Rethinking Personalization

By Geoffrey Moore

Author – The Infinite Staircase: What the Universe Tells Us About Life, Ethics, and Mortality

Personalization was one of the leading rationales for companies investing in digitalization.? The idea was that you were going to delight your customers by proactively offering them goods and services they were predisposed to want.? This would create customer loyalty, increase their lifetime value, spur word-of-mouth endorsement, drive up NPS scores, and solve world hunger.

OK, not so much.? A decade or more in, it’s time we ask ourselves, what is the real value of personalization, and how should we allocate our future investments in it?? This begins with getting ourselves onto the right playing field in the first place.? Personalization has different dynamics depending on whether your enterprise is B2C, B2B2C, B2G2C, or B2B.? Here’s how it plays out.

B2C

Let’s face it—as consumers, we are tired of personalization in its current form.? It isn’t really personal, it is just an unending barrage of retargeted advertising that works statistically but not psychologically.? Despite all its promises to the contrary, it is not in fact delightful.? So, best to take all that language about delighting our customers and throw it in the trashcan.?

Instead of looking for delighters, we should be examining our hygiene factors.? These are the things that annoy customers most when they go awry—late shipping, lost luggage, long hold times, rejected passwords, tedious surveys—you name it.? Getting hygiene right is hard, but doing so consistently drives brand loyalty through the roof—just ask Amazon.? We love what they do so much we subscribe to them!? The point is, the things we love are not personal, they are institutional.? Amazon has invested enormously in systems that set expectations through timely communication, early anomaly detection, instant alerts, and the like.? This is not marketing, it’s logistics, but it is personally delivered, and we feel empowered in a highly differentiated way.? (BTW, note to Amazon—you are increasingly over-monetizing your landing pages with sponsored ads, thereby eroding your most valuable asset.? You need to set limits and stick to them.)

B2B2C

Rethinking personalization creates a whole new wave of innovation for B2B2C companies to pursue.? Instead of optimizing for clicks, help your customers better detect signals.? To be fair, some of these could be buying signals, and they should be used to drive consumer traffic along existing lines.? But machine learning is also extremely effective at monitoring hygiene factors wherever there is log data to exploit.? Omniture was an early pioneer in using this technology for website optimization, and now with generative AI you can let your customers’ websites ask visitors what they are interested in seeing instead of playing whack-a-mole with their best guesses.

The point is, no company is happy with their website, ever—and frankly, for good reason.? They are just too hard to navigate, too much about themselves, not enough about the customers and prospects they are there to serve.? By focusing on hygiene factors rather than delighters, this can be changed.

B2G2C

OK, when it comes to dealing with government services, no one is really thinking about delighters.? Nightmares, on the other hand, do come to mind.? Once again, it’s all about hygiene factors.? The services that are being offered meet real needs.? It’s the obstacles that systems and bureaucracies put in the way of citizens seeking those services that drive everyone crazy.

The fastest way to cut through this mess is to embrace the adage Time is money.? The goal is to relentlessly optimize for reducing latency while at the same time reducing fraud as well.? This requires the very best in ML and AI, but those resources are available today, and there are plenty of socially minded entrepreneurs who are ready to put in the hard work to make them scale.? The core metric of success is time to closure, the tracking of which will be no mean feat.? One consequence of its success, to be frank, would be a reduction in bureaucratic employment—not just to free up more money for social services but rather to expedite transaction processing throughout the system.? My hope would be that impacted agencies could redeploy their workforces into the field where face-to-face personal interaction actually can make a powerful difference in the moment.

B2B

One question that bugs the you-know-what out of CEOs of successful global enterprises is, Why do our customers keep telling us we are hard to do business with?? Of course, the answer is because they are.? The real question is what can they do about it?? Here are some low-hanging-fruit places to start:

• Disintermediate your salespeople from replenishment transactions.? Instead, empower customers to transact on their own behalf through digital self-service portals.? And extend the same courtesy to partners who are acting as agents on behalf of their customers.
• Attack the long tail of your SKUs.? Not only do they entangle your salespeople in majoring in minors, they confuse the heck out of your customers.
• Stop imposing buying risks on your customers and take them upon yourself instead by tokenizing bundles to allow for swapping out unconsumed portions and truing up on overused ones.
• Invest in customer success initiatives that build relationships higher up in the customer organization, leveraging thought leadership marketing, customer health scoring, and executive sponsors focused on deep listening.? Customers can tell you what they really need from you if you’ll let them.

Here as elsewhere, the goal is not to delight the customer.? Customers don’t want to be delighted.? They want to be served—thoughtfully, reliably, and economically.? Remember, it’s not about you.? It’s about them.

That’s what I think.? What do you think?

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