Many organizations are exploring how to utilize social media to collect better customer information, which will, in turn, enable better customer communications, improve customer service, build retention, etc. This vision has not been lost on the vendors of personalization technologies, who have pre-announced social media-based solutions. Combining Web 2.0 and personalization, however, seems to blur some of the most basic rules of marketing: those related to exclusivity and exploitation (i.e. "create and maintain exclusivity" and "never exploit your customers"). Will these new solutions deliver real value, or will "personalization 2.0" send customers running?
In their next-gen packaging of personalization, many vendors are touting the merits of smart printing and smart targeting. With smart printing, organizations print only high-value documents, and everything else is delivered electronically or turned off altogether. The information contained within the printed documents is highly targeted in order to provide maximum value to the recipient (smart targeting). This approach seems straightforward enough and makes great business sense for 2010.
Dig a little deeper into some of the prescribed approaches for smart targeting, and things get more interesting. Personalization 2.0 seeks to take smart targeting to the next level by engaging each customer in one-on-one "dialogues" designed to collect very specific information. With this approach, organizations would gain insight into each client's likes, dislikes, purchasing preferences, purchasing plans, budgets, etc. via interactive games on the customer's iPhone, through Facebook or directly on the organization's website.
For example, Joe might play the "Five-Minute Vacation" game while he's checking his online credit card balance. It's a quick diversion that lets him escape from his desk to his favorite hobby, skiing. It also allows his credit card provider to collect enough information from Joe to make highly targeted recommendations about his next vacation. For example, his next credit card statement would include promotions from lodges, resorts and ski rentals located in the exact skiing destination that he selected in the app.
This is where some interesting questions arise about exploitation and exclusivity. While Joe might be amused or even impressed with the first instance of his "smart statement," by the second and third time, he's going to recognize that the games that initially seemed like a fun customer perk are a tactic to get more money out of him. Once he feels exploited, the likelihood that he takes his business elsewhere is very high.
At the opposite end of the spectrum lies exclusivity. Exclusivity is the name of the game in marketing; your target recipient should feel that their involvement with or purchase of your product or service makes them part of a very exclusive club. But what happens if it becomes so exclusive that they are the only member? Joe is a smart guy. He knows that the ski vacation package offered to him in his statement is based on information he provided about his likes. How long do you think it will take before he wonders which ski resort was promoted to his next door neighbors, the Joneses, in their credit card statement? It is possible to take exclusivity too far. If you do, your customer loses interest.
Personalization is a tried-and-true tactic for motivating target audiences to respond in a desirable way, whether it be sustained customer loyalty, upgrading their account or adding additional services. The concepts of smart printing and smart targeting make great business sense, as long as the methodologies and practices behind creating relevant content are respectful of the client base. As it's currently being promoted, personalization 2.0 walks a fine line, one that, if crossed, will quickly alienate customers. When considering your personalization strategies for 2010, ask yourself: Just how personal do you want to get?
KELLEY WEST [email@example.com] is a vice president with Madison Advisors, an advisory fi rm that provides thought leadership, strategic consulting and market research in the print and electronic communications space.