This is the third in a series of posts about why personalisation needs context.
In my last post I wrote about Joe Pine’s idea that we can create new value by customising goods, products, services and experiences. And I wrote about how I believe we’re starting to do the next logical thing: we are customising experiences to create personalised ‘Moments’.
In this post I want to look at how companies differentiate themselves – and why so many organisations get it so wrong when it comes to customising services and experiences. And what this means for this idea of Moments.
Let me start with an example. I was recently travelling into work when I received a text from my mobile phone company telling me about a new loyalty offer from one of their ‘trusted partners’. It was a coupon to use that day at a local coffee shop. The problem was that the coupon had been sent to me based on where I was at the time. Which was on a train travelling about 50mph through that particular area.
It was a waste of a text. A waste of my time and attention. And a waste of money for the trusted partner (who I’m sure had been sold a ‘targeted loyalty solution’ as part of a ‘customer engagement service’ from the mobile operator). Even if they could have predicted that I wanted a coffee at that moment – ignoring the fact that I’d bought one before getting on the train – they’d failed to understand the meaning of my location. They were guessing.
(As an aside, I’ve just looked through the other ‘loyalty’ offers texted to me by my mobile operator. Some insight here if you bother to look: A cider offer (I expect based on my demographic profile), very expensive headphones (again, my demographic?), an invitation to visit a newly-decorated department store (based on location), a beer offer (I don’t drink beer), a discount sofa range (who knows), lottery tickets (don’t play), a lunch offer (the closest match – sent at lunch time), and a deal for an ice lolly. All waste. All diluting the market message. And all reminding me of Don Marti’s brilliant writing about ads and signalling here.)
So I started thinking about this more generally – why and how so many organisations make these assumptions, and waste time, effort, money and the relationship with the customer. Why guesswork is considered the smartest way to engage with customers.
Looking back at Joe Pine’s ideas about Mass Customisation, he describes how companies are able to differentiate: with products, it’s mainly about price. With services, he believes it’s about improving quality. And with experiences, it’s all about being authentic – or rather, two specific types of authenticity:
- Being true to others – doing what you say you will
- Being true to yourself – being consistent about who you are
By mapping these two types onto a ‘two-by-two’ matrix, he shows that there are four possible types of experience. Here’s a picture of what he means (some are my own examples):
Top right: It’s an authentically ‘real’ experience. They are themselves and do what they say they will. Like going to a traditional Italian family restaurant – they take a very real pride in serving you and discussing suitable wines, insisting that you sample their home-made tiramisu, and giving you an espresso on the house, because it’s what they are passionate about.
Top left: It’s kind of authentic, but there’s something missing. They do what they promise but they really aren’t truly being themselves. Like being served by the clichéd Fast Food Burger Guy – yes, he sells you a burger, but he doesn’t love his job. His “have a nice day” as you leave feels empty.
Bottom right: It’s an authentic experience, but it’s a ‘real fake’. Like going to DisneyLand – in every way it’s about family entertainment, but you’re not really in the Magic Kingdom.
Bottom left: It’s a completely fake experience. Like being the victim of a phishing attack – the people contacting you are not who they say they are, and don’t do what they promise.
I like Pine’s thinking about these two types of authenticity. So it got me thinking about how I could look at customised experiences – my idea of ‘Moments’ – in the same way.
How can companies differentiate themselves when it comes to personalisation?
I believe there are two things organisations will need to understand:
- Who I am. But not just my identity generally – it has to be ‘who I am right now’. They’ll need to understand my persona – who I want to be seen as – because this changes over time. At some times of day I’m a parent, at other times I’m a football supporter, sales executive, friend and so on.
- What matters to me. Again, this doesn’t just mean ‘my preferences’, but what I want or need right now. Am I looking for advice? Am I sharing with friends? Am I shopping or just browsing?
So like Pine’s view of experiences, I’ve had a go at mapping out personalised Moments in the same way. Here’s my view of the four outcomes:
Top left: When the organisation asks me who I am, but then guesses what matters right now: it’s Facebook (and other ‘social commerce’).
- Them: “Please sign in and let us know exactly who you are.”
- Me: “Hi, it’s me again.”
- Them: “Hey! We’ve been following your activities online (and in some places offline too), and what your friends have been saying recently, and we thought you might be interested in this Expensive Car. And an ‘Ice Watch’. And a ‘Dream holiday in Malaysia”.*
*these are not random examples – I just logged into Facebook to see what ads were being shown to me…
Top right: When the organisation asks me who I am, but asks me about what matters right now: it’s BillMonitor.com.
- Them: “Hi, how can I help you?”
- Me: “I’m looking for a new mobile deal.
- Them: “Ah, what kind of deal are you looking for? We can help you look through all the options on the market right now, but if you let us know how you use your phone we can find you the best fit.”
- Me: “Well here’s how I’ve used my phone for the last few months….”
Bottom right: When they don’t know who I really am, but go some way to asking what I want: it’s uSwitch (and other price comparison websites).
- Them: “Hi, what are you looking for today.”
- Me: “Here’s some basic information about what I need.”
- Them: “Great! Here’s a list of things you might be interested in, but because we don’t really know who you are (and can’t verify any of the stuff you just told us) you’ll have to speak to the providers directly.”
Bottom left: When they don’t know who I am and completely guess what I want: it’s spam.
- Them: “Would you like to buy this car?”
- Me: “How did you get this address? Please delete me from your database.”
- Them (8 minutes later): “Would you like to buy this car? Or this one? Or this one?”
Back to my texted-coupon-on-a-train example. I wrote earlier that they had failed to understand the meaning of my location – or rather, the context of my location. I believe that personalisation goes wrong when no one’s asking about the customer’s context, or no one’s listening. It’s being sent a ‘targeted’ advert for a car, not knowing you just joined a car club. It’s being recommended a book on Amazon based on your shopping history, not knowing you actually hate the author (your previous purchase was for a friend). It’s being sent coupons for pregnancy products based on your shopping history, when you haven’t yet told your family you are expecting a baby.
The opportunity here is to help organisations understand their customers better. Who they are and what matters to them – at that moment. The problem is that this is very hard to do at Internet Scale. Which is why most organisations rely on standardising processes, service models and customer experiences. It’s the easiest answer when all your customers look the same, and you’ve had a 150 years of practice. (though it’s unfortunate that standardisation like this can unintentionally kill innovation.)
I continue to be excited by everything going on around Personal Clouds, Trust Frameworks and Vendor Relationship Management. Because I believe that these ideas and others will help organisations build relationships with individuals, not just drive transactions. And in doing so they’ll be able to listen to, and understand, customer context.
It’s worth noting one point of caution here, made by Doc Searls after I put up my last blog post. Almost all personalisation as we know it today is ‘vendor-side’ and not ‘customer-side’. Put simply, it’s usually done TO us – or at best WITH us – rather than done BY us, the customer. You know, the people paying for stuff. My simple view is that personalisation is all about understanding Moments; this means listening to – and likely for – customer signals.
I believe we’re about to enter a very interesting few years where customers will start to have tools to express who they are, and what they want – when it matters. And organisations will be able to listen, and address those customers directly. I think it was Doc who a while back reminded us that we overestimate what will happen in two years, but underestimate what will happen in ten…
It’s an exciting time indeed.
In my last post I wrote about how personalising a product or service means you need to know lots about the person. And that means having lots of personal data. On one hand most people want the very best deals and meaningful interactions with organisations whose products and services they need and want. On the other hand, there are a growing number of people who are uncomfortable about who has access to our personal data, why they have it, and what else they are doing with it (or what might happen to it unintentionally).
Whilst the idea of personalisation is appealing to many, there’s a deep debate about how we balance the innovation and convenience of personalisation with the security and privacy implications.
This post is about personalisation, but from the perspective of ‘Mass Customisation’, one of the ideas that Joseph Pine wrote about 20 years ago.
First, a bit of background on the idea. Pine describes how we’ve progressed through clear economic phases:
- In the early days, most markets were centred around the commodities we produced as an agrarian society; the output from farming land and animals. For example, we bought and sold coffee beans in sacks.
- Some people started to process these raw materials and package them up for a particular need – these raw materials had been ‘customised’. They became goods, and over time we stopped caring about who supplied the raw materials – we ‘commoditised’ them. We bought and sold pre-ground coffee in packets.
- Then, over time, many started to use the available goods to create services, adding further value and of course charging a higher price still. We stopped caring so much about who supplied the goods behind the service, and we commoditised further. We bought and sold fresh coffee by the cup.
His main point was that this is a repeating trend: we customise to create value, and in doing so, we end up commoditising.
In his book, and later in this popular TED talk, he asked the next logical question: so what’s after services? What happens when you customise a service? His view, I think generally accepted, is that you get an experience. A service tailored in some way. Here’s the coffee analogy: the service providers not only grind the beans for us and make us a coffee, but we are invited to relax in big comfy arm chairs, listen to jazz and eat muffins. A specific customer journey. A specific environment. A specific view of added value, and importantly about finding new ways to make and sustain the profit margin.
And it makes perfect business sense: coffee beans cost less than a penny; a packet of ground coffee costs a few pounds; and fresh coffee costs £1.50 a cup. Yet a visit to Starbucks for a skinny-latte-extra-shot-no-foam-Norah-Jones-serenade costs nearer £5. And guess who’s making the good profit margins.
As ever, a picture helps:
But here’s what’s interesting: what comes after experiences?
The logical answer is that it will be the customisation of experiences. But what does that mean, exactly? Pine believes that it’s all about transformation – helping you transform yourself, physically, intellectually or emotionally. But having thought about it for a while I believe that it’s much more specific than that.
To me at least, customising an experience means understanding when you have the experience. And where. And with whom you share it. And a whole range of other things that depend on your context. I’ve come to think of these as specific ‘moments’.
I believe that as we’re moving from the service economy and into today’s emerging ‘experience economy’, we’re starting to see the early signs of a new economy around personalised experiences. At specific times of day, like when you get up. At specific locations, like your place of work. And specific social contexts, like going out for a family meal.
Just as companies differentiate themselves today by improving the customer service and the customer experience, I believe that they will look for ways to add new value by personalising customer moments. When you walk into a store. When you get engaged. When the weather changes and you need to change your route to work. When you’re moving house.
Just look at what Google are doing with their personalised digital assistant application, Google Now. They take data from your daily routine, your current location, your social and search activity, plus other digital breadcrumbs and provide up-to-the minute recommendations/ suggestions about what might matter to you – right now.
I recently came across this quote from Alain de Botton:
“Most of what makes a book ‘good’ is that we are reading it at the right moment for us…”
This really struck a chord and the idea of moments has become very clear to me now. And how understanding context is fundamental to getting personalisation right (and why so many get it wrong). Pine’s idea of Mass Customisation is an important one, and something that I think will come to life as we develop better tools to help us express context – who, what, when and where matters to us individually.
Personalisation. It’s a matter of time. And of moments.
[So I’ve been meaning to write a new post for a while now. In fact for about a year. The last 12 months have been great thinking time and great family time. But it’s now time to get back online properly and put some new posts up. For people to read, for people to think about; hopefully for people to discuss and respond. Make of it what you will – I’m all ears. And eyeballs. And keen to hear and see what you think. Most of all I want to start a discussion. Spark some conversations. Perhaps some relationships. And you never know, maybe even some transactions. (For those that don’t get the reference – go and read #Cluetrain. Welcome everybody, I’m back.]
Today’s thoughts are brought to you by the letter P and the number 1. P stands for Personalisation and ’1′ stands for the fact that there is only one you. Whilst there may be many versions of who we want to show at any one time, there’s only one real you (for a bit of background on some of that, see my previous posts).
You see, it all starts with internet advert click-through-rates. The last time I looked – and I must confess that I haven’t checked for a while (but very much doubt if things are today much different) – on average, internet banner adverts in the US get a click through rate of around 0.1% (that’s one in 1000, to be clear)
(Not for nothing, but one of my favourite facts from this same study suggests that Facebook achieves half of this (one in 2000), whilst Google get four times this (one in 250), almost 10 times that of Facebook. Curious indeed.)
Anyway, my point is this: the online advertising machine – the same one that over-valued Facebook at their IPO and according to Doc Searls is in a bubble – needs ever more data every day to stay relevant. It needs to gather up increasing amounts of juicy data about things like our habits, preferences, transactions, shopping trips and travel plans. In an effort to improve a terribly low rate of 0.1%, it’s understandable that marketing teams all over the world are asking for more data. Data about you, about people like you, and about people like people like you. And their friends.
The thing is as they gather more data, it all ends up on a spectrum of ‘use-value’ (as opposed to ‘sale value’ – see this great post for more). At one end of the spectrum the use-value is zero. The data is wildly wrong; it clogs up the customer relationship management (CRM) tools of our businesses, and fuels badly targeted ads and other ‘personalised’ services which in turn clog up our daily lives and devices.
At the other end of the spectrum the use-value is huge. The data can be used to deliver helpful, timely and relevant services to the right person at the right time. But the problem here is two-fold: First, the service is often ‘targeted’ at a ‘consumer’ that is ‘owned’ by an organisation. The purpose is purely commercial, and is really just about finding qualified leads for another sale. The individual is rarely actually involved. Second, it’s only when the data gets really accurate that we begin to ask questions about who has our data and why. We start to ask questions about trust.
When an organisation has worked out where you are, what you’re doing, possibly who you’re with, what you might need and when, we begin to wonder what else they know, what other data they have and what else might it be used for. It’s taken the public debate around PRISM both in the USA and Europe for us to reflect on what data we’re comfortable sharing with others (perhaps in the name of security) and what data we’d rather keep to ourselves.
And so personalisation is a tricky business. It’s about finding the balance of use-value for the individual and use-value for the organisation. When we get it right, everyone wins. But when we don’t, our businesses waste time and money and our lives get noisy; worse, we can sometimes lose trust – not only in the people or organisatoins involved, but in the whole system.
This is the first post about personalisation. It’d be good to get your thoughts – which companies get it right and why? What do they do that’s different?
I’ll bet that some have found a better way to spend money than on a 1-in-a-1000 advertising lucky dip. And they don’t irritate us in the process.