Is personalization bad for business?

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Kristina: In your opinion, what are the biggest problems with personalization today?

James Glover, CEO, Coherent Path: The “you may also like” approach to personalization within news organizations and social networks like Facebook are simply feeding people more content that is similar to what they have already read. An unintended consequence of this is that it simply reinforces a person’s beliefs rather than informing them and opening their eyes to new ideas and opposing points of view.

A similar outcome is happening in retail. Product recommendations and other rudimentary personalization approaches are simply reinforcing what a shopper has already been exposed to. It’s equivalent to picking something up in a store, deciding you don’t want it and having the sales associate follow you around with that item or something similar, rather than getting to know your taste, style and needs to suggest something you’d be interested in more.

Kristina: Do you feel personalization is doing us all a disservice?

James: In short, yes. Shoppers and marketers alike will all be better off being exposed to more and different content, outside of what we usually consume, rather than only being fed what we’ve expressed interest in previously.

Personalization can do an ok job of putting things in front of you that you’re in the mood for, but not in expanding your taste. For the retailer, this means personalization – in most cases – is only exposing a small portion of the product catalog rather than exposing new products and categories.

Kristina: There are many studies proving the effectiveness of personalized marketing. What would your advice be to marketers when it comes to personalization?

James: Retailers need to move beyond simple product recommendations and start using a more comprehensive, data-driven approach that build trust and loyalty with shoppers. If they are only interested in making a sale today, then product recommendations or retargeting may be enough. But if they want to create a long-term relationship that results in recurring revenue, they need to say something relevant – and email is a great channel to do this.

Email is the basis of a relationship between a retailer and its customer. Much like the transition from a first date into a solid relationship, a retailer needs to invest time and learn more about their customers than just basic demographic information and past purchasing habits. Taking this basic personalization approach is essentially the same as taking someone on a first date every time you go out with them. How can a retailer evolve its relationship with a customer if it keeps asking the same surface-level questions (or using the same basic data) every time it interacts with a shopper? If a retailer isn’t learning anything new, they can only offer the same products or sections of its catalog that the shopper has been exposed to. This is a rear-view mirror approach to personalization and will not suffice in today’s retail environment.

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ABOUT THE AUTHOR

Kristina Knight is a freelance writer based in Ohio, United States. She began her career in radio and television broadcasting, focusing her energies on health and business reporting. After six years in the industry, Kristina branched out on her own. Since 2001, her articles have appeared in Family Delegate, Credit Union Business, FaithandValues.com and with Threshold Media.