“In theory, there is no difference between theory and practice. But in practice, there is.”
The origin and attribution of this quote are unclear, but the truth in it is loud and clear, isn’t it?
Personalization has been the center of attraction for years now. Everyone talks about it, reads about it, writes about it, and as a user – expects it. In theory, personalization is simply ‘delivering a unique one-to-one experience to each user’. That’s it. How simple! But in practice, it is not as plain and straightforward as it sounds. And we understand that.
This post is a humble attempt to acknowledge and recognize those challenges. For, acceptance is always the first step.
At a glance, these are the major challenges that marketers often face.
Source: Digital Marketing Community
1. Data Challenges: Data Data Everywhere…
If personalization module is an engine, customer data is its fuel. And just like an engine cannot run on an empty fuel tank and adulterated fuel can damage the engine, lack of data and bad quality data can impede your personalization efforts.
“We predict that through 2020, silos of customer engagement will be one of the top three leading causes of customer dissatisfaction for enterprises across all industry segments.”
With the humungous amounts of customer data flowing in from so many sources, marketers often find themselves overwhelmed. Here are the most common challenges they struggle with:
a. Huge volumes of customer data
Users are online on multiple devices 24 by 7, creating scores of digital footprints every day. All of this information may not be useful, but it is hard to segregate useful data from useless while tracking and recording. Hence, most marketers end up accumulating huge amounts of data that starts to overwhelm them sooner than later. The pressure to be data-driven further compels companies to focus too much on sourcing new data, without making proper use of what they already have.
b. Bad quality data
According to The Clear Path to Personalization report by Forbes Insights and Arm Treasure Data, 48% of marketers cite data quality as a leading roadblock to effective personalization. By bad data, I mean outdated, irrelevant, and incorrect data. And bad data leads to bad personalization.
Imagine you walk into a furniture store. You need a wardrobe. You ask the salesperson for recommendations. He starts showing you sofa sets. “That is not helping, I am looking for wardrobes, not sofa”, you say. Yet, the salesperson reminds you that the last time you were there, you wanted sofa sets. If you come back tomorrow, he will update your purchase intent in his database and will have the recommendations ready.
Sounds absurd, right?
Although this doesn’t happen in a physical store, scenarios like these do happen in the digital world when marketers base their personalization on bad data.
c. Siloed data
For personalization, understanding the customers is essential. And that requires you to have a unified view of the customer. With data coming from different disconnected channels, applications, and systems, it is quite a challenge to assemble a single source of truth.
Say, a customer browsed for a TV set online, and then went and purchased it from the physical store. It hardly makes sense if the brand keeps sending emails with discount coupons to encourage the customer to make the online purchase. It only indicates the problems that occur due to data siloes.
d. Laws and regulations governing data collection
Since the GDPR regulations came into effect, collecting customer data has been a challenge for companies. The laws forbid brands to collect any data without customer’s consent. Brands have to provide easy-to-understand and access statements on privacy policies to the customers.
Moreover, customers can choose to deny you data. If they do, it will by default mean a certain degree of personalization will no longer be possible. Also, you have to be careful to avoid the severe political and legal ramifications of failure to comply with the laws. As more and more ambiguous data privacy laws continue to be written, what data you can and cannot collect and use, becomes more ambiguous.
2. Segmentation Challenges: Segmentation is the question
Segmentation forms the backbone of personalization, but it is not as black and white as it may seem. Fine and effective segmentation involves nuances and complexities that are rarely accounted for.
With so much data at the marketer’s perusal, identifying which data points to use can be daunting. What if the same users fit into multiple segments? How to assign them? How to know which segments are impactful for them to be in? The fact that these segments are constantly shifting adds to the difficulty.
Marketers often find it challenging to slice the audience into groups that are worth personalizing for in the first place. Without this, spending endless hours of effort in personalization strategies does not fetch results.
3. Delivery Challenges: Real-time cross-channel automation – Easier said than done
Delivering true personalization means offering seamless cross-channel experience in real-time, across the customer journey. It is easier said than done. It requires a perfectly running system in which data collection, analysis, campaign execution, measurement and calibration happens in real-time most smoothly.
With multiple ways to interact with customers through multiple channels, it is a daunting task for marketing teams to keep up. When different teams handle different channels, it is a logistical nightmare to deliver a consistent personalized experience.
Most brands with digital as well as physical stores face this challenge when they end up targeting interested users online when they have already made a transaction in the bricks-and-mortar store. This failure to connect “clicks and bricks” terrifies marketers because such instances negatively impact customer engagement.
So, personalization stands meaningless without real-time cross-channel automation that runs on real-time customer data. This is hard to achieve.
4. Technological Challenges: Spoilt for choice
While personalization is a simple concept – ‘show relevant content to every user’, it is technologically challenging to achieve it. Most marketers who intend to adopt personalization often struggle with finding the right tools that suit their needs. There is no dearth of personalization tools to choose from, and perhaps that makes it harder to pick the right one. Even if they start, the struggles don’t end.
As the number of data sources, engagement channels, and web & app properties grow, they go on adding technology and tools to support it. What starts with a single website, spreads over multiple web properties, multiple channels, social media, display ads, and so forth. It usually leads to a complex mess of disjointed tools and platforms. Keeping them all together becomes overwhelming in no time.
5. Metrics Measurement Challenges: What to measure
Management thinker Peter Drucker is often quoted as saying that ‘If you can’t measure it, you can’t improve it.’ He implies that you cannot know whether or not you are successful unless success is defined and tracked.
Now, personalization is aimed at leveraging long term customer relationships. That requires ‘long-term customer relationships’ metrics to be measured. While knowing how many conversions one particular personalized interaction drove is beneficial, it is a short-term metric. It illustrates what worked for your brand and that you should keep doing it. But since personalization takes some time to show results in the long run, and it is hard to put a number to “customer affinity” or “customer trust”, marketers struggle in measuring the success of their personalization efforts.
6. Balance Challenges: Walking the fine line between helpful and creepy
The whole idea of personalization is to help yourcustomers. But this purpose gets beaten when marketers miss the “too much line” or the “creepy line”. It is hard to ascertain how much is too much because every user has a unique threshold of annoyance and offense. I do not mind if I get 4-5 personalized push notifications a day from an e-commerce brand. However, my friend- of the same age, location, work profile as mine, finds it creepy. It isn’t easy for the marketer to understand the behavior and reactions of every user in so much depth. So, to avoid getting into trouble, many brands prefer staying away from personalization than do it wrong.
Related Read: Is Your Personalization Creepy?
7. Scalability Challenges: Did you say “Personalization at Scale?”
McKinsey & Company has called ‘personalization at scale’ the Holy Grail of marketing.
Scalability is one of the biggest challenges in implementing organization-wide personalization strategy. Delivering one-to-one unique experience to each user means taking the time and effort to craft, assemble, and deliver the huge amounts of personalized content variations tailored for different individuals and user journeys. Also, as digital business becomes more and more sophisticated, the traffic is only going to increase calling for scalability. Personalizing the home page for one segment of users is a simple thing. But it is completely a different game when you have 10 user personas, 15 global regions where your business runs, 20 sites, and hundreds of assets you want to personalize.
8. ‘Getting-Started’ Challenges: Tabula Rasa – The Blank Slate dilemma
Since personalization (if done right) permeates the whole system in the organization, marketers who are planning to adopt it new often get overwhelmed. When you are just getting started, one of the biggest challenges is not knowing what to start from and what to personalize first. This is called the blank slate problem – “Tabula Rasa”.
The degree, type and strategies for personalization vary based on industries. What is ideal for e-commerce or media OTT isn’t appropriate for BFSI or edutech. Since there is no set formula to do it, it deters many brands from starting it all together for the fear of not doing it right or lack of orientation.
9. Organizational Challenges: Personalization is not a solo game
Adopting personalization is a mindset shift. It requires intensive collaboration and involvement of all departments in the organization. Implementing an idea as extensive as personalization requires bringing people out of their apprehensions. Many organizations believe that their business structure is not capable of adopting new technologies and experimentation like personalization. Moreover, multiple teams work with diverse information, analytics, CRM, marketing automation, storage, and other third-party systems. Lack of technical knowhow and common standards makes it difficult to communicate and collaborate. Thus, without organizational alignment, goal sharing, and continuous communication, personalization is a farfetched dream.
10. Management Buy-in Challenges: All said and done, but bosses don’t agree
Imbibing personalization as the very essence of all marketing efforts calls for a shift in perspective. Molding the core strategy into a customer-first approach is a mindset shift. This change requires a technological overhaul, which means huge investments in terms of effort, resources, and finances.
It is often difficult to get a buy-in from decision-makers because the value of personalization can be hard to determine (particularly in the short-term). Personalization is often seen by them as an option, not an absolute need. Besides, they feel that there is a lot of homework that comes with it, a lot of challenges to be faced, and maybe they don’t really need it. Getting a go-ahead from the top management can be a herculean task.
Personalization is Challenging, But it is Worth it
I remember my parents’ reluctance to using a smartphone. They considered it ‘an unnecessarily complicated device’, and believed that life can go on perfectly fine even without it. The idea of learning to use a touch screen device and get familiar with apps was overwhelming for them.
Fast forward to a few years, they can’t thank smartphones enough for making their lives so much easier.
All it took for them to realize the potential of smartphones was to learn how to use it instead of turning their faces away. If they hadn’t, life would have still gone on for them, but they would have remained deprived of all the good things that mobile technology brings into our lives.
A similar analogy holds true for personalization and marketers. If you have started already, but haven’t embraced it completely, or hesitant to begin, then it’s time you get past your fears and apprehensions. Challenges are indeed big, but what the business gets back in return makes all the struggle worthwhile.
Stay tuned-in for the follow-up post about the potential solutions to these challenges. Meanwhile, to understand how can an AI-powered growth marketing platform like Smartech can help you achieve the best results through omnichannel personalization, get in touch.