I was recently invited to participate in an all day brainstorming session. The objective was to work through ideas on how a prominent travel brand could leverage “personalization” to create a great customer experience that would also drive their key business objectives.
I was very exited to be part of this team for the day, especially given the talent in the room. To kick of the day one of the groups prepared a 30 slide best practices deck. The idea was to refresh the group on who is effectively using personalization and who is not, as well as the pitfalls. Has your Tivo ever turned on you? Long story short we never made it past the second slide. That infamous second slide naively tried to offer a simple definition for the term Personalization, and distinction from it’s cousin segmentation. We debated the nuances between segmentation, personalization, and even customization for over five hours. I felt compelled to share my definition, even though I truly believe it doesn’t matter what you call it just as long as you deliver the goods.
Segmentation: This is the term most commonly used by traditional direct marketers to describe how they break down customers into logical groups or “segments” they aim to target. The level of sophistication used to determine the make up of these groups varies greatly. You can work with a simple segment like “past customer” or end up with hundreds of cluster codes and attributes “young Midwest family with kids that has shown interest in the past 30 days and has a value score of X and above” To drive content on you site based on simple segments like “young family with kids” is still considered segmentation driven experience. Think of looking at history to drive content.
Personalization: Personalization is exemplified by leveraging interactive two-way inputs to drive the experience. That means using the historical segment “young family with kids” and overlay the active inputs to establish “young family with kids” Tommy is four years old, and Amy is 12, and we are bringing my mother in law. The content in this scenario could be materially different and much more relevant.
Customization: This one is more about the active inputs. Don’t know who this is or what they are looking for until he selects “only show me content for families with young kids”
At the end of the day we should care less what term we use, just as long as we leverage the data to create more compelling customer experiences.
