5 ways to navigate the Waves of Personalization

Building meaningful and personal connections between brands and customers is easier and yet harder than ever. Big technological and social developments have an observable effect on the playing field of companies, causing waves of personalization. With each wave come new possibilities to personalize, but ultimately the effects are gradually diminishing as other brands catch up. Companies have been riding these waves for decades, but each one seems to become increasingly difficult to surf.

Customers are more aware than ever of how their personal data is used and demand greater transparency and control over it, leading to the wave of trust. The challenge that arises from this wave is the Personalization Paradox, the balancing act between customization to meet customer needs and maintaining privacy and data security. While privacy and cookie laws are already strengthening the customer’s position, companies must also recognize that trust is not an option; it is a crucial element that forms the foundation for the success of every customer relationship.

Just when marketeers seem to have a handle on the challenge of the wave of trust, another one unfolds. Customers are seeking authenticity, emotional resonance, and trust in their interactions with brands – the wave of authenticity. This need may not sound novel, but the challenge lies further from shore, marked by ongoing AI developments that rise customer expectations once again. As marketers start to collaborate with Gen AI tooling to produce contextual and personalized experiences at an unprecedented speed, authenticity will get more attention. These experiences are personalized, but they might not feel ‘personal’ anymore to customers. Combining this feeling and the perception that the use of AI often lacks transparency, a question arises: Will customers still feel a genuine connection with your company or brand if they are mostly interacting with AI? While AI excels at delivering personalized content to you (or your bot that maybe reads or views it for you), the ability to empathize and have interpersonal communication skills is something that only humans possess. The future of keeping your customers satisfied and staying relevant as a company is about striking the right balance between AI-powered interactions and a human touch.

The importance of preparing for the next waves of personalization has never been greater. From front-line marketeers to top-line CMOs, there is a great challenge ahead to navigating new developments to build meaningful connections. Success in this evolving environment will favor marketeers who can adapt and innovate so get started with these actions:

1. Embrace new technologies but don’t get lost

Customers nowadays expect a personalized experience and technologies like machine learning, AI, and data analytics are enablers that tailor products and services to their individual needs and preferences. Companies that fail to embrace new technologies and platforms risk falling behind. The initial steps toward personalization seem relatively simple, but as technology and data processing become more complex, the associated challenges and technical requirements grow. Investing in too many technologies or complex systems can lead to inefficiency and high costs so it is important to find the right balance between technology adoption and practicality. To avoid getting lost, do not feel the need to just go “all in” on personalization all at once. Test and learn to see what works for your business so you make your investments worthwhile.

2. Keep two-way data transparency on top of the agenda

Customers of today expect full transparency within and across brand experiences. Transparency is a driver of trust and as mentioned before, companies need to understand that gaining trust is like building a long-term relationship. “Zero-party data sharing” will serve as the indicator for this relationship. Zero-party data is information that consumers willingly and proactively share with companies. For example, someone signs up for an account and answers a question about their favorite sports. In essence it is transcending conventional data collection boundaries, and adopting a model in which consumers actively participate as collaborators. Companies that can effectively collect and leverage zero-party data can provide more personalized and relevant experiences while respecting customer privacy and preferences. A win-win situation.

3. Personalization is not about cost saving

A common pitfall in personalization is equating it with automation. Rather than prioritizing a deeper connection with customers through relevant content, products and services, companies tend to be more focused on the cost-saving benefits of digitization and the reduction of customer service teams. Consumers are very sensitive to performative “human” experiences that are not real so when robots pretend to be people, people get turned off. When scaling personalization with technology it often does not feel human at all. To excel in personalization, do not just integrate technology solutions into your channels. Instead, consider going the extra mile by sending handwritten notes after a purchase, welcoming customers by name when they enter a store, or offering unique and tailored recommendations via email based on a customer’s previous purchases. These efforts take investment but will pay you back in loyalty, trust and, on the long run, relationship with your customers.

4. Bring back ‘human’ in digital experiences

Rapid advancement of technology often outpaces human capabilities. While technology evolves swiftly, it is harder than ever to keep up with technology-related skills and apply these newly developed skills in your work. Only 44% of marketeers indicate to have an adequate skill set in areas such as AI and machine learning, or data analytics and data science (CMO Playbook, Capgemini Research Institute). Ensuring current and new talent is equipped with at least a baseline of data and creative skills, while allowing room for specialism, is essential to stay relevant.

Not in every domain technology outpaces us as humans. It is very challenging for automated systems to completely replicate essential human soft skills such as authenticity and empathy. Customers’ need for authenticity is pushing marketeers to strengthen soft skills to ultimately bring the human touch back in their work. Adopting the human factor into your proposition is essential because it can help build emotional connections and trust, adapt nuances, and facilitate feedback, which in turn can increase customer satisfaction and help build lasting relationships.

A recent rebranding by Tele2 and T-mobile, now known as Odido, shows that companies see the importance of combining technology with human touch. With one of their sayings, “We laten je graag zien dat het beter kan, menselijker” (translated as “We are happy to show you that it can be better, more human”), Odidio recognizes that technological advancements are important to customer experience and their telco product, but that their human commitment for their services is what truly sets them apart.

While upgrading your skills as a marketeer, do not underestimate the power of your soft skills to give that human touch that helps set your brand apart in the eyes of your customers. Embrace and reveal your imperfections and setbacks because, in the end, it’s these experiences that make us human.

5. Do not wait for the new generation to hit the market

While many marketeers are still figuring out how to deal with Gen Z, the next generation, Gen Alpha, born between 2010 and 2024, is emerging. This generation is the first to grow up with AI, mixed reality, and spatial computing as the norm. Gen Alpha naturally embraces hybrid experiences and expects instant personalized interaction where the virtual world seamlessly interactions with the physical. Do not wait around and already start evaluating how to scale and build inclusive, comprehensive, and human-centered experiences in a fully hybrid way for this upcoming generation.

The current momentum of the wave of trust and the wave of authenticity provides brands a chance to get ahead of competition. These actions will help marketeers from all levels prepare for the waves that hit the shores already and the waves to come. Do not sit it out, but instead grab your boards to ride the waves of personalization.

About the author: Tim van der Galiën is Senior Manager in Customer Transformation at frog, part of Capgemini, one of the partners of the DDMA Decision Makers Network. As one of our partners Capgemini plays a significant role in the organisation of the 2023 edition of DDMA NEXT on November 30^th, and our biennial Decision Makers Breakfasts. Tickets for DDMA NEXT are available at: ddmanext.nl.

Tim van der Galiën

Senior Manager Customer Transformation | frog, part of Capgemini Invent