Companies should be wary of going overboard when implementing a data-driven marketing strategy.
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.
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. For example, don’t tell Mary that your new line of footwear was designed to go along with dress clothes at corporate events, don’t tell John that the line is best for jogging, and don’t tell Margaret that it’s designed to be worn like slippers around the house.
The Universality of Brands
No matter who your customers are and where they fall into any demographic category, their motivations for choosing your product over that of your competitors are almost always the same. This is what we’ve discovered through more than 20 years of exploring the subconscious drivers of customers’ purchase decisions.
According to Harvard Business School professor Gerald Zaltman, 95% of purchasing decisions take place in the subconscious mind. In my company's work with global brands to develop their brand strategy and research their market positioning, we've learned about competitive buyers of hundreds of brands. We discovered that every brand has a network of associations and memories. And these brand networks are remarkably similar among those who buy the product — regardless of age, background, or experience.
Take the office productivity applications market, for example. Our analysis found that IT buyers who use Microsoft Office 365 have a host of positive associations with the brand. Users tend to describe the product line with descriptors like robust, professional, proven, effective, corporate, and good for big companies. There were few, if any, negative associations with the product line — and interestingly, these webs of associations were virtually identical from one Office 365 user to the next.
Microsoft Office users also had consistent takes on Google’s competitive offering, G Suite. They associate it with creativity and document sharing, but they also consider it unproven, young, only good for small companies, and, perhaps most damaging of all, not enterprise ready. The common positive understanding of Microsoft and similar negative perceptions of its competition are what make Microsoft a strong brand.
Since Microsoft users have similar mental barriers about G Suite, there’s no reason for Google to send them different messages. The key to driving growth is to send them content that overcomes these barriers. Getting the same message out there will accelerate the shift in perception that Google needs to achieve.
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As artificial intelligence and automation tools are becoming more commonplace for marketers, the lure of using these for personalization can be powerful. The idea of offering every individual customer unique messaging can entice brand managers everywhere. But simply having the capability to personalize messages doesn’t mean they should be personalized.
Brands build their identity and grow faster with a cohesive message that delivers the same positive associations with the brand to as many consumers as possible across different platforms. It really all goes back to the age-old idea of trying to be all things to all people — once a brand starts to do this, it falls into a trap that experts warn about. Instead of diluting your brand identity through an endless pursuit of personalization, take time to understand your customers and what they value — as these data points often turn out to be priceless.