Personalization is failing us.
That might sound like a sensationalized statement in a world where brands amass huge amounts of data points on their customers in order to drive personalization strategies. However, the majority of brands that purport to personalize each customer’s journey are merely delivering generic recommendations based on curation algorithms.
Curation algorithms collect data about a user’s habits and then recommend more of the same, based on others with similar habits. “People who bought item X also bought item Y” and you get the picture.
The issue is two-fold, firstly, a curation algorithm is not personalization in any form, and secondly, it’s self-fulfilling — if users are always recommended the same products, item X will always be accompanied by item Y.
Personalization is tailoring product and service recommendations to a unique user based on their self-reported preference insights and desires, not lumping consumers into large cohorts and making semi-generic recommendations based on what others have done.
Curation algorithm isn’t personalization
Watch The Incredibles 2 on Netflix and you’ll likely be recommended similarly animated movies, or listen to Bruno Mars on Spotify and his back catalog will appear in your daily mix playlist. You’ll probably get some similar upbeat, poppy artists thrown in for good measure and it might seem like Spotify has created you a bespoke playlist. However, this is merely because other Spotify users have playlists featuring Bruno Mars, Taylor Swift, and The Weeknd.
Consumers are more complex than to be fully satiated by a limber, but ultimately limited curation algorithm. One might love Drake, but hate Kanye West; despise action films, and yet have the Fast & The Furious franchise as a guilty pleasure.
A curation algorithm, the staple for many behemoth brands cannot cater for this. It can merely serve up more of the same, no surprises, and no personalization.
The solution: zero-party data
There is another way of course. Delivering true personalization to individuals derived solely from self-reported data. This is zero-party data.
Forrester coin zero-party data as “that which a customer intentionally and proactively shares with a brand. It can include purchase intentions personal context, and how the individual wants the brand to recognize her.”
For marketers who take the zero-party data path, rather than relying on curation algorithms or other antiquated techniques, this is a unique opportunity to improve relationships and deliver true personalization. Marketers can connect directly with consumers and gather the data, insights, and permissions they need to power personalized marketing.
So rather than inferring, or assigning a consumer to a large cohort, you ask, and from this, you can deliver the type of personalization that increases conversions, sales, and reduces churn.
Putting the theory into practice: Bowtech
The archery vertical is in an ultra-competitive space. Leading brands typically spend millions on “feature wars” to differentiate themselves from their rivals. However, fundamentally it’s a vertical hallmarked by similar tactics, ad formats, influencers, and media, with the winners traditionally being those with the largest budgets.
Bowtech decided that rather than attempt to outspend their competitors, they would focus on connecting directly with customers and delivering true personalization powered by zero-party data.
“Zero-party data is more valuable than the product.” – Tim Glomb, Bowtech
Using Cheetah Experiences’ library of multi-channel campaign marketing campaign experiences to drive zero-party data, Bowtech scrapped the budgets traditionally put towards TV advertising and print publications and focused on channels that deliver tangible ROI.
But this isn’t merely about growing the first-party database with huge amounts of opt-ins, the focus is on activating its current database. Turning a name and email address into a larger profile, filled with purchase intentions, buying motivations, and interests. It’s this data that informs the truly personalized marketing that Bowtech creates for each and every customer rather than grouping them into large cohorts.
This strategy enabled Bowtech to outperform competitors by 20% in sales while reducing $1.2M of marketing spend.
- £1.2M reduction in annual marketing spend
- 500k zero-party data records collected
- 150 data points collected per customer
- #1 US Archery brand (from #5 before zero-party data strategy)
Algorithms that suggest related content aren't true personalization. For true personalization, brands need to focus on gathering zero-party data from customers.
Want to see how your brand can enable true personalization? Learn more about Cheetah Experiences today.
Richard Jones is the CMO at Cheetah Digital, where he oversees a global team that is responsible for all aspects of the brand, demand generation, digital marketing, corporate communications, and sales development. With more than 20 years of marketing, sales and strategy experience, Jones was previously the CEO of Wayin, a global leader in zero-party data collection and activation. There, he helped many of the world’s leading brands such as Daily Mail Group, NHL, Bauer Media, Vodafone, Priceline.com, Reckitt Benckiser, Air New Zealand, and Manchester City FC create zero-party data strategies.