How companies can personalize marketing without becoming invasive

Consumers have become accustomed to receiving personalized emails and product recommendations from retailers, as well as video suggestions. But now businesses are using intelligent technologies to deliver hyper-personalized interactions, marketing and products or services tuned to each individual’s preferences and needs, to a point that some consumers find it intrusive.

Princess Cruises, part of Carnival Corporation, set an ambitious goal: make every guest feel as if their cruise has been engineered to satisfy their personal needs and preferences.

To do this, Princess is piloting its Ocean Medallion technology with guests aboard Regal Princess. The program provides select passengers with a wearable disc, which interacts with thousands of sensors as those passengers move around the ship and selected cruise ports. The medallions capture real-time data about passengers’ behavior, which Princess uses to deliver a custom experience.

“Hyper-personalized experiences are unique, emotionally engaging and life-changing, so Ocean Medallion uses data and the xIoT (experience Internet of Things) platform to actively learn individual guests’ needs, wants and desires to build continuously evolving ‘guest genomes,’” said John Padgett, Carnival Corporation’s chief experience and innovation officer. “These genomes will provide crew with the vital insights they need to proactively invite them to participate in experiences that align with their desires.”

The Ocean Medallion program makes Carnival Corporation one of a growing list of companies exploring hyper-personalization. Approximately 80 percent of consumers are more likely to use companies that offer real-time personalized experiences, global marketing agency Epsilon found in its 2017 report, “The Power of Me: The Impact of Personalization on Marketing Performance.” But how far can companies go with personalization without infringing on consumer privacy?

MORE THAN A BUZZWORD

“Most companies are focused on maximizing operational efficiencies to increase profits, so they deliver one-size-fits-all customer experiences,” said Blake Morgan, customer experience futurist, author and keynote speaker. “But customers want personalized interactions because they’re sick of wasting time watching irrelevant ads and reading immaterial product recommendations. Customers’ time is precious, so they’re more likely to come back to companies who respect it by offering hyper-personalized experiences that are always relevant to them.”

66% of consumers would share personal information if it remained secure and if they got something in return.

2017 ACCENTURE STRATEGY REPORT EXCEED EXPECTATIONS WITH EXTRAORDINARY EXPERIENCES

While 96 percent of marketers recognize the business and customer benefits of hyper-personalization, just 30 percent claimed to offer good personalized experiences, research consultancy Researchscape International and personalization software provider Everages reported in 2017. A common hurdle, the companies found, is not having the technology to capture and analyze multiple sources of data to form a ‘universal truth’ about each customer, one that continuously evolves in lockstep with their evolving preferences.

“Previously, companies used insights about customers’ past behavior to personalize the experience, but now they’re relying on artificial intelligence (AI), internet of things (IoT), machine learning, deep learning and analytics tools,” said ShiSh Shridhar, Microsoft’s Retail Industry lead for data and analytics. “Machine learning and AI allow companies to find patterns and links between the separate bits of data they collect so they can understand what factors drive each customer to use their services or buy their products. They can then use these insights to hyper-personalize interactions in real time.”

Entertainment streaming service Netflix, for example, uses deep learning to suggest films and TV series to its subscribers based on their viewing behavior and preferences. By doing this, Netflix can increase the value of inexpensive titles and thereby save an estimated US$1 billion on content spend.

Meanwhile, music, podcast and video streaming service Spotify increased its paid subscribers from 30 million in 2016 to 71 million in 2018 by using AI and deep learning to provide each user with unique daily and weekly playlists that are hyper-personalized to reflect their preferences and listening behaviors. Spotify has even teamed up with Nike to create playlists of songs with beats that match the users’ running paces.

FIGHTING DATA-SHARING FEARS

Following revelations that major organizations, including Facebook and Google, have sold customers’ data to third parties without their knowledge or consent, some consumers are increasingly hesitant to share personal data. Technology and media research firm Tech.pinions, for example, found that almost 10 percent of US Facebook users have deleted their accounts in 2018 alone.

However, 66 percent of consumers would share personal information if it remained secure — and if they got something in return, Accenture Strategy reported in its 2017 study “Exceed Expectations with Extraordinary Experiences.”

“Companies must be completely transparent about what information they’re collecting and how they’ll use it to drive value for customers,” Shridhar said. “For example, customers are happy to continuously share location and payment data with global peer-to-peer ridesharing company Uber because they know they’ll find a ride within minutes, whereas the whole process would be longer and more inconvenient if they didn’t.”

PUTTING CUSTOMERS IN CONTROL

When customers share data, futurist Morgan said, they also should be given the choice to opt in or out of hyper-personalization. “To be relevant and provide value, brands must identify exactly what each individual does, or does not, want to receive from them,” she said.

“For example, many people find it weird when brand advertising infiltrates their Facebook feed. So, by making it easy for them to opt out, companies can create an experience-led business that adapts to customers’ different comfort levels in real time.” Carnival Corporation, for one, is reaping the benefits of giving guests choice and control over sharing their personal data in return for hyper-personalized experiences.

“Our Ocean Medallion cruise experience revolves around guests sharing their information, but they’re incredibly enthusiastic to do so because they recognize that insights from their data are being reinvested to benefit them as unique individuals,” Padgett said. “The key is to design every element of hyper-personalization to specifically benefit the guest and allow everyone to choose their level of participation – no one on board is required to have a connected cruise.”

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