In an environment where retailers are inundated with data, how do marketers activate that data to craft personalized experiences? Last week, our partner Custora invited Dynamic Yield to participate in an Insight & Eggs breakfast to answer that very question.
During the event, the following leaders in e-commerce and technology sat down to share their expertise during an informative panel discussion on personalization:
Megan Kohout – Sr. Director, Marketing & Customer Segmentation, Club Monaco
Corey Pierson – Co-Founder, Custora
Liad Agmon – CEO, Dynamic Yield (that’s us)
To kick-off the conversation, moderator and CMO of Custora, Kevin Young, posed the following questions…
What is the Definition of Personalization?
According to the panel, personalization involves the ability to create different experiences for different users. It is the layer that sits beneath and contributes to the all too popular (while relevant) lifecycle phrase, “The right message, to the right user, at the right time.”
Additionally, it’s important to note that the foundation for personalization functions across a spectrum defined by audience segmentation.
The Spectrum: Powered by Machine Learning
Broad Strokes = Wider Segmentation ←→ 1-to-1 = Individual Choices
“As a marketer, you can’t think about each and every individual that arrives to your website, visits your store, or downloads your app. You have to think of them as segments in order to create experiences in a scalable way.” — Liad Agmon
Essentially, it’s the job of algorithms and machine learning to influence your segmentation, creating smaller and smaller groups of higher value users and that of an automation platform to execute on decision making.
- 83% of consumers want personalized experiences, but only 23% say that’s what they’re getting
- 95% of retailers believe personalization is a top priority, but only 13% feel they’ve fully implemented the tech to support their efforts
Source: World Retail Congress Study
What are the Challenges to Winning with Personalization?
Megan Kohout of Club Monaco believes it comes down to the right tools and resources.
“To do segmentation well, you have to dig into your data to understand your different customer groups, and that takes a lot of time and resources that aren’t always a part of the team’s at retail companies.”
The Plague of Disparate Tools and Silos
With so many separate point solutions that occupy different pieces of the personalization puzzle, most brands run often into the following roadblocks:
- Customer data siloed within in several point solutions resulting in the lack of a unified/360 degree view of the customer
- Team/organizational silos and friction between tool owners resulting in the inability to action data due to inaccessibility
Referencing an old fable where several blind men feel an elephant and describe their truths, Liad Agmon asserted that until it comes from the top that an organization has to stop working in channel based ways, our efforts will continue to look like this:
Source: Shashikant Joshi
Why is CRM Data the Least Frequently Used in Personalization?
Historically, there wasn’t much to be done with CRM data aside from sending emails.
From her own experience working with CRM data for 10 years, Megan described certain personalization efforts which have been made easy via pixel implementation. But while recommendations based on user activity are low hanging fruit, the time it takes to call that data in order to gain interesting insights for marketing driven purposes is often a different story.
Not to mention the aforementioned silos, along with issues of statistical significance, frequency, and scarcity of data. Often, upon accessing data, marketers find 80% of their records are from users who have only purchased one time, maybe even five years ago. Because of that, focus must be shifted to much smaller segments of CRM data who are high-value users such as repeat customers.
Thankfully, with the emergence of the customer engagement platform, it’s easy to action against specific segments of users across tools in order to drive the meaningful and personalized interactions CRM data has the ability to impact. And most importantly, before it goes stale.
As the cost of acquisition continues to rise and we all compete for the attention of the consumer, economies of scale have begun to force the industry to focus on other aspects of the business. In order to impact bottom line profit, personalization has become the biggest initiative and most critical to survival.
While relatively nascent, it’s evolution in the market will come at an accelerated pace. So, keep a close watch on this new enabler and the companies like Custora and Dynamic Yield who aim to make the field more omnipresent and lead the charge in a bigger play to change the stack as we see it today.
And expect a whole lot of best practices and playbooks on the subject to follow.
Meet the World’s First Personalization Technology Stack
Personalization, Recommendations, Behavioral Messaging, Testing & Optimization in a Single Platform