How to move from segmentation to personalization

Transcription

1 How to move from segmentation to personalization Growing revenue and engagement with data Marketers recognize that traditional market segmentation is not enough. Delivering messages or offers to customers based purely on broad customer segments won t yield the desired results. That s because customers don t represent segments they represent themselves. We can do better. Customers are interacting with companies in many more ways than in the past. From just on the phone and in the store, to on the phone, in the store, online, via chat, via , through social networks, on mobile and so on. These interactions are generating data. If you can pick up this trail of data and assign it to an individual, you can form a more complete picture of the customer and that picture can be the basis for personalization IBM Corporation 1

2 Step one Collect your data to build customer profiles Any personalization effort starts with a building a clearer picture of your individual customers. Here s the good news: the segments you already use are a good start. Start with those segments, and build personas that represent individual customers in those segments. Use the data you already have to refine your picture of that persona. Your aim is multifaceted segmentation segmentation that accounts not just for basic demographics, but also for behaviors. You want to identify new dimensions on which to base a more refined segmentation. A core segment like single women aged 21 to 34 has many sub-segments within it: single year-old women who have searched for $50-$100 pairs of jeans online in the past week, for example. This doesn t mean all data needs to be collected into one central customer data warehouse, but the technology does need to be able to access data where it is available. And not just your static customer data like demographic and geographic information, but dynamic data like purchase or usage history and interaction data like , chat records and Web click-streams. Once you ve built profiles with your existing data, you can look for new streams to add to the mix. Companies are just beginning to capture and analyze individuals social media profiles, for example. Some retailers are experimenting with digitizing the in-store experience. These are new sources of data that, combined with existing data, can provide new insight on individual customers. 2

3 Step two Map the customer journey Now that you have the basis for a more thorough segmentation, you need to identify a typical customer in each segment and take holistic look at the experience you want them to have. Start with a persona a fictional person that represents your segment. Describe him or her habits, interests, what a typical day looks like. Identify when, where and how he or she interacts with your enterprise. Look for moments of truth where the right personalized interaction an , a phone call, a Facebook post - will lead that individual towards making a purchase, or equally important, advocating on your behalf. With this holistic understanding of the customer journey in place, you can develop your hypotheses about when, where and how to personalize your interactions with customers. Step three Write the rules and build your models Once you ve identified where, when and how you want to deliver your personalization, it s time to write the rules. Rules determine what message gets served to whom, and when. An example rule: If a year old single woman visits the site, within one week of visiting a pair of jeans between $50 and$100, place jeans from brand x priced $50-$100 on the top of homepage. Base your initial rules on experience, common sense, intuition, traditional market research and business strategy. Then you ll need technology to deliver actions based on the rules. Think of this as the center of the marketing machine, where the wheels spin continuously, deciding what should come next in the dialogue with each customer and prospect no matter how many thousands or millions of customers the company has. You won t get these rules right the first time testing and iteration are key. Eventually, to improve on these static, manually generated rules you need selflearning algorithms developed with analytics software that automatically refine rules to make them increasingly more predictive. 3

4 Step four Determine how you will act Next you will need to determine what messages will be served, or what actions recommended, and through which channels, using the results of your models. This can be the hardest part. You ll need to centralize decision making, so that the personalization is carried out consistently across channels. You ll also need to capture responses. Those responses in turn can influence future messages, ensuring the customer dialogue remains interactive. Without this, you ll risk a confused customer experience, sending a personalized with one message, while a call center representative reaches your customer with another. Start small and build. Pick a channel to start with, such as an outbound channel like or direct mail, then build to more channels. Delivering personalized messages in real time is where personalization really pays dividends. Serving a batch personalized message to a customer based on their demographic, online history, and customer service history is powerful. Yet more powerful still is serving that message at exactly the time they are most receptive to it: when they are researching a trip online at work on their PC, purchasing plane tickets on their tablet, walking around looking for a place to buy a pair of shoes, or about to call to cancel a subscription. Strong customer data combined with predictive models and clear channel strategy can make this a reality. 4

5 Step five Automate, automate and automate Creating a personalized experience may require a lot of manual work up front, but to sustain a true personalized marketing experience you need to automate. The sheer complexity of millions of data points collected in all your touch points Web site, s, widgets, display ads and so on, make it impossible to handle manually. To guard against a confused cross-channel experience, decisions need to be made centrally, and delivered consistently through channels. To generate this consistent experience without draining your resources, personalization must be automated. 5