Succeeding at personalization in a privacy-driven world

Back in 2015 – pretty much the dark ages in terms of digital – I stood up at Social Media Week in Copenhagen and made a prediction: That by 2020, every time we as customers interacted with a brand it’d be on a highly personalized level, informed by transactional, behavioral, attitudinal, contextual and all sorts of other data.

(I had a whole riff on digital being able to deliver the same sort of comforting familiarity as a local Danish shopkeeper – to the mostly bemused looks of the audience.)

Anyway, while my predictions at the time were informed by the advances in data engineering and the increasing sophistication of DXPs such as Optimizely, clearly, I got it catastrophically wrong. Because we’re now in 2022 and while data engineering and the sophistication of DXPs have indeed massively advanced, brands still aren’t really delivering on the promise of personalization.

Think about it: how often does an interaction with a brand feel genuinely personal – not the sledgehammer of segmentation, but something unique and valuable to you?

So why this collective failure?

Well, firstly it’s not due to a lack of ambition. Two years after my doomed Social Media Week presentation, Keith Weed, CMO of Unilever at the time, said this: “At Unilever, we have an ambition to have a billion one-to-one relationships.”

What he meant was that with a supercomputer (i.e., a smartphone) in everyone’s pocket, customer behavior is driven by micro-moments of need. If a brand can anticipate and assist with those needs with personal, relevant content, it becomes incredibly powerful.

Personalization paradox

The thing is that brands were typically built for the masses and this shift to the personal is a huge transition for them: culturally, philosophically, organizationally. And it’s difficult, aligning massive, disparate data sets into a single customer view and being able to leverage insights into relevant personal experiences for customers is no small task. But the tech is there: take a look, for example, at Optimizely’s acquisition of customer data platform Zaius and the increased power it puts into the hands of marketers.

The demand is also there: according to this recent McKinsey report, 71 percent of online customers expect personalization and 76 percent are frustrated when it isn’t delivered.

But here’s the paradox: as customers are expecting greater personalization, they are also demanding greater privacy. Not that surprising given that 2021 was a record year for data breaches, up 68 percent from 2020. In a recent KPMG survey, 86 percent of the respondents said they feel a growing concern about data privacy, while 78 percent expressed fears about the amount of data being collected.

Meanwhile, DuckDuckGo, a search engine that protects users’ privacy, grew by 47 percent in 2021 while Google is following in the footsteps of Safari and Firefox in eliminating third-party cookies from its Chrome browser next year. (No more ads following you round the internet - yay!)

Perhaps most telling, a Gartner survey found that people are more than three times more likely to give up altogether on brands that “over-personalize” versus those that under (or don’t) personalize.

The way through this paradoxical situation, then, is to recognize that customers will still appreciate personalized experiences, but only if they’re executed with the utmost sensitivity and deliver value for them in exchange for the data they give up. Or to put it another way: I’ll happily tell a brand pretty much anything about myself as long as it benefits me to do so.

Leveraging personalization data

That’s why zero-party data is so valuable – rather than have inferences drawn from behaviors, it’s what a customer has voluntarily told you. This means the brand has a great responsibility to deliver something meaningful in respect of that – again, a value exchange. (Online beauty brands are pretty good at this: check out the skincare/haircare quizzes on the likes of Glossier, Function of Beauty and Skin + Me – along with Candyspace’s work with Augustinus Bader.)

The ability to deliver these sort of value exchanges is of course dependent on having the right technologies to effectively transform the data into meaningful personal experiences for customers. But the tech alone won’t do the job: it also requires marketers to think with product mindsets.

Marketers, after all, are now typically the custodians of multiple digital products and the touchpoints through which personalized experiences are delivered. The mindsets and methods of old – large-scale interruptive campaigns, for example – are no longer as effective for today’s hyper-empowered customers. 

A product mindset is one relentlessly focused on delivering value for customers: always on, data-driven, continuously evolving and driving outcomes rather than output. Disruptive scale-ups are inherently better at this and traditional businesses can learn a lot from them.

Take Slack, for example, who put customer obsession at the heart of their business and iterate their product based on constant, real-time customer feedback, and using metrics such as NPS and daily active users to assess their success.

It means not relying solely on marketing analytics tools such as Google Analytics (great for determining how users are arriving at a digital product) but embracing product analytics solutions such as Mixpanel (great for understanding how users are actually engaging with a digital product). And it means embedding a culture of experimentation. Test, learn, repeat.

Personalization value

Finally, remember the humans. And while I’m of no doubt that eventually the AI that can help brands deliver personalized experiences at scale will eventually turn on us and kill us all, for the moment we must remember that at the heart of personalization is human need.

That was Candypace’s starting point for our work with Mars Petcare: a recognition that pet wellness is a universal pervasive pain point for pet owners across the world. We created an AI-driven mobile app that helps those owners monitor the health of their pets, providing content, tracking, diagnostics and individualized lifestyle and diet recommendations.

This is a value exchange: it empowers pet parents with knowledge and reduces their anxiety, while Mars Petcare gains valuable zero-party data to help them communicate even more effectively with their customers.

So, with a product mindset, a focus on human need and the right technology choices, brands can deliver personalized experiences of value to their customers – and work towards those billion one-to-one relationships our friend Keith Weed spoke about. This time, though, I’m not going to make any predictions about how quickly that’s going to happen…

Turn to Optimizely for robust personalization

Our Digital Experience Platform will help you uncover more humanized digital experiences with insights on not only where your customers are coming from, but what action they are likely to take next.