Coming out of the 2021 Loyalty Expo, personalization was one of the top trends mentioned during presentations, the Loyalty360 Awards, and brand-member sessions.

Recently, Loyalty360 hosted a brand-only digital roundtable focused on personalization, allowing brands to share their perspectives, feedback, and ask additional questions on the topic.

Among the issues the brands discussed:

  • How to improve personalization, and ways to define personalization.
  • What best practices a brand should follow.
  • How to navigate privacy regulations and legislation that impacts their ability to collect customer data.
  • Devising preference centers, where consumers can pick frequencies and the type of information they want to receive.
“For any size of brand, working at any scale, personalization is table stakes,” says Tom Madden, Managing Partner for Loyalty and CRM at ICF Next. “And that doesn’t just mean a name in an email.”
Loyalty360 spoke with several industry leaders in the supplier and technology segment to gauge their feedback — and best advice for brands — going forward.

Improving and Defining Personalization
More brands are looking to improve on personalization. For Clarus Commerce clients, the personalization and relevancy of communications have moved up in priority – in some cases even higher than program profitability.

“Has the definition changed? Not really,” says Carlos Dunlap-Beard, VP of Loyalty Strategy for Clarus Commerce. “But the importance of personalization of communications that is more relevant to consumers is critical to cut through the clutter of the thousands of messages they are bombarded with daily.”

Donald Smith, Senior Managing Director for Strategy and Chief Analytics Officer at Brierley, thinks most brands with whom they engage aspire to hyper-personalization.

“Prescriptive analytics provide brands with a forward-looking approach to loyalty by understanding customers’ intentions and anticipating their future need states,” Smith says. “Facilitating this level of hyper-personalization becomes a powerful tool in engaging with a brand’s most loyal and valuable customers in ways that delight them without feeling intrusive and disconcerting.”

Dominik Von Jan, Executive Strategy Director at Iris Worldwide, says personalization is seen as a tool to create relevance and not waste the audiences’ time. Most of their clients use personalization to serve up email, web, and social content to audience segments with clearly definable needs, interests, and pain points.

“So less informed audiences receive more basic educational content to turn them into more informed customers and remove nervousness,” he says. “While more informed audiences are served up more specialist content, showing them that the brand understands their customers know their product category and they want to behave like a trusted partner.”

Oliver Mitchell, Vice President of Sales at Brandmovers, sees the biggest challenges regarding personalization as organizational data silos and fragmented distribution channels operate; they create gaps that can compromise a Single Customer View (SCV) and hinder relevant and timely personalization.

“Loyalty programs can bridge these gaps and create LTV for brands, but only if they are a key part of the customer journey and an integral part of the martech ecosystem,” Mitchell says.

Natasha Janic, Senior Product Marketing Manager for Loyalty Management at Salesforce, says consumers expect personalization across every interaction they have with a business, so companies have had to redefine personalization not just as a marketing tactic, but think about what it means across customer service, sales, and in-person interactions.

“Based on our research, personalization has made a transition from being a goal to being a baseline expectation, so having a unified view of every customer is more important than ever,” she says.

Bindu Gupta, Head of Loyalty Strategy Consulting at Comarch, says the definition of personalization has undoubtedly evolved over the last year. It is not just about using the right data points to drive all customer touchpoints but also about establishing trust and confidence with the customers on "why" brands need this data and "how" brands will use this to create a more seamless and positive experience for them.

“Our clients are focused on creating personas and not just segments to achieve this goal,” Gupta says. “In addition to that, they are also focused on investing in the right technology stack which will help them bring this to life in the best possible way.”

Dave Andreadakis, Chief Innovation Officer at Kobie Marketing, says the pandemic and events of the last year have undeniably accelerated digital transformation. Still, it is not the flame that started the fire.

“Digital acceleration was already in fruition, and with that comes the urgency and importance of personalization,” he says. “Instead of pushing the specific interaction we want, we hold our consumer’s hands and guide them where we want them to go.”

Paige Schaffer, CEO of Global Identity and Cyber Protection at Iris Identity, says that as a provider of identity and cyber protection — which, by its very nature, is a deeply personal product — they have put personalization at the top of their priority list.

“Knowing that our end users must feel comfortable enough to enter personal data to be monitored or their Social Security number to activate credit monitoring, personalization of our platform is fundamental to the user experience,” Schaffer says. “It helps drive engagement, enhance customer trust, and creates an environment that strengthens customers’ sense of security.”

Justin Richie, Chief Data Officer at Capillary Technologies, suggests the inflated expectations from several years ago have tempered significantly, and brands are adapting to more realistic expectations.

“Hyper-focused targeting exercises have not led to the ROI brands wanted and went back to the drawing board. COVID also accelerated digital acceptance,” he says. “Personalization has enabled brands to create a more intimate relationship with their customers through traditional engagement tactics like past purchase behavior and email activity with specialized offers.”

Nearly all the suppliers agreed that brands should be defining personalization a bit differently going into 2022
Toby Hawkes, Senior Account Director at Iris Worldwide, says brands should experiment more with finding the right depth and refinement of personalization. Break segments into smaller groups, treat them with targeted content, tactics, and channels, and track where the right point of engagement differentiation lies.

“Personalization can go too deep and become inefficient, and it can also be not differentiated enough and leave opportunity for more relevancy on the table,” Hawkes says. “Finding that sweet spot is what we are helping our clients with as the next step on the personalization journey.

In 2022, Smith says brands should emphasize balancing customer advocacy (non-transactional messaging, product facilitation, and delivering moments of delight) with driving relevant, desired purchase (and next best action) behaviors.

“Primary emphasis should be placed on building an authentic, personalized marketing narrative,” he says.
Richie says that customers are more aware of retargeting and "custom" offers that create a sense of false authenticity via personalization, and brands should look to provide a more catered relationship.

“An example of personalization is a brand offering recommendations like when a person buys a pair of hiking shoes online; the brand sends emails on recommended trails,” he says. “Customers want brands to invest in them as much as they have invested in the brand.”

Personalization means different things from brand to brand, says Iris Identity’s Schaffer. And it has to; otherwise, brands would fail in providing a unique experience if their personalization efforts equated to nothing more than the status quo.

Andreadakis says brands who will hit the nail on the head with personalization in 2022 are those who ask, “So what?” one more time when understanding and analyzing every crosstab of their consumer data.
For example, Andreadakis says you have a consumer, and you can predict when they’re likely to put two types of products in their cart, when they’re likely to purchase, or when they're likely to attrite.

“That’s essential, but there’s a difference between knowing consumer habits and understanding consumer habits,” he says. “Why are they putting those items in their cart? Why did they make that purchase? Shifting from ‘How can I stop them from leaving?’ to ‘Why did they leave?’ so we can better personalize recommendations in the next go-around.”

Madden says the biggest challenges he sees regarding personalization is customer expectations continue to rise, fueled by the digital acceleration amid the pandemic, and brands are challenged to meet those ever-evolving demands with increasingly personalized, innovative experiences and messaging.

“But these elevated expectations are coupled with increasing hesitancy from consumers when it comes to sharing their data to power those experiences,” Madden says. “Concerns around the increase of fraud and identity theft have many consumers thinking twice about sharing their personal information.”

Finding the Best Practices and Avoiding Bad Ones
The suppliers surveyed by Loyalty360 say there are several best practices that brands should follow and some things that brands should avoid because they may not be working effectively.

Gupta says that brands that focus on a data-driven approach are on the right path to personalization; however, sometimes, this means missing the emotional elements.

“The one ‘must-do’ for brands to focus on next year should be ramping up their customer service efforts through all the relevant channels and incentivizing customers to provide them feedback or gather zero-party data that helps gauge their emotional quotient,” she says.

Janic says brands should be purposeful with the type of personalization they're delivering. The first question brands should be asking themselves is, "Will this effort improve my customer's experience?"

“In addition to that, always make sure that it's very clear to the customer where and how you've gotten the data you're using to deliver on personalization,” she says.

Dunlap-Beard says that, even with all of the data capture and technology that powers customer loyalty programs, brands continue to struggle with personalized messaging to program members, as well as their entire customer base.

“When members get generic messages and offers, they land with a forgettable whimper,” he says. “My advice to these amazing brands would be, please marry your CRM/CDP to a dynamic campaign management engine and show your customers that you see them, you hear them, and you care about them as individuals with unique likes, needs, and lifestyles. Be amazing, and your customers will return the love.”

Richie says that emails pretending to include personalized offers are wholly overdone, and many customers are now immune to these campaigns.

“A better offer mechanism for personalization is to provide more customer-focused recommendations powered by artificial intelligence,” he says. “A tactical example for ‘to-do’ is when average open rates by time of day and the average time between opens for a brand.”

Brierley’s Smith says too many brand marketers attempt to boil the personalization ocean. Brands feel legitimate pressure to fulfill their end of the relationship contract: leveraging customer data to deliver highly personalized marketing reflective of customer interests, preferences, and need states.

“A top priority in this mission is anticipating and guiding program members to their next best actions,” Smith says. “But this focus on data-driven prescription can quickly become unwieldy, with marketers attempting to propagate too many recommendations, offers, experiences, and calls to action.”

Von Jan says to understand that most brands have been on a personalization journey for a few years and will continue to evolve. He says trying to jump to a highly developed vision rarely works – a series of well-thought-out smaller wins is the route to progress. It provides a reason to celebrate, evidence for building business cases – and a host of great learnings.

“Be clear about what you are trying to do,” he says. “Are you looking at a holistic, personalized experience that drives engagement, or are you really talking about driving one-off transactional CRO?”

Navigating Privacy Regulations and Legislation
Many suppliers are advising clients on navigating privacy regulations and legislation that impacts their ability to collect customer data, track KPIs, and personalize communications/experiences.

Richie says GDPR and CCPA have changed how data is collected and how customers receive messages. Many companies have to employ an "opt-in" program rather than "opt-out" or face significant fines.

“KPIs have not changed, but it has put more pressure on establishing a more intimate relationship with customers and growing source of new potential customers through more organic methods,” he says.

“Additionally, funnel metrics like converting potential customers into actual customers require personalization to help speed up conversion rates and brand loyalty.”

Hawkes says Apple’s iOS privacy changes are something most of their CRM clients are concerned about. Apple’s new handling of marketing emails means that open rates are not a reliable measure anymore - for users of Apple Mail, at least.

“As a first step to avoid data errors, we advise our clients to suppress Apple Mail email opens and only use non-Apple email opens from apps like Gmail and Outlook,” Hawkes says. “In addition, we recommend focusing more on Click-to-Open Rates to understand the engagement level with emails.”

Andreadakis says that there needs to be a balance between the brand and the consumer as data and privacy measures continue to change. “Two things must happen for brands to nimbly navigate privacy regulations and legislation,” Andreadakis says. “First, brands need to have a compelling value proposition that makes consumers want to listen to what they have to say. The second thing is finding where they can collect data through an exchange - enter the beauty of a loyalty program.”

Setting Up Preference Centers that Work
Regarding preference centers — where consumers can pick frequencies and the type of information they want to receive — suppliers had some definitive advice for brands on setting these up.

Andreadakis says that as consumers, we change our minds based on the circumstances and environment we’re in.

“Preference centers can fast forward an understanding of what consumers want and where, but they can often be inaccurate in terms of what the consumer actually wants in a specific moment or time,” he says, using the travel industry as an example.

Schaffer suggests preference centers aren’t for every aspect of every product, and “they make sense where they make sense.” As for communications, she says customers should, of course, be able to choose the frequency and type of information they receive – but there have to be some limitations.

“For example, we offer our customers the ability to select how they want to receive alerts by type of alert: do they want them by SMS or email and do they want a monthly risk email?” Schaffer says.

Von Jan says for the right brands and to be done correctly, preference centers can enhance the CX and make email operation much more efficient — just don’t get it wrong.

“Firstly, don’t confuse a preference page with an unsubscribe page,” he says. “If your brand has a broad product and experience offering, a preference center works well to showcase what you do and gives the opportunity for the customer to explicitly tailor the content they receive — no algorithms or guesswork needed.”

Consumers are receiving more communication from brands than they ever have before, Janic says, and they increasingly want more control over who accesses their data.

“I think it's really important to introduce a preference center to ensure that you're delivering the right message, to the right customer, through the right channel,” she says. “It's easier than ever for consumers to switch brands, and receiving a push notification when they want an email can be damaging.”

Capillary Technologies’ Richie advises the best method is to look at the average open rates of campaigns and dynamically adjust to their cadence—personalization isn't about the timing of the message, but the right message itself.

“Personalization puts more emphasis on quality and not quantity,” he says. “If customers have to adjust their campaign frequencies, the personalization program has already likely failed. Overall, preference centers are a slippery slope - but always allow customers to opt-out whenever they want.”

Madden says if he could offer one piece of advice for a brand as to how to increase the efficacy of their personalization efforts, it is to make sure they are investing their time and resources in the right personalization efforts.

“There is a lot of talk in the market – you need this technology solution, then you need another one, then another – it can make for a lot disparate, siloed views of your customer if it’s not done with the right loyalty and CX strategy as a foundation,” Madden says. “Your strategy should drive your chosen technology, not the other way around.”
 

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