Personalization is no longer a pop-up ad about a handbag you might like or a list of recommended movies. Personalization has evolved into hyper-personalization that is highly specific and provides relevant recommendations or content to each individual. This is possible through granular CX data and its real-time analysis.
The prospect of hyper-personalized marketing messages, however exciting it seems, may sometimes cross the boundaries by being creepily accurate to the point where customers might find it uncomfortable. Whether the brand knows too much about them or an ad or suggestion that completely throws the customer off-guard– the experience can leave customers with a bad taste.
We will discuss why this happens and how to avoid bad personalization in your CX personalization strategy.
Understand personalization and its benefits
Personalization in marketing, which is sometimes called one-to-one marketing, is the practice of using consumer data to offer a personalized brand experience. Some examples of personalization are tailored communications for individual consumers, personalized digital ads, tailored websites, etc.
Personalization has a record of yielding outstandingly favorable outcomes, and it can be tempting to jump feet first into it. But if you’re not careful, it can quickly spiral down to bad personalization, creeping out customers and causing them to churn.
Why does personalization matter?
In a saturated and highly competitive market, it is a challenge to attract customers. It is no longer enough just to deliver quality products or services; customers stay loyal to brands that treat them well. They enjoy customer engagements that are conversational and prefer customer experiences that are specifically tailored to them.
One of the best ways to offer top-tier CX is through personalization, which
creates an environment where the customers feel valued. Personalized marketing is possible through customer information that is collected leveraging the latest technology.
The collected data acts as a powerful lens that highlights the customer’s behaviors and interests. Using these insights, brands can develop highly personalized marketing content that the customers expect and want.
What concerns do consumers have about personalization?
While personalization can be a powerful medium to earn customer loyalty, it has also led to concerns about consumer data privacy, such as a sense of being watched, distrust in data security measures, data sharing, and intrusive ads.
According to a study conducted by Salesforce, more than half of consumers are happy to share their personal information as long as it benefits them. 72 percent of surveyors said that they would stop purchasing from a brand due to data breach concerns.
Evidently, brands should devise ways to provide meaningful marketing services without bad personalization that may concern customers about the safety of their data.
When personalization gets annoying
- Irrelevant marketing attempts: Continuing to receive ads and communication based on one-off purchases like last-minute gifts or impulsive purchases can be annoying as it is not an actual representation of the customers’ preferences or interests.
- Unhelpful content: Personalization should make life easier for the customers rather than make them work for the purchase they want to make. Advertised content should be helpful, like linking directly to the products.
When hyper-personalization gets creepy
Bad personalization or “creepy” personalization can be quite unsettling for customers and leave them feeling uncomfortable with thoughts like, “How do they know so much about me?” causing an immediate change of mind.
There is a fine line between personalization like a “you understand me” moment and alternatively, invasive advertising and recommendations that may come off as plain creepy. As a result, the customer’s comfort level with personalization plummets.
Navigating between subtle personalization and complete targeting creates uncertainty for customers, leaving them disconcerted about whether an experience is specifically tailored for them or experienced by all, making it challenging to discern their preference for personalization.
Learn how a well-designed CX can be the ultimate gift to customers this holiday season.
Making personalization work in a positive way
- Get with the times
Bad personalization is a sliding scale. With more brands adopting good personalization practices, people are opening up to the idea of hyper-personalization. What may have been considered creepy a few years ago may be acceptable now as personalized experience and communications are preferred more today. Brands can always look into what is currently acceptable and what other marketers are doing.
In this context, explainability is what one can reasonably justify knowing the details of a customer. If it is reasonable, it is acceptable information to use for personalization. The best way to know if the acquired data meets these requirements is if it’s first-party data, i.e., data that is collected directly from customer interactions with the brand. The customer is fully aware that the brand has this information.
However, bad personalization mostly stems from third-party data. That is why there has been such a huge push for data privacy in the digital landscape right now, and it is best to stick to first-party data for personalization purposes.
- Expected personalization
To avoid personalization from going wrong, customers need to first expect personalization. Did they sign up for it? If it is not first-party data, they probably aren’t expecting it. Not everything adds value. So, make the personalization count.
- Reasonable value exchange
The entire point of offering personalization is to deliver good value to the customers and improve the CX. If the customers don’t see the value, personalization won’t work. Customers are willing to give you their information in exchange for a suitable value in the form of excellent product recommendations, helpful links and articles, and relevant content. Brands should strive to create a valuable experience for their customers as a reasonable exchange to gain access to user data for personalization purposes.
- Customer control
A preference center on a brand’s website can allow its visitors to choose how they would like their experience personalized, or to opt out of personalization altogether. This way, the ball is in the customer’s court, and they have control over the experience. Another way to facilitate customer control is through sign-up forms (not the mandatory sign-ups that leave customers no choice but to add their details to access certain content).
Best practices to avoid bad personalization
Here are some of the best practices that brands can follow to avoid bad personalization and put their clients at ease.
- Know the applicable privacy regulations – It is critical to be aware of the data governance policies in specific industries and regions that apply to the business. The details often vary by industry. Businesses with a global presence must comply with the General Data Protection Regulation (GDPR), which gives users more transparency and control over their data.
- Showcase the symbiotic relationship between personalization and customer privacy – Personalization should not be at the expense of a customer’s privacy. Brands should assure their customers that their private data will be used in the right way by being transparent about what data will be captured and the requirements for accessing and using that data. Customers will feel at ease and trust the brand if they know that outsiders cannot access their data thus making it easier for brands to provide optimal customer experiences.
- Clear consent guidelines – Enterprises should have clear consent guidelines that specify to what extent customer data is being harvested and how it will be used. Customers should be given the option to manage their privacy preferences and even withdraw consent if they feel their data is being misused in any way.
- Use data only to enhance CX – The main objective of businesses for collecting customer data should be to enhance the CX. The data should shed light on the consumers’ tastes, purchasing patterns, and preferences. It should be used to create meaningful connections with the customers by always maintaining communications that are in context, relevance, and good taste.
- Training on ethical data usage – All employees have a role to play in ensuring that they use customer data in a compliant way and handling sensitive data with care and caution. The staff should receive proper training and clear guidelines on the ethical use of data, thus placing data protection at the core of the company’s value proposition to customers.
- Customer data transparency – There should be clear statements and policies on how a business intends to use its customer data. Customer data transparency can help build a meaningful long-term relationship between a business and its loyal customers.
- Partnership with reputable payment companies – To avoid creating opportunities for cybercriminals, there needs to be the highest payment security level to assure customers that their private data is safe. Businesses should work with reputable payment companies for any online customer transactions.
- Non-intrusive hyper-personalization – Customers will opt out of personalization the moment they feel a business’s data collection efforts are intrusive. Data collection should be limited to efforts that will empower a business to offer specifically tailored experiences that will actually benefit the customer.
The digital ecosystem’s reliance on data isn’t a bad thing at all. In fact, it empowers and allows businesses to offer their customers what they desire. Doing personalization well depends on how well a business manages its customer data without being invasive and creepy. Consumers don’t mind sharing their data if they can have a positive, tailored experience and as long as they know that their data is in good hands.