Recommendations went mainstream in 2012. Personalization is still in the hands of early adopters. In 2013, the early adopters will figure out personalization, so that in 2014 the personalized customer experience can go mainstream.
Vendors in the recommendations space sell personalization, but in 2012, they were delivering recommendations. Their technology supported personalization, but their clients’ organizations could not.
Recommendation systems went mainstream rather quickly because recommendation services are rapidly deployed, narrow in scope, easily justified, and well understood. The services include capabilities to track the effectiveness of recommendations, so their value is quantified. Recommendation services definitely pay for themselves, boosting revenues by as much as 10% on retail sites. Recommendations can be deployed narrowly, for example, just on product pages. The decisions and actions to manage recommendations often belong to a single department or even a single person. This is one big reason that recommendations can be effective without formalized processes, metrics, and strategy. Recommendations are in such broad use that best practices have been identified and published.
Personalization is a much harder nut to crack. Personalized customer experience potentially touches every department, and decisions and actions affect everyone. Progress requires broad consensus. Decisions and actions are taken not by one department but by a committee. Best practices, or effective practices, have not been discovered. Early adopters get pretty pumped if they can figure out just plain “next steps.”
Without a personalization strategy, that consensus can’t be reached. Goals are unclear, measurement is not connected with business results. Without formalized practices, the committee can’t achieve plans. Skills can’t be identified and developed. Without best practices and methods for personalization, it is an uphill battle to adjust existing practices for testing, optimization, user experience design, usability testing, brand marketing, advertising… you get the picture.
The early adopters have been working out the answers to these problems. When these leaders figure out how to make the most of personalization opportunities, they will take a quantum leap ahead of the rest of the pack. They will extract 1,000 times the value that their experiments have so far produced.
The rest of the pack will follow, from a few months or years behind. The leaders will enjoy their lead, and greater value from personalization strategies and technologies, for some years to come. Knowing what to do is a big leap. Being good at doing it, well, that’s a quantum leap.
So the model for personalization is emerging. 2013 is the year the leaders will develop the models that will extract the value that the strategy and the technologies promise. I’ll be sharing their learnings in this blog.