The 8 Facets of Personalization

Personalization - understood as dynamically curating product offers and experiences to each individual customer and context in a seamless manner across channels - is one of the most powerful levers to both dramatically improve the customer experience and to deliver direct business impact. This is why Personalization certainly enjoys a VIP status among the 10P of Digital Marketing. 

However, instead of identifying Personalization opportunities comprehensively, quite often a very narrow perspective is adopted which reduces Personalization to the mere discipline of dynamically adjusting digital interfaces to individual user characteristics, often referred to as "web personalization". Such narrow view typically takes Amazon as a role model for pioneering personal product recommendations based on individual browsing history and collective patterns in purchasing behaviour. 

While personalizing digital interfaces and product recommendations are two important facets, there are six more, which are of particular relevance to non-retailers like financial service companies. In my view, non-retailers are misguided by taking the Amazon approach to personalization as target vision. To capture the full potential of Personalization, they need to adopt a much more comprehensive perspective is necessary. This blog article introduces a framework which which covers all 8 Facets of Personalization:

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Personalized pricing: offering individual price schemes, for example to reward for loyalty

Elastic Products: flexibly adapting and configuring products to meet customers' individual needs

Right Channeling: contacting the customer via his / her most preferred channel

Smart Content: filtering and shaping the message for relevancy to the individual customer

On Time Contacting: tying the timing of contact the customer to individual triggers and life events

Next Best Offers: matching the right products to each customer

Advice for One: fully shaping customer dialogue about his / her unique situation

Liquid Interface: building modular and flexible interfaces to adapt to personal usage patterns and preferences

These 8 Facets cover an area that is determined by the two axis inbound vs. outbound and trigger- vs. personality based contact. At least the latter axis is more or less continuous: a contact can be personalized addressing both a trigger or current event in the life of the customer and also the customer's general personality, preferences and lifestyle. To pick one of the 8 facets, smart content really relates to either side of the two axis: content should ideally be tailored both to the current trigger and to the personal preferences (e.g. complexity level) of the customer, regardless of who initiated the contact (inbound and outbound). The facet of on time contacting on the other hand clearly relates more to outbound contacting (as this is when the company has to decide about the right timing) and should therefore be primarily tied to certain triggers: A customer who just inherited a fortune will be more interested to learn about investment options than another person who just got unemployed.

Together, the 8 facets also demonstrate why taking Amazon as a role model might be bad advice for non-retailers: The product portfolio of Banking institutions for example is not comparable to Amazon in terms of breadth or depth, and instead matching exactly the right product from millions of items to the right product, the bigger challenge for Banking is to customize a certain product (e.g. lending or investment product) to the customer's needs and to personalize the product's economics - this is the facet of elastic products which need to be offered exactly On Time, ideally anticipating related life events. In addition, customers' needs and expectations to get advice on financial products which truly addresses them as individuals ("advice for one") go far beyond the Amazon case. Even if advice in Banking is increasingly given by digital tools and chatbots, it will not suffice simply to have a recommendation engine simply suggesting the right product, but there remains a great need to justify the recommendation and to explain the economics and potential risks attached.

The framework introduced above should be of help for non-retailers to liberate themselves from narrow Retail-Personalization, and to holistically identify the opportunities for Personalization in their industry. Only such holistic perspective makes Personalization what it should be: a truly customer-centric approach, which understands the individual in its entirety to communicate in the most relevant way.

I would love to discuss the topic of Personalization further with you, the new advances of predictive analytics and digital technology enabling unprecedented levels of Personalization, the implications to data and organizational requirements, and the great examples of Personalization we see today across industries. Please do not hesitate to connect via mail, LinkedIn, or twitter.