Most people want to feel special and unique when considering a purchase or transaction. They want to be recognized, catered to and treated as individuals with specific needs and requirements. Personal touches have long been a tool to motivate buyers, and they can mean the difference between selecting one company, one brand or one product over another.
Today, advances in technology and digital innovation has greatly accelerated what’s possible when it comes to personalization and the customer experience. But, with each innovation, customer expectations rise. To remain competitive and in front of the curve, companies are racing to make personalization the centerpiece of their product and go-to-market strategies. This means linking the virtual world with brick-and-mortar, changing internal operating models and becoming highly proficient with data. Personalization is no longer an option, but a necessity to be able to compete for the hearts and minds of increasingly discriminating and demanding buyers.
A new playing field driven by data
Tapping into people’s purchasing emotions through personalization is nothing new. Successful salespeople have been applying this simple understanding for competitive advantage for centuries, well before the onset of technology and mass marketing. They research their customers, learn as much about them as they can, and relate to them personally while addressing and meeting their needs.
The digital age of personalization expands upon this simple, proven concept by adding exponential depth, sophistication, reach, and scale.
Now both business-to-business and business-to-consumer companies are competing on a new playing field characterized by delivering better personalized customer experiences driven by data. In markets for commoditized products and services, personalization has forever changed a landscape where price and brand formerly dominated. Today, superior personalization can allow an innovative start-up to differentiate themselves and challenge an established brand by attracting and winning customers. And importantly, they don’t have to make price concessions to succeed.
Competing through personalization is impossible unless a company can collect, analyze, and act (most often instantly) on data emanating from many disparate sources, internal and external. “Big tech” has taken notice of the high-stakes in the personalization game and are making big bets on its future – and in turn, investors are making big bets on them. When money flows into a market, you can be sure it’s real, and interesting transformations and disruptions are about to happen.
Personalization: The next “investable theme”
Jim Cramer, of CNBC’s Mad Money, recently illuminated this in a segment of his program live from San Francisco in late September. He interviewed some of Silicon Valley’s most prominent tech leaders on the subject, and here’s how he summarized those conversations. “The ability to personalize a product to your preference is the next major theme of the world's digital revolution. The investable theme everybody's talking about right here, right now? Personalization. It's everywhere.”
Cramer illustrated some examples. A recent Apple Inc. and Salesforce.com partnership will allow Marriott International, a Salesforce user, to leverage Siri for greater personalization of guest experiences. Marc Benioff, CEO of Salesforce.com, explained to Cramer how Marriott customers will soon be able to ask Siri to adjust room lighting and temperature through the Marriott app.
Similar personalization capabilities are underway at the Coca Cola Company, Nike, Inc., and other giant consumer brands. Hewlett Packard is using its expertise in data and printing to make custom labels for consumers of Coca Cola products. “It’s been a home run, giving Coca Cola a real competitive edge in an admittedly tough business where taking market share is everything and a pie that's not growing like it used to,” Cramer said.
Nike is allowing consumers to digitally customize their sneakers, for both fit and individual style preferences. “I’m not speaking anecdotally here — this is empirical. On Nike's latest conference call this week, the word ‘digital’ was used — get this — 59 times,” Cramer said. “Ultimately, for Nike, it’s about becoming more personal at scale” through digital capabilities.
Building a path to personalization
What’s evident in these examples is that using data to deliver better customer experiences through personalization is expanding into all segments of business and industry, and the number of applications and use-cases appear infinite.
Technology platforms and AI-driven data and analytics are necessary tools of the trade, and investments in technology and new technical skills will be required to compete. There will be plenty of options to consider, as the tech community is poised to make personalization a bellwether growth initiative for their businesses.
Underpinning any personalization strategy requires building substantial expertise in what McKinsey & Company calls “data-activated marketing”, defined as actions “based on a person’s real-time needs, interests, and behaviors.” Many companies initially fail to leverage all of the benefits of technology because they miss the critical success factors required to build an effective strategy: a customer-centric operating model and a rigorous, continuous, outside-in, 360-degree view of their customers. A customer-centric operating model breaks down traditional organizational silos and focuses every department in teams with laser-like precision on meeting identified needs within their customer’s journeys.
If you haven’t thought about your company’s personalization strategy, it’s time to get started. Personalization is real, growing and will have a profound effect on your enterprise’s success in the foreseeable future.
As Cramer put it: “There's a clear takeaway here …and that is: Get digital and get personal, fast."