Personalised marketing: Balancing what you can do with what you should do

Mark Cameron

Mark is a world renowned thought leader in digital innovation, customer experience, social media strategy and service design. He is the digital strategy and customer experience columnist for BRW and has had well over 400 articles published in industry publications. Mark is also a regular speaker on customer experience, social media and digital strategy. Currently he is CEO of Melbourne-based customer experience innovation consultancy, Working Three.

With so many new data-driven and targeted marketing techniques now possible, businesses need to be careful they are not simply creating smarter and smarter spam. A recent study reveals some personalised techniques are doing more harm than good.

Developing a simple and effective digital communications strategy isn’t easy. The leadership of a business must have a clear understanding of customers’ needs, the experience they want to create and the steps required to get there. This process will undoubtedly take time and to do it well, organisations need to focus on the long-game.

However, the pressure of demonstrating ‚quick wins’ and short-term performance reporting distracts many businesses from the longer, more strategic view.

The current reliance on behavioural targeting is one example of this. Most of us have had this experience: You start searching online for a product or a service, then you visit a company’s website to browse. Not long after, you’re being bombarded with advertisements from that company.

This is called ‘behavioural targeting’. It gives advertisers the ability to target consumers with personalised messages based on their browsing history and demographic information. It has become increasingly inexpensive and straightforward for businesses to collect and track this type of information. It is then used it to drive short-term tactical activity.

But a new Stanford Graduate School of Business paper, written by Professor Pedro Gardete and Yakov Bart, a professor at Northeastern University, has uncovered an interesting insight about highly targeted and personalised ads – namely, they do not translate to higher profits for companies. It’s not surprising the research shows consumers find those ads frustrating and ultimately meaningless.

The research used game theory to build a mathematical model. This model enabled them to look at the impact of a variety of advertising scenarios. It revealed that in many cases, the most effective approach for consumers is to keep information private and for businesses to track less of it.

As Gardete says: “It might seem counterintuitive to say to a business, ‘collect less data and disclose it,’ but being open about what data a company collects is actually to its advantage.”

The insights from this research suggest many businesses will need to rethink both their digital tactics and overall strategy.

At W3 Digital, when we are talking to clients and marketing professionals, we describe the personalised marketing approach discussed above as creating ‘smarter and smarter spam’. It may work for a short period of time, but the eventual outcome means eroding brand trust.

Creating genuine and meaningful competitive advantage in the digital world means focusing on generating long-term trust with your customers. Companies need to clearly define what customer data they actually need, be transparent about it and, importantly, understand how they are going to use it in a way that delivers value back to the customer.

Those responsible for shaping and driving digital change need to be freed up from the demands of short-term sales reporting. Leadership should encourage them to develop a long-term vision, establishing KPIs that they will hit along the way.

To help sell-in a long term strategy I suggest you:

  • Develop a customer centric financial model
  • Understand and highlight which techniques will positively impact that model, both short and long term
  • Clearly understand and illustrate where potential risks lie (many of the techniques that will provide a short-term gain may present great long term risks)
  • Map out a staged ‘maturity model’ that creates a narrative that stakeholders can support
  • Report on progress frequently

The world has changed. Be bold and focus on your customer. Design for the long term. And remind your management team why chasing short-term quick wins will erode the trust of your customers.

Tags: digital marketing, content marketing, marketing strategy

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