Did you know that Netflix has only 90 seconds to find a show that suits a user before she gets frustrated and quits? According to a recent academic study, “a typical Netflix member loses interest after perhaps 60 to 90 seconds of choosing, having reviewed 10 to 20 titles (perhaps 3 in detail) on one or two screens.”
How does Netflix manage to find the right show for the right user so quickly?
According to the same study, 80% of its customers’ video plays comes from its personalized recommendation engine. Netflix estimates the value brought by this personalized recommendation system at a billion dollars per year.
That’s a serious win achieved through personalization.
Now, how are you doing with your personalization efforts? Chances are, not as great as Netflix’s. And if that’s true, you are certainly not alone. Gartner found that less than 10% of Tier 1 retailers believe they are highly effective at personalization. As much as one third of them have limited or no personalization going on.
The Personalization Gap
Why so much potential being met with so much failure? Is it a lack of interest or a lack of the right tools? Research suggests another answer. According to Clearhead’s Digital Optimization Benchmark Study:
Similar to testing, we find that lack of technology isn’t the problem when it comes to personalization. While 64 percent of retailers have the technology, they tend to lack the process and rigor needed to execute their personalization efforts.
As often, it’s more of a people problem than a technology problem. Having worked as a consultant at an A/B testing and personalization software company, I’ve seen many personalization efforts getting stuck in the weeds. The cause was almost always over-enthusiasm combined with total lack of process.
The solution? Starting with a simple but structured approach. Here is a primer to get you started doing personalization in a structured way.
Adopt a Structured Approach to Personalization
The first step is to stop viewing personalization as a set of tactics or worse, as a set of features provided by the tool du jour.
What is personalization, actually? Personalization is the process of tailoring experiences to specific subsets of users.
Potentially, every interaction with the customer or the prospect can be personalized to a point. The website, the mobile application, the advertising, the support, the different screens and features of the product… everything could be personalized.
The possibilities are virtually infinite but your time and budget are not. This is why you need a process to limit waste and maximize your personalization ROI.
The second step is to embrace research. There is this big myth out there that says that you don’t need to do as much research for personalization as you would need for A/B testing.
Some vendors would also tell you that you don’t need to be as rigorous with the mathwhen analyzing the results of your personalization as you would need in the nerdy and nasty A/B testing world. Since you already “know” what is good for each of the segments you identified, you can just roll out your personalization to 100% of your audience and score a win. Right?
The third step is to focus on organizational capacity building instead of short-term results.
It’s about the people and not about the toolbox or the tactics. Getting good results from your personalization efforts is the result of your team getting good at the personalization process. It will takes months, not weeks. So you need to be a champion or find a champion to sponsor the initiative and shield it from getting prematurely killed.
You need to find the support to do proper research, proper implementation, proper QA and proper analysis. You need to do the work and take the time to develop a process that works for your company. Copy-pasting examples from case studies is a doomed endeavor as your company and your customers are specific and different. Victory surely can’t be copy-pasted.
Use This Simple Process to Get Started with Personalization
In the rest of this article, I will share with you a basic process you can use to build upon. I was looking for a sexy and memorable acronym to serve you but couldn’t find any that didn’t sound lame. So I will give it to you as is:
- Define your goals and KPIs
- Do both quantitative and qualitative research
- Identify, select and prioritize segments to target
- Prioritizing your segments and experiences
- Design and orchestrate experiments
- Measure and iterate
I will also discuss common traps to avoid, available tools in the market and additional resources you could use to strengthen your skills and improve your success rate.
1. Define Your Goals and KPIs
Most of the time, there is little discussion about the big picture, about how personalization efforts fit in the overall strategy of the company. Being clear in what you want to achieve as a company and how you expect personalization to contribute looks like common sense but common sense seems to often take a backseat when deadlines are looming close.
There is a lot that has already been written about identifying goals and choosing KPIs. There is a wealth of very good resources so I don’t need to paraphrase them. You can check the Web Marketing and Measurement Model by Avinash Kaushik (who is an analytics legend):
Next, you will need to find what are the biggest potential levers you could pull to reach your goals and targets. To find out, you will need to do proper user experience research.
2. Do User Experience Research
User experience research or UX research, shouldn’t be limited to A/B testing programs only. Since we are personalizing to improve the user experience (and make money as a corollary), it makes sense that we should put as much effort as possible to discover what are our users doing on our website or mobile application and why they are doing it.
Quantitative research with digital analytics tools like Google Analytics, Mixpanel, Amplitude or RJ Metrics will inform you about where your users are coming from, what they are doing during their sessions and where they are dropping off from your conversion funnel or when they churn.
You are certainly already familiar with Google Analytics, but if you need to brush up your skills, there is a course by CXL Institute that can take you to the next level (or if you’re a total beginner try this one). There are also tools focused on UI analytics like click maps (CrazyEgg, Hotjar, FullStory, Yandex Metrica) or form analysis (Formisimo, Yandex Metrica).
Article credit : conversionxl.com