DM Magazine Interviews François Gaumond of Relation1
DM Magazine (DM): Outline the evolution of customer personalization over the past 30 years
Francois Gaumond (FG): Personalization has been around as a concept forever, starting with your local storekeeper who remembered your name, what you bought and your favourite past time. The issue is that this model is not scalable: it works only when you have a small shop with key employees that stay around for a while and who can keep notes and/or remembers each customer. Today, in a fast growing environment with a lot of employee turnover and with high volumes of interactions and transactions it’s impossible to achieve that kind of personalization without the use of technology.
What marketers have been doing is to segment people and try to bucket them into groups with shared attributes and then communicate and interact with them based on that. But by doing so we lost that personal connection, the real understanding of the person itself and started to talk to the average. But no one is the average.
Today, we have even more information that the storekeeper used to have. We can track every customer interaction and really understand each of them and recognize what they like and what they don’t, so we can remove the segments and be able to scale that personal touch.
As this personalized shopping experience evolved to broader scale marketing, it became more commonly referred to as 1:1 marketing. Fast forward 30 years, and what’s old is new again. Today, 1:1 marketing, now commonly referred to as personalization, is powered by the enormous amounts of data and the plethora of tools, like those using artificial intelligence (AI) we have to collect, analyze and turn it into insights we can use to better serve customers. So we can serve each one with the proper offer, content or product on the channel that they prefer depending the context. The context is influencing what will be served up. As an example, someone walking into a store would not be in the same context as someone online at home, so the offer should be different.
DM: In the pantheon of marketing methods where is personalization and how do you see it changing?
FG: What we all strive for as brands and marketers is replicating the individualized experience that comes so naturally at your neighbourhood merchant, at scale. With so many touchpoints and customers driving the interactions they want to have with brands today, brands need to gather the various crumbs their customers leave in order to not only understand what they need right now, but also anticipate what they might want next. That’s a monumental shift from printing a customer’s name on a flyer.
The future of personalization will include a great orchestration across all the channels, including the store experience. Where the store associates would have access to the same information in order to let them be smarter when interacting with the customers on a daily basis.
DM: What are the opportunities but also the challenges you see with personalization?
FG: There’s still lots of untapped opportunity, but it’s all about changing the way companies re-think their customer engagements across all the touchpoints and interactions. The shift to personalization comes with a great payoff, namely client satisfaction and engagement that leads to sales lift. We see a lift between 5%-10% when companies start to personalize their customer engagements.
A big challenge we see with many clients is step number one, which is getting a vision for personalization. What is good personalization differs from one brand to another, so it’s key to start with the vision and the strategy and align the entire organization around it. There’s a cultural shift that needs to happen, as we will not market and communicate the same way. As no one is receiving the same offer, it’s no longer about what’s on the front page of the flyer or these vendor-funded promotions that needs to be pushed to everyone. Instead it is what is relevant for each individual person, meaning that we need to accept that there’s less human control and more AI decisioning. The machine is determining within certain parameters what’s good for every customer in the context the person is.
Then step number two which is getting companies’ data silos aggregated into single views of their customers. But bringing the data together and making sense of what they already have is the biggest challenge. There are many disparate databases and systems each built with a specific purpose, structure for capturing information and many other complexities. And for many marketers, data and technology are outside their scope of control.
One of the biggest values we add for our clients is creating a forum across these various functions to align the company’s vision and help them create a roadmap to bring their vision to reality. In order to do that we follow a four step process: (1) Define the strategy and vision for personalization, (2) redefine the customers interactions, (3) assessing the technology and the operations and finally (4) prioritizing all the initiatives.
DM: Where do you see personalization going in the future?
FG: AI is certainly already a component that’s helping drive personalization. At Relation1, our R1.ai platform uses AI for applications like product recommendations. For the marketing executive, R1.ai powers dashboards that help them make faster decisions. AI will only grow in its importance and usage as businesses become more comfortable with the capabilities and become more creative around how it can be applied in all channels, including emerging ones like voice.
Personalization at its core is about experiences that are unique to each individual. The more a customer interacts with a brand, the more they expect their interactions to be relevant, meaningful and delightful. Delivering on this customer expectation is no longer a nice-to-have. The tools and the know-how exist, all brands need now is the will to make it happen.
François Gaumond is vice president, consulting services for Relation1 (www.relation1.com).