Brand managers are under intense pressure to personalize their marketing efforts. McKinsey calls data activation and personalization the heartbeat of modern marketing. Netflix is becoming a global giant by using machine learning to power personalization for customers.
But there’s a big danger to personalization as well. When done right, it can give managers unprecedented access to buyers at the right places and times. But done wrong, it can do long-term damage to any business. It can even destroy a brand.
Through the work of my company, Triggers, in developing branding and growth strategies for Fortune 100 companies, we’ve found leading brands struggling to turn personalization efforts into actual sales. In fact, the more they focus on hypersegmentation — breaking down their prospective buyers into smaller and smaller categories — the more they lose market share.
Turning this around requires a perspective shift: Brands must focus on what makes their customers alike — not on what makes them different.
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Two Kinds of Personalization
To understand the danger, it’s important to start off with a discussion about what personalization in marketing is. While it can be implemented in myriad ways, personalization generally refers to a strategy for leveraging data analysis and tools “to deliver individualized messages and product offerings to current or prospective customers.” A Wharton study put it this way: “Personalization is when the firm decides, usually based on previously collected customer data, what marketing mix is suitable for the individual.”
What exactly do those messages — or that “mix” — consist of? One type of personalization is purely tactical. In this way, personalization can be a great tool. With the help of artificial intelligence and machine learning, brands can discover who, when, where, and how to reach buyers and prospective buyers.
Does John like to do his shopping online immediately after finishing a jog? Will a 10% discount offer today make Mary more likely to buy the shoes she searched for yesterday? Will sending Margaret a new chicken recipe make her more likely to purchase barbecue sauce? By all means, use this data to reach out to prospects at the perfect times on the right platforms.
But don’t try to personalize what your brand stands for — or why someone should buy it.