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Industry Contributor 18 Jan 2021 - 5 min read

The great personalisation reset: why 2021 is the year for a 'fundamental rethink'

By Shaun Rowland, Marketing Strategy Director - AKQA Australia

2021 will herald a fundamental rethink in how we approach personalisation. We have spent years pushing water up hill in search of the personalisation promised land, yet for many it remains elusive.

Key points:

  • Gartner's Hype Cycle puts 'Personalisation Engines' at the nadir of the Trough of Disappointment.
  • It predicts 80% of marketers will ditch personalisation altogether by 2025.
  •  We need a personalisation 'reset' to avoid that fate.
  • Marketers must concentrate their firepower where it will count.

Whilst personalisation powerhouses Spotify, Netflix, and Tencent power ahead, most brands remain in the quicksand.

'Seamless' technology and organisational silos have hindered our progress. Personalisation-at-scale roadmaps have caused paralysis. 

The privacy-conscious zeitgeist is raising questions about whether personalisation is ethical at all. Marketers are losing credibility as businesses start asking questions about ROI.

Gartner's decision to place Personalisation Engines at the bottom of its 2020 Hype Cycle’s Trough Of Disappointment is emblematic of this malaise.

This followed its prediction at the end of 2019 that a staggering 80% of marketers would abandon personalisation altogether.

Fitting for 2020 you may think - the whole year belongs in the Trough Of Disappointment. Well, as they say, the only way is up. 2021 will kick off personalisation’s ascent on the Slope Of Enlightenment.

The ill-defined goal of personalising entire brand experiences must be abandoned otherwise inertia will continue.

It’s time for the great personalisation reset - our brands and customers will be much better for it. There is only so much personalisation energy in any organisation’s tank.

Personalisation programs live or die based on where to spend and save this energy.

Here are three questions marketers should be asking their personalisation teams and agencies in 2021:

Are you focusing on genuine value but also making space to experiment?

Not all personalisation experiences are equal. Use the 80/20 rule as a rough guide.

Apply 80% of your personalisation energy to the moments that will generate the most value for the customer. Ideally, these will be moments in the experience that influence how sticky a customer or user is to a brand, product or service.

Leave some energy for experimentation – it’s often edge cases that lead to breakthrough discoveries and distinctive creativity.

Spotify focuses its personalisation energy on its playlists. Users who engage with playlists are more likely to stay with the platform and convert into paying subscribers.

So, investing in the playlist experience is a critical component of their conversion and retention strategy.

Spotify then applies 20% of its personalisation energy into experimental experiences. These further distinguish it from its competition and provide insights it can apply to the broader experience.

Are you enabling customers to shape their own experiences?

Customers often prefer taking control of their experiences rather than being spoon-fed products and content by algorithms that don’t always align with the customers’ context.

Marketers should think about how they can enable customers to exercise their agency over experiences, or at least give them the illusion of doing so.

Preference centres are an obvious place to start. Marketers shouldn’t assume their customers’ preferences are fixed.

Don’t set and forget - check in with the customer to give them an opportunity to update their interests.

Pinterest checks in with its users to reconfirm their interests so they don’t get stranded down narrow rabbit holes. After all, it’s unlikely someone who has completed a bathroom renovation wants to keep seeing bathroom reno inspo pins - they have moved onto their next project.

Are you really personalising or just segmenting?

Many ‘personalised’ experiences are really segmented experiences.

Users or customers are placed into pre-defined segments once they meet certain behavioural/demographic criteria.

Segmentation is an attempt to simplify the complexity of human behaviour but the process of classification can strip away customers’ unique and changing needs, contexts, tastes and attitudes.  

This is still better in some contexts than a one size fits all approach, but the world today gives us the ability to be much more nuanced.

Realtime data flows and processing through contextually aware machine learning engines can now be used to deliver truly personalised 1:1 experiences based on the individual’s behaviour and intent. Commonwealth Bank has become a leader in this space using its vast dataset with ML capabilities to deliver its customers individualised offers.

Remember to leave room for experimentation.

Carve out time to get into the sandbox and play with emerging technology such as Deep Fakes which can transport customers into highly individualised brand experiences that entrance and delight. 

The wrap

There is still a lot here to tackle in 2021 and all of it requires the fundamental building blocks of personalisation in place to achieve success.

People, process, technology and data are still as important as ever to get right.

Crucially, however, it’s not about differentiating between a “logged in” and “logged out” state or mail-merging usernames in email newsletters.

In 2021 we need to take a step back and reassess where we are planning on spending our personalisation energy.

Is it on moments of genuine high value or simply the low hanging fruit? Are we inviting the customer to take control of their own experience? Are we thinking beyond messaging and product recommendations? Are we truly personalising or just segmenting, and is there value in doing so?

The Slope Of Enlightenment lies just ahead. Is your business ready to take the first step into the light?

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Shaun Rowland, Marketing Strategy Director

AKQA Australia

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