The success of recommender systems has rescued personalization from the scrapheap of technology fantasies. 1:1 was really exciting in the mid-90s, and lots of otherwise stable and rational people threw money and time at it. It didn’t work, and personalization became a four-letter word, one that didn’t shock so much as engender pity for the clearly delusional. Since 2008, when commercial recommendation services began delivering high quality product and content recommendations, the P word is once again legitimate.
In fact, personalization is becoming pretty hot again. How can I tell? More vendors in more technology domains are offering personalization solutions. Toss in a few references to big data and retargeting, and you’ve got yourself an irresistible product. Vendors are touting the following as personalization solutions:
• Web analytics
• Enterprise marketing management
• Product recommendations
• Content recommendations
• Email retargeting
• Ad management
• Testing and optimization
• Predictive analytics
• Big data, data warehouse
• Audience analytics
• Automated behavioral segmentation
None of these is a personalization solution. Believing that any vendor or solution will deliver personalization is the Sinkhole of Personalization.
Avoiding the Sinkhole requires only a healthy skepticism and grasp of this key concept: Personalization is a strategy, not a product.
Recommender systems brought personalization back into vogue because they do indeed personalize content for visitors. Recommendations are pretty easy to deploy on a web site. Recommendation is a technique used to select the most effective content for a specific visitor to a site at a moment in time. You can use a cloud-based service to put recommendations on your web pages in a matter of days. With a modest amount of attention, you can discover how to use recommendations quite effectively. You’ll almost certainly increase conversion or revenue or engagement by double digit percentages. The path is well-travelled, the steps proven. It’s a machine: pour in the ingredients, the finished product predictably pours out.
Personalization is a strategy for increasing customer loyalty, acquisition, engagement, or value. It is not a cloud based service with a proven path. The path varies for every organization, depending on their customers, goals, products, and vision. It’s not clear what works, for whom, in what situations. Currently, every organization working on personalization is building their own platforms and processes. Personalization, if is an engine, is a Rube Goldberg, an artisanal construction. Pour in the ingredients, then take bets on what happens.
Organizations making progress in personalizing customer experience have a few elements in common. Their personalization strategy is aligned with business strategy; the stakeholders around the organization are involved; and processes and experiences are continually improved via experimentation and rigorous evaluation.