The problem of personalization

I make my living through personalization,?and we have created a problem

(Originally published in Danish on Dansk Markedsf?ring - https://markedsforing.dk/artikler/debat/debat-jeg-lever-af-personalisering-og-vi-har-skabt-et-problem/)

Don't get me wrong - I'm still a believer - but we still need to be very clear on a few things!

In early summer I read an interesting article on?MarketingWeek?.?The title was “Forget Personalization, it's impossible and it doesn't work”.

To be completely honest, it didn't fit quite well with my professional ambitions and plans.?In many ways, I live by the concept the article was all about killing: Personalization.

Also, I have now been in the senior management team at the martech company Agillic for almost seven years, where personalization is our core business.?I have even decided to write a book on the subject.?But the article made me think: Maybe I should just drop it?

But then I decided to actually read the article. Moving in close, I could see that part of the basis for the criticism was that we do not have the same perception of what personalization is.?The authors wrote primarily from a branding and advertising point of view and did not think it made either financial nor conceptual sense to create one version of a 'brand narrative' for each customer.?I can only agree on that, and I think most people do.?But the more I read on the subject, the clearer it is that much of the debate about personalization is about us not agreeing on what it is.

So who are you to speak about this?

First of all, my name is Rasmus Houlind. I'm the Chief Experience Officer at the martech company Agillic.?I've previously written a few marketing books, most recently "Make it all about me" about omnichannel marketing (listen to it on audible if you're curious :)

In this newsletter, I'll share insights, doubts and realizations about personalized marketing from the work of writing an upcoming book on the subject together with Mattias Andersson, EMBA from Miltton Insights in Stockholm, Sweden and Arild Horsberg from Bas Kommunikasjon in Oslo, Norway.

When you see the money - you believe!

There is no doubt that if you ask, for example, Matas, Egmont Storyhouse or other of Agillic's clients if they think personalized communication works, the answer is a resounding YES.?But at the same time, there is a counter-movement, which the article represents.?I'm also hearing from my industry colleagues overseas about something akin to personalization bashing??It has made me curious.?Because are the critics right??Or to what extent and in what cases might they be right?

At least the criticism has made me reflect more deeply on the subject than perhaps I have ever done before.?What is personalization??What isn't it??When is it (not) the right tactic?

Let's start with the beginning

It all starts with the definition.?What is personalization??The root of the problem is that there is no clear definition of it.

During my research I came across a group of researchers at the University of Lugano in Switzerland (including Tekila Harley Nobile and Nadzeya Sabatini ) who have reached somewhat the same conclusion.?Both scientific reports and industry media talk about personalization based on some implicit understanding of the concept.?They also clearly distinguish personalization from, for example, the concept of customization.?Personalization (of communication) is something that the company initiates.?Customization is a customer-initiated process (hence customization).

As the (working) title of my next book 'Hello $FirstName' also plays on, we have all experienced receiving e-mails with our first name mixed in.

That, I think most people can agree on, is a form of personalization – albeit a fairly modest one of its kind.?(And even one that is demonstrably of no real effect if it stands alone.)

Does personalization need to be explicit?

But what about the situation where an anonymous customer browses?Miinto.com?and is shown the products under menswear in a unique sorting by 'relevance'??I am sure that system suppliers will call this personalization.?Even if it is for an anonymous user and it is not clear to the customer what is happening.?Naturally, it could be even more personalized if the customer is logged in, has bought a few items, and so on.

But does the customer need to be aware that personalization is taking place before we can rightly use the term??And what about the situation where a group of people (a segment) on Facebook is exposed to a specific ad that others don't see?

It could, for example, be multiple buyers of tickets for F.C. Copenhagen (FCK) matches who are shown ads for ticket subscriptions.?Is this personalization??Or just segmentation??Or targeted advertising??Or what if a customer does NOT receive a concrete campaign email from Matas??Is it personalization that you have chosen the customer??Or just segmentation??I would like to encourage us to discuss this in the industry!

Misunderstandings are lining up

The misunderstandings are already lining up, and it doesn't seem so strange that doubts arise about the effect if we can't even agree on the definition.

Is it really so strange that it is difficult to implement personalization projects when we consistently talk about it from an unvarnished and implicit understanding of the concept??And when we can't even agree on this within marketing, is it any wonder that CIOs and CEOs are critical of whether more investment should be made into technology and consulting??The problem for all of us who sell personalization is that the critics are right in some of their criticisms.?If we don't separate things, they will be right about everything.

So I've realized that the book project starts with finding a new industry standard for what personalization is.?Can we find a definition that cuts across inbound and outbound channels??Across paid and own media??That both embraces campaigns and marketing automation??I have set myself that task.

The criticism has its justification

There is no doubt that there is something to be learned from the criticism of personalization.

And I say that, even though I am obviously biased in the opposite direction.?I have been dealing with personalization for almost 20 years, 10 years at digital agencies, and the last seven years at Agillic.?I have an interest in the public attitude towards personalization being that it works.

But if I'm going to be completely honest, I've may even have helped create the problem we're facing now.?Have I stood on various stages and, perhaps presented pretty painted good cases in the field??Yes, of course I have.

When I published my first book in 2015 ('Hvis det handler om mig, s? k?ber jeg!'), which is about Omnichannel Marketing (and thus also personalization), there was almost a 'gold rush' atmosphere in the industry on the subject.

The customer had to be at the center – at all costs!?Personalization was good!?More personalization was even better!

To a certain extent, this hype has not abated – at least not if you browse the websites of various technology suppliers.?They almost make it sound like if you just sign and log in, money will rain down from the sky.?But unfortunately, personalization does not personalize itself.

In my working life, I am lucky enough as to speak often with some of the most talented people in the industry.?In connection with my ongoing book project, I have already met with a number of the smartest people.

Since the summer, I have held four meetings for expert committees and in that connection had visits from top marketing people in Denmark e.g. Kim Jong Andersen , Peter Grothe-Vilsholm Therkildsen Schlegel , Stefan Kirkedal , Dorte Karlsson , Peter Boris Kreilgaard , Karsten Juul , Thomas Obelitz H?gsbro-Rode , Gitte Blemings , Morten Suhr Hansen , Peter Hestb?k , Thomas Lindvig , Martin Bjerg , Camilla ?sterberg Madsen et al.?for round table discussions of this particular issue. Upcoming talks are happening in Stockholm and Oslo during fall.

My perception is that among these people there is a considerably more nuanced picture of personalization as a concept and what it actually requires to make it profitable.?Can you over-invest in tools, consultants and content that should provide a more personalized customer experience??Yes, and especially in such a small market as the Nordics.

How to do it right

We – who believe in and make a living from personalization – need to welcome the criticism.

Going back to the article I started quoting, they are right that personalization doesn't work as well to create brand awareness for Lunar Bank as it does to drive customer lifetime value for Matas.?Secondly, industry sector and go-to-market models entail fundamentally different prerequisites for driving profitable personalization.

But I also believe that there is a need to nuance the criticism.?Here we are back to the need for a definition.?And I have to admit that I don't have it yet.?But I have been confirmed that there is a need for a book that takes up the subject and takes the criticism seriously.

Until now, however, I have reached the conclusion that personalization is about insights and content merging into a higher unity.?Insights have two overall dimensions in relation to personalization.?They can either be about customer segments or the customers' place in the customer life cycle.?Content similarly also has two dimensions.?Content can take the form of either key messages or content feeds (e.g. product or article feeds).

If these four dimensions can be tied together effectively, and it can be executed across communication channels – then you are on the way to healthy profitability.

At least that's where I stand right now.?But I can become much wiser.?And that is the whole point of my research, and of this three-part article series.?If you have any ideas or input, please write to me.

During my research it became clear to me that the authors of the article in MarketingWeek are right about one thing after all.

Personalization is not for everyone.?Because in certain business issues and in certain industries it is more obvious than others.?My next post will therefore be about who should NOT bet on personalization.