative and offers to those rules. Typical marketing activities in a personalization effort include:

  • Creating customer scenarios, which are potential behaviors that a customer may exhibit (often represented by business rules);
  • Managing the personalization marketing P&L;
  • Developing content and offers to be delivered when specific behaviors occur;
  • Ensuring integration of personalization marketing with other direct-to-consumer (D2C) marketing.

Analysis also has a significant place at the personalization table. These experts provide the customer behavior knowledge base and identify the appropriate information to be delivered to the personalization application:

  • An understanding of behaviors commonly exhibited by customers and the relationship of those behaviors to transactions and profitability;
  • Forecasts of potential response and profitability;
  • Determination of customer information to be provided to the personalization application (since personalization works in real time, tools can only examine a small number of data elements).

Technology activities are always important in technology-enabled marketing but, in the case of personalization, the case is even more so. Since personalization marketing efforts are executed in close to real time, the margin of error is so much less than traditional marketing. An hour delay in e-mail campaign execution is much less critical than a five-minute delay in providing personalization marketing, since the consumer is likely to have moved on by that point. Key technology tasks include:

  • Integration of personalization technology across touchpoints,
  • Management of the performance of personalization (potential delays in systems),
  • Maintenance of customer information in the personalization application.

Bringing a Single Voice to Market

One point to highlight is development of marketing program consistency. The importance of integrating personalization into other marketing activities cannot be overstated. Since the goal is to create a single company voice to consumers across all touchpoints, it is critical that personalization business rules (which customer receives what offer/communication when they exhibit what behavior) are in sync with all other D2C contacts. That integration will address key issues such as: If a customer receives an offer through direct mail, should they also see the same offer on the Web site?" or How many times can a customer be marketed to in a given day/week/month? Addressing those issues is critical to creating a customer contact strategy and ensuring that such a strategy is successfully executed across channels and segments.

Job Building

Now that we have identified key activities in personalization – marketing, analysis and technology – the next step in implementation involves the developing "roles" that group activities and assign those roles to "jobs." Jobs can include multiple roles, since team members often wear more than one hat, but each role is still critical to successful personalization execution.

Figure 1 highlights some of the roles that are common in personalization marketing:

Figure 1: Roles/Portrayals in Personalization Marketing

High- Level Activities Detailed Activities Roles
Developing scenarios Behavior path analysis Personalization Creation
Scenario development
Managing the P&L Financial analysis and management Financial Management
Content and offer development Sourcing of offers and appropriate content Personalization Creation
Management of creative materials Marketing Coordination
Approval tracking Knowledge Management
Integration of personalization into overall customer contact strategy Identify relevant segments for personalization Marketing Strategy Development
Coordinate with other marketing units
Develop overall approach for segments
Understanding of customer behavior patterns Analyzing historical behaviors Statistical analysis/modeling
Forecasting future behavior paths by segment
Forecasting of anticipated results Analyzing historical programs Statistical analysis/financial analysis
Predictive modeling for future responses
Determination of customer information for personalization app Identify distinguishing attributes for each personalization scenarios Statistical analysis and application subject matter expert (SME)
Determination of appropriate methods of transmitting and storing those attributes in the personalization application
Integration across applications Reviewing application interfaces Technical architect/application SMEs
Determining and implementing integration technology
Performance management Reviewing performance benchmarks Application-specific database administrators (DBAs)
Maintenance of customer information Extraction, transformation, loading and storage of key customer information Data warehouse architects and analysts

This chart does not intended as an actual portrayal of every activity and every role involved in personalization marketing. Rather, it illustrates some of the different roles required to be successful. To further complicate matters, many roles are not located within the same department, which presents challenges of focus and consistency as departmental priorities may change over time.

Marketing with Scarce Resources

The challenge of a personalization marketing manager in these frugal times is clear – how to develop the framework, execution and results without investing in a small army of staff. "Focus is critical," says Hidding, "and a willingness to accept less than perfect in order to move quickly." Clearly, getting "points on the board" is the critical attribute for a new personalization marketing effort (and for most technology- enabled marketing in general).

In order to quantify the value of personalization, roles must be consolidated in ways that may not scale successfully but will address the critical activities required to implement personalization and to realize value. At that point, management can begin to build out the team in a more future-state framework.

With few people and many roles, how can personalization be successfully organized? Obviously the answer is specific to each organization, but some overall guidelines do exist:

  • Leverage existing infrastructure. Do not attempt to reinvent the wheel, since staffing is so limited. If another group is responsible for obtaining offers and coordinating creative materials (such as a direct marketing team), those resources can support personalization and reduce the workload on dedicated staff.
  • Pilot the effort in one touchpoint and partner with the owners. This may seem obvious, but to succeed in getting points on the board, a touchpoint sponsor must buy into personalization’s benefits and agree to support the extra workload on their team.
  • Develop unique value. Target dedicated resources to areas where the most value can be created for the organization. In personalization, those areas tend to be development of a customer behavior knowledge base and marketing scenario planning. Pay extra attention, of course, to P&L management, since that area will determines success. That area should definitely reside with dedicated staff.
  • Accept imperfection. To avoid team burnout, management must focus on getting "about" the right answer into the marketplace rapidly. Temptations to overly deliberate will delay results and reduce morale, which are critical success factors.

Personalization is not a trivial task. Multiple activities result in multiple roles, which will end up being addressed across multiple departments. The key to success is to focus on driving tangible value in the short term. That value can best be driven by leveraging resources and focusing dedicated resources on the highest value add activities.
The one aspect not yet mentioned is the importance of processes. It is critical that personalization not be conducted as a one-off activity that cannot be reproduced or scaled when the results support such an expansion. Process work, that is, determining how personalization fits into other marketing activities and defining key differences, is worthwhile for two reasons. First, such work ensures scalability when the time is right. But even more important, process work forces management to think through coordination between businesses and begin to address coordination issues that are critical to personalization’s success, if not the success of the entire organization. Activities, roles and jobs are the framework, and processes are the engine that drives personalization across an organization. Focus is the fuel that drives that engine into new marketing territory.

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