The personalization problem: Why companies are still getting personalization wrong

While most brands claim to want to deliver personalized experiences to their customers, a recent report found that only 24% feel they’re able to achieve the standard of personalization they’re hoping for. 

That means, in a competitive digital landscape, there's a massive gap between where marketers are and where they want to be when it comes to the reality of personalization, and the delivery of digital experiences at scale.

Although providing highly individualized content and experiences to customers might seem straightforward, especially given the capabilities of modern personalization software, most businesses lack the data they need to achieve that goal. Worse still, companies that try to execute personalization strategies with limited data, often find that their efforts are counterproductive and actually harm customer engagement levels. 

That’s a problem because the cost of poorly executed personalization can be significant. Research suggests that brands can turn off over half of their customers during the shopping experience if their personalized marketing misfires, with up to 44% of customers less likely to buy from them again. 

Brands need to know how to avoid personalization problems — but what does that mean? In this post, we’re going to discuss the cost of bad personalization, and how to avoid it in your own marketing efforts.

What personalization is (and what it isn't)

Modern digital marketing has evolved to value the personalized approach — and, as part of that, the need to use data analytics to drive highly targeted campaigns.

Personalization in marketing is typically defined as a process of tailoring content or an experience to the tastes and preferences of an individual. 

Personalization is typically achieved by marketers using customer information such as demographic, geographic, psychographic, firmographic, or behavioral data to determine what type of message will resonate most with members of their target audiences.

For example, when an individual searches for something on Google, they typically receive different results than other users because their personalized settings reflect their location or their previous searches. These personalized results create a more relevant experience, thereby making it more likely that the searcher will continue using the Google search engine.

So, if personalization is about making a web experience look and feel like it’s been created for you, the user, what is it not?

It’s a good question because brands often misunderstand personalization, and misapply it in their content strategies in ways that are often off-putting to customers. Those misapplications include:

• Showing a customer’s first name in an email.

• Trying to track and store all possible data points.

• Buying data from third-party vendors.

• Changing the colors of website buttons.

True personalization involves creating the best possible experience for every customer — one that resonates by incorporating data such as location, device, audience segment, and so on, in a meaningful way. That effort requires brands to leverage the relevant data in order to develop an understanding of how all those elements interact with each other — and then use that insight to augment content experiences in real time.  

How can personalization go wrong?

If so many businesses understand the importance of personalization, and make an effort to implement personalization strategies, why aren’t more seeing the benefits? 

Personalization can go wrong for numerous reasons, including:

• Implementation of the wrong technology stack.

• A lack of human and financial resources.

• Complexity of data.

• Use of out-of-date or incorrect data.

• Treatment of personalization as a “one-off” chore, rather than an ongoing process.

While any one of these issues may seriously degrade personalization efforts, a combination of them can quickly make a personalization strategy unviable, and even damage relationships with customers. 

The consequences of getting personalization wrong

Marketers typically rely on personalization as a way to make their content resonate with individual customers — and so attempt to show individuals content tailored to things they have previously seen or interacted with. 

When marketers fail to deliver suitably personalized content, customers often notice, and react negatively. That negative reaction may be exacerbated if the personalized content shown is clearly leveraging personal information that the customer was unaware the brand had collected from them. 

Ultimately, the consequence of “wrong” personalization in that way is not simply an increased level of customer frustration (at what may be seen as irrelevant messaging), but a loss of customer loyalty and trust over the perceived breach of privacy. 

Examples of personalization gone wrong

If you've read this far, there’s a good chance you’ve witnessed, or even experienced firsthand, the consequences of failed personalization, or want to find practical examples of how brands can fail at personalization. 

If that’s the case, let’s take a look at some common examples of “wrong personalization,” before getting into some useful tips for avoiding the same mistakes. 

Here are some commonly used examples of personalization gone wrong:

Over-personalization

How many times have you been bombarded with irrelevant offers? If you've experienced this marketing tactic, you’re likely tired of it. It's annoying to see similar offers for a product that you just bought, or to receive an offer that doesn't apply to you anymore.

Some companies still rely heavily on exactly this kind of approach. After a customer visits a website and purchases a product, the brand follows-up with a huge volume of “personalized”  content: company emails, banner ads on other websites, and links to products similar to the ones purchased. 

Data failure

Every time a customer interacts with a brand, whether through a mobile app, website, or another device, the data from that interaction is used to improve the next interaction. The brand may use it to provide more informed and relevant content, personalized offers, and product information that is tailored to customers' needs.

That strategy relies on the brand maintaining reliable, complete, and up-to-date information about its products and services — which means having robust systems, processes, and technologies in place to support data accuracy.

Remember: Information about customers is the lifeblood of personalization. Any flaws in that stored data can, and will, damage the experience, and even repel otherwise-loyal customers. For example, if a customer makes a purchase based on a personalized product recommendation during their visit to your website but when they purchase the item they realize the shipping costs are going to be prohibitive given their location, that data failure will likely damage the customer’s trust in your brand, and potentially push them towards a competitor.  

Name personalization

Getting a customer’s name wrong, using it incorrectly, or even using it unconventionally, in personalized content can be jarring. It’s a personalization failure that many people have experienced firsthand: Customer names are often pulled into automated emails that land in inboxes — and then end up in the junk folder. 

It’s not necessarily just customer names that are used in personalized emails; brands may also pull in company names or product names with the same goal.

Names are a popular personalization tactic because they’re low effort. Or, more specifically, so easy to implement in an automated email campaign: All marketers need to do is insert the [Name], [Company Name], and [Product Name] data points stored on an internal customer database. 

However, that ease of implementation can backfire if the information is incorrect or absent. A marketer might end up automating a “personalized” email that ends up reading: 

“Hey [First Name] [Last Name] from [Company Name]...”

This kind of personalization misfire not only stands out as a transparent error, but has the added negative effect of frustrating email recipients. 

Getting personalization right

Do all of the examples of poor personalization practices mean personalization is useless and that no one should invest in it? Of course not. 

What it means is that companies have to get smarter about the way they approach personalization if they want to win and strengthen their customers' loyalty.

So, how do marketers get personalization right?

Here are nine principles that can help you avoid personalization misfires in the future. 

1. Develop personalization skills

When we talk about personalization, we usually think about how to collect data, which data to collect, the best technology stack, the best way to segment users, and so on. 

We often overlook the importance of humans within that personalization infrastructure. 

The digital skillsets of your content and marketing team members are a key differentiator between good and great personalization performance levels. 

With that in mind, in order to deliver the best personalized experiences for customers, businesses need to invest in people, and build their content teams around the following personalization priorities: 

• Understanding customer reactions to personalization experiences.

• Gaining insight into customers' micro-behaviors.

• Developing a better working knowledge of data and available personalization technology.

• Creating atomized content that can be deployed to address specific customer needs and preferences. 

2. Atomize your content

Content teams often feel overwhelmed by the amount of content they need to produce to cater to their customers’ personalization requirements — especially if they’re expected to demonstrate that their approach to personalization is delivering results. 

To overcome that challenge, marketers need to consider “atomizing” their content — that is, breaking it down into smaller components based on those components’ specific messages or purposes. These atomized pieces of content help marketing teams stay on top of their content creation workflows, and can be combined to contribute to the overall customer experience.

3. Rethink your data strategy

Data fuels personalization and optimization efforts. However, the more data that a brand has to manage, the more likely it is that marketers encounter problems, such as concerns over privacy and data protection.

Faced with that challenge, brands may have to rethink the way they collect customer datasets, or risk losing consumer trust. 

Many brands navigate this challenge by utilizing zero-party and first-party data as their primary methods of data collection. These types of data place control firmly in the hands of the customers (more on this below) who can choose whether or not they share certain details about themselves with companies.

4. Invest in accurate, real-time data

As an extension of the data strategy point above, businesses need to be careful that they’re not just collecting junk data — and can, instead, be confident in its quality and accuracy. 

We mentioned the importance of having up-to-date data earlier: Not only does it help firms implement effective personalization, but it strengthens customer trust. To keep up with that demand for accurate data, companies should (as mentioned earlier) invest more in their own data by opting for zero-party and first-party data collection strategies. 

5. Work with your own data (zero-party and first-party data)

Zero-party data is the data that a customer intentionally and proactively shares with a brand. First-party data is data that a company collects directly from its customers, and then owns. Before diving into these terms in more detail, it’s worth reiterating the following points:  

• Customers appreciate the convenience of personalization so long as their data is secure.

• When deciding whether to shop with a particular brand, customers look for transparency and trustworthiness.

• Most consumers are comfortable with personalization, as long as brands are using their own data rather than purchased data.

• One of the main challenges of personalization for brands is obtaining accurate customer data. 

What does all that mean? Essentially, security, accuracy, transparency, and trustworthiness are the common customer expectations when it comes to brands personalizing their content. 

And, because of those four factors, brands should be prioritizing the collection of their own data — via zero-party and first-party data strategies. 

Both strategies typically deliver data that’s more accurate than second-party and third-party data, and allow brands to leverage their relationship with customers by being open and upfront about their approach from the outset. Even better, because brands are responsible for the end-to-end management of zero- and first-party data, it’s more likely that they can guarantee its safety and security. 

6. Learn the limits and capabilities of your technology stack

Although there will be pressure to generate results on personalization investments, brands should take the necessary time to optimize their personalization technology stack. 

That means understanding the limits and capabilities of the relevant tools, especially if there is no existing in-house team capable of providing technical support. 

The business cases for using personalization solutions may also be uncertain. It takes time to build customer profiles before the efficacy of personalization technology becomes clear. 

Remember: Personalization is a process.

7. Test and learn

One of the first things brands can do to fine-tune their personalization is to test out different content variables.

Content analytics offers valuable insights for brands and marketers. More specifically, content testing and experimentation tools can reveal which media types resonate with specific audiences, and typically require customer data inputs to identify areas where targeted messaging can be most effective.

Content testing, and the data-driven insights that it generates, reduces content strategy guesswork (and the need to rely on anecdotal information) and supports informed decision-making about future marketing efforts. 

8. Start small

It’s unlikely that your personalization strategy will deliver overnight success. It’s going to be much more useful to frame it as a gradual process of improvement. Accordingly, brands should introduce small, incremental changes to their personalization approach to see what works for their audience — and refine from there.

For example, you might start by targeting a single customer segment. By leveraging data, you could start by identifying a segment that provides more value, and then focus on improving the experience for those customers as a way to deliver positive results sooner. 

Don’t try to personalize too many content elements at once. Instead, focus on specific types of content — for example, the checkout process or home page banner. Focusing on single elements will make it easier to test and learn from the results.

After that, you can start scaling your personalization efforts for different customer segments and expand the scope of personalized content to more elements on the page.

9. Consider your customers' journey

The more knowledge brands have about their customers, the easier it will be to provide a relevant experience.

Consider the shopping journey from end to end. A great place to start is mapping the process of how new customers discover brands. For example, when a visitor clicks on links, are they taken directly into personalized content related specifically to their search? And where do these visitors go from there? 

Each step on the customer journey can provide valuable insight that you can use to optimize your personalization. 

The bottom line

Personalization is one of the hottest topics in marketing, but many companies fail to implement it properly — typically because they don't have the right data and the right tools to support their decisions.

In order to create a successful personalization strategy, it’s critical that you take the time to understand how your customers think and what they want from their shopping experience. Gather insight into your customers as individuals, rather than as groups, and then create an experience that reflects the relationship those individuals have with the brand, across all platforms. 

In a competitive market landscape, this approach is critical. Customers expect brands to know them personally, respect their boundaries, and provide relevant content that speaks directly to their needs at any given moment.

And, yes, while personalization isn't easy, and requires time and effort, it’s certainly worth the investment if you can use it to build a loyal customer base that delights in your content. 

For more information on how to do exactly that, why not explore Contentful’s native personalization platform, Contentful Personalization? Powered by AI, Contentful Personalization puts game-changing personalization tools at your fingertips, including testing and experimentation tools to optimize your experience down to the smallest detail. 

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