Personalization as driving belt for digital transformation? A reality check.

5th RICHMOND MARKETING FORUM
5th RICHMOND
MARKETING FORUM
GRAND RESORT BAD RAGAZ
29TH JUNE – 1ST JULY 2017

PERSONALIZATION AS DRIVING BELT
FOR DIGITAL TRANSFORMATION?
A Reality Check.
Dr. Thomas Walter
Senior Principal Consultant, Namics AG

Your symptoms come with googling.
stomach
pain
a,er
ea/ng

Googling for „personalization in marketing“ will lead
you towards „information“ like the following:

The challenge lies in filtering “signals from noise”.

Let’s
have
a
closer
look

on
what
is
happening
on

the
market
right
now.

My Perception.
Personalization is like teenage sex.

–  Everyone
talks
about
it.

–  Nobody
really
knows
how
to
do
it.

–  Everyone
thinks
everyone
else
is
doing
it.

–  So
everyone
claims
they
are
doing
it.1

Contrary, you are ...
–  In
marke/ng
for
some
years.

–  Decision
makers
with
own
budgets.

–  Reluctant
to
hear
yet
another
sales
presenta/on.

–  Used
to
sweet-‐talk
of
providers,
so,ware
companies,
agencies,
etc.

–  Aware
of
panic-‐mongering
studies
that
‘proof’
that
you
deﬁnitely

have
to
invest
know.

–  S/ll
curious
what
is
really
behind
the
issue
of
‘personaliza/on’
and

the
if,
the
why
and
the
how
you
should
tackle
it.

04.07.17

Hence,
it‘s time to take a step back, and do a reality check.

MARKETING

REALITY

Conferences
Mee5ngs

Keynotes
Reports

TYPICAL

SCENARIOS

Mee5ngs

Keynotes
Reports

“Personaliza5on
is
about

the
‘segment
of
one’,
a

totally
individual
oﬀering
to

each
client.”

TYPICAL

SCENARIOS

Reality Check (1/4).
Myth

“Personaliza/on
is
about
the

‘segment
of
one’,
a
totally
individual

oﬀering
to
each
client.”

Reality

?

Basic idea: Good personalization does the job of a
client advisor.
Understanding
the
context:

1)  Our
new
showroom

2)  They
checked
out
model
i5

3)  We
close
in
20
min

Understanding
the
segment:

4)
male,
30-‐35,
European

5)
cloths/
style
speak
of
wealth

6,
7)
a
couple,
but
not
married

Knowing
the
customer:

8)
His
Name
is
Thomas,
he
lives

nearby
and
he
bought
an
Z3
only

two
years
ago.

5

7

4

6

3

2

1

8

The challenge: Finding a sweet spot for the amount
of personalization somewhere between 1:n and 1:1.
2)
But
if
“1:1“
means
managing
and
producing

individual
experiences
for
every
customer,
our
costs

in
marke/ng
would
explode.
Then
again,
there
is
no

u/lity
for
us.

1)
A
watering-‐can
approach
is
no
longer
accepted
by

the
customer.
Hence,
any
ini/al
invest
in

personaliza/on
will
take
us
away
from
1:n
and

hence,
gain
our
u/lity
for
marke/ng.

3)
A
sweet
spot
of
personaliza/on
the
amount
where

you
get
the
most
u/liza/on
for
your
marke/ng,
a

point
where
marginal
gains
reach
zero.

*
let’s
say
X
=
personaliza/on

2
1

3

Example: The sweet spot for the car salesman/
client advisor might be, to consider 4 segments.
Configure your
convertible now!
Website
Test-drive this
limousine around
your neighborhood
Website
Test-drive your
recently configured
i5 model now!
Website
These suplements
for your Q5 help to
avoid winter-risks.
Website
Segment:
«fun-Lover»
Segment:
«comfort lover»
Segment:
«converted: model
configured»
Segment:
«connected: model
purchased»

Case Study: Pathê.
Create the personalized cinema experience!

From insight to action. First step: Deepening our
understanding about the customer.
Exemplary
user
journeys
of
cinema
visitors
based
on

mul5ple
qualita5ve
interviews

(32
interviews
a
45’
conducted).

First
insights
(exemplary):

•  The
unique
atmosphere
of
the
cinema
is
central
to
the
overall

cinema
experience.

•  The
cinema
experience
is
a
shared
experience.

•  …

Derived
hypothesis
(exemplary):

•  The
customer
journey
is
determined
by
the
context
of
the
visit.

Therefore,
the
context
is
essen/al
for
segmenta/on.

•  …

INSPIRATION & CONSIDERATION EVALUATION CONFIGURATION & PRIMARY TRANSACTION PREPARATION & SECONDARY TRANSACTION MOVIE EXPERIENCE BONDING & ADVOCACY
ACTUAL USER JOURNEY
OPTIMAL USER JOURNEY
ACTUAL VS. OPTIMAL USER JOURNEYUSER JOURNEY - EXPERIENCE SHARER
Movie Phase
1
4
3
External trigger
(e.g. radio movie evaluation, TV ad or friends
talking about a particular film)
6
Tickets
Arrival at the theater
Pathé.ch is checked
- watch the movie
2
- visits Pathe.ch on mobile
- goes straight to Pathé Dietlikon
Programm page
Find fitting time, place and movie
-Alignment with family and friend(s) using Whatsapp
- buy tickets at the
counter
Contextual Activities5
Acitivties afterwards
no movie found
no interesting
things to share
Concessions are purchased
has a seat with a
person in front of
him
weather is good
- buy tickets online
and print them at
home
In the mood to go out
with friends
(going to the cinema is a lead option)
Google Research
- remembers several movie names
- checks further information about the movie on
Google (focuses on results appearing first)
- interested in ratings and pictures
- checks Pathé webpage again
for movie schedule
Weather is bad
- goes to Pathe.ch
directly for movie
schedules as it is his
favorite cinema
Checks Pathé.ch
Tickets3
- go for food close to the theater
- go shopping
- go for drinks
- buys popcorn and a drink
7 8
no convenient time, place
or movie are being found
F-08
Group recommendations
- Movie recommendations for
groups based on their profiles
(preferred movies, directors or
actors)
F-12 Date, place and movie
alignment
- Integration of Whatsapp: Export text and
links to Whatsapp
- Finder-functionality (e.g. Doodle) on website
- Organisator gets reward
F-07 Groups
- Adding friends to the profile
- Invite friends to the website
- Group promotions
Movie Phase
1 4
3 7Tickets
Pathé.ch
- watch the movie
2
- goes straight to the
movie overview page
Find fitting movie, time and place
- Alignment with family and friend(s) using
Whatsapp
counter or vending
machine
- enjoy the theater atmosphere
- sharing the theater visit on
Social Media
- talk about the movie with
group/friends/co-workers
- further activities with group
(e.g. go clubbing)
with friends
Tickets5
8 9
Contextual Activities
6
- go for food close to the
theater
- go shopping
- go for drinks
Social Media
F-14 Share Ticket
- Share tickets and reservations
with friends/groups using Mail or
SMS
F-15 Split the bill
- Paymit integration
F-17 Movie rating
- Push notification (Whatsapp, Mail,
SMS):
Step 1: How did you enjoy the movie?
Step 2: Whats next
External Research
- Cineman, Google
- Checks further information
about the movie (trailers,
plot, rating etc.)
- forwarded directly to
the respective movie
detail page
Pathé.ch
Weather is bad
F-16 Share activities
- Branded photo-corner with speech
bubbles, movie utilities or movie
characters
Option A: Selfie-stick/Pathé employee
Option B: Photobox
- Gifarator
Social Media
(e.g. go clubbing)
F-13 Free view
- Possibility to temporarely
reserve the seat in front of you as
well (until the auditoria is booked
to a certain point)
F-01 Newsletter
- Weather (rainy or hot) or season
based
- Time based special offers
- Loyality program
F-04 Drive to online
- Incentives through loyality
program and promotions
- In case of line suggest to
use the online channel
INSPIRATION & CONSIDERATION EVALUATION CONFIGURATION & PRIMARY TRANSACTION PREPARATION & SECONDARY TRANSACTION MOVIE EXPERIENCE BONDING & ADVOCACY
ACTUAL USER JOURNEY
ACTUAL VS. OPTIMAL USER JOURNEYUSER JOURNEY - EXPERIENCE SHARER
Movie Phase
1
4
3
External trigger
(e.g. radio movie evaluation, TV ad or friends
talking about a particular film)
6
Tickets
Pathé.ch is checked
- watch the movie
2
- visits Pathe.ch on mobile
- goes straight to Pathé Dietlikon
Programm page
Find fitting time, place and movie
-Alignment with family and friend(s) using Whatsapp
counter
Contextual Activities5
no movie found
no interesting
things to share
has a seat with a
person in front of
him
weather is good
and print them at
home
with friends
Google Research
- remembers several movie names
- checks further information about the movie on
Google (focuses on results appearing first)
- interested in ratings and pictures
- checks Pathé webpage again
for movie schedule
Weather is bad
- goes to Pathe.ch
directly for movie
schedules as it is his
favorite cinema
Checks Pathé.ch
Tickets3
- go for food close to the theater
- go shopping
- go for drinks
- buys popcorn and a drink
7 8
no convenient time, place
or movie are being found
F-08
actors)
alignment
links to Whatsapp
F-07 Groups
- Group promotions
Movie Phase
1 4
3 7Tickets
Pathé.ch
- watch the movie
2
movie overview page
Whatsapp
counter or vending
machine
Social Media
(e.g. go clubbing)
with friends
Tickets5
8 9
6
theater
- go shopping
- go for drinks
Social Media
F-14 Share Ticket
SMS
F-15 Split the bill
F-17 Movie rating
SMS):
Step 2: Whats next
External Research
- Cineman, Google
plot, rating etc.)
detail page
Pathé.ch
Weather is bad
characters
Option B: Photobox
- Gifarator
Social Media
(e.g. go clubbing)
F-13 Free view
to a certain point)
F-01 Newsletter
based
- Loyality program

Next: Testing our hypothesis reveals two essential
factors why people actually go to the cinema.
Movie Passion:
„I go the cinema because movies are a
passion of mine“
Average Visitor Count:
„How many people accompany
you to the cinema?“
Visit Frequency:
„How often do you
go to the movies?“
Experince Sharing:
„I go to the cinema to spend
time with others.“
Leisure Routine :
„Cinema is part of my
leisure routine“
Cherry Picking:
„I prefer to watch certain
movies at the cinema“
Atmosphere Affinity:
„I go the cinema to enjoy
the special atmosphere“
Source: Pathé Online Customer Survey 2015, n = 9980, CH-DE/CH-FR
Movie&CinemaFocus

Social Focus

Based
on
mo/va/on
for
cinema
visit
(6
items),
visit
frequency
&
group
size.

An additional cluster analysis allows us to define
statistically relevant customer segments.
Social Focus
Movie
&

Cinema
Focus

SocExg.=
Social
Exchange
(“I
like
to
talk
with
others
about
movies
and
share
my
opinion”),

SocInﬂ.
=
Social
Inﬂuence
(“It
is
o,en
my
idea
when
I
go
to
the
cinema
with
others”)
Movie Passionate
15 %
SocExg.: 80 IDX
SocInfl.: 91 IDX
Social Movie Passionate
35 %
SocExg.: 111 IDX
SocInfl.: 122 IDX
Experience Sharer
38 %
SocExg.: 110 IDX
SocInfl.: 108 IDX
Cherry Picker
12 %
SocExg.: 81 IDX
SocInfl.: 87 IDX
Social Focus
Movie
&
Cinema
Focus

Further analysis detects, that those segments
correlate with customers locality.
Social Focus
Movie
&
Cinema
Focus

Movie Passionate
15 %
Social Movie Passionate
35 %
38 %
Cherry Picker
12 %*
*High probability underrepresentation due to sample bias (Newsletter, Website, Social Media)
Rather
located
in
the
german

speaking
parts
of
Switzerland

Rather
located
in
the
french

speaking
parts
of
Switzerland

Personalization means: If customers are that different
in requirements we need to personalize our offering.
Exemplary
challenge:
How
do
people
want
to
select
a
movie,

pick
the
cinema,
the
date
and
the
/me,
…
?

F-08
actors)
alignment
links to Whatsapp
F-07 Groups
- Group promotions
Movie Phase
1 4
3 7Tickets
Pathé.ch
- watch the movie
2
movie overview page
Whatsapp
counter or vending
machine
Social Media
(e.g. go clubbing)
with friends
Tickets5
8 9
6
theater
- go shopping
- go for drinks
Social Media
F-14 Share Ticket
SMS
F-15 Split the bill
F-17 Movie rating
SMS):
Step 2: Whats next
External Research
- Cineman, Google
plot, rating etc.)
detail page
Pathé.ch
Weather is bad
characters
Option B: Photobox
- Gifarator
F-13 Free view
to a certain point)
F-01 Newsletter
based
- Loyality program

Example: Personalized decision making process
for the segment “Social Movie Passionates”.

Additionally, personalization means using the
customers context.
The
customer’s
allocated
segment
(like
“social
movie

passionates”)
can
be
defined
by
the
customer’s

loca/on
or
a
recently
selected
cinema.
Based
on
such

segment
a
feature
(like
the
movie-‐sheduling)
might
be

more
visible
in
western
Switzerland
than
in
eastern.

Addi/onally,
the
move-‐scheduling-‐feature
adopts
the

customers
context,
defined
by
the
used
technology.

Hence,
the
feature
offers
to
use
Whatsapp
if
the

customer
uses
a
mobile
device
and
Doodle
if
the

customer
uses
a
laptop.

Myth

“Personaliza/on
is
about
the
‘segment
of

one’,
a
totally

individual
oﬀering
to
each

client.”

Reality

-‐  If
your
product
doesn’t
allow
1:1

personaliza/on,
the
idea
of
having
a

“segment
of
one”
is
a
myth
(e.g.
cinema,

car,
banking).

-‐  Personaliza/on
o,en
works
best
on
the

basis
of
segments.

-‐  Therefore
it
is
key
to
understand
you

customer’s
needs.

-‐  Try
to
deﬁne
your
sweet
spot
between
1:n

and
1:1
and
start
crea/ng
personalized

experiences
for
each
segment.

Keynotes
Reports

“Personaliza5on
is
about

the
‘segment
of
one’,
a

totally
individual
oﬀering
to

each
client.”

“Personaliza5on
is
about

the
‘segment
of
one’,
a

totally
individual
oﬀering
to

each
client.”

TYPICAL

SCENARIOS

Myth

“Personaliza/on
is
too
complicated

for
us
and
we
ain’t
got
the

organiza/on
for
that.”

Reality

?

How complex is personalization and how do we
start to personalize?
We
suggest
to
consider
the
following
aspects
in
order
to
start
with
your

personaliza/on
project.

Business goal
framework
Data basis
Customer
segments
Customer
journeys1 2 3 4
Goals
Sucess-
Factors
Digital
Activities
Performance Metrics
Key Performance Indicators

Typical goals that are set for personalization
endeavors.
Fostering
Online Sales
Strengthening
customer loyality
Generating
leads
Becoming
„Top of Mind“
Becomeing
more efficient
Knowing our
customers

Essential step: Finding and defining your data
sources that are the basis for personalization.
Technical

Context

•  Device-‐Type
(Tablet)

•  Device
(iPhone
6)

•  Browser
(Firefox)

•  Carrier
(Vodafone)

•  Connec/on
(3G)

Local

Context

•  Geo-‐IP
(city

country)

•  GPS
(near
POS)

•  Wlan
(indoor)

•  Beacons
(indoor)

•  Weather
@user

Time

Context

•  Time

at
the
customer

•  Day
of
week
(Mo-‐So)

•  Season
(holiday)

•  Visit
dura/on

•  Time
on
page

•  Avg.
/me/
page

Customer

Behavior

•  Referrals
as
Links,
URLs,

Campaign-‐IDs,
Social

Plaqorm,
internal
Blog,

etc.

•  Likes,
clicks,
views,

Usage
of
services

(booking,
configurators,

etc.)

Customer

Loyality

•  Returning
(y/n)

•  Visit
#
(2.,5.,
etc.)

•  Involvement
(clicks)

•  #
pages/
session

•  Video
watched

•  Newsar/cle

liked

Defined
Customer

Segment

•  Private
customer

•  Corp.
Ins/t.
Clients

•  Young
Families

•  Moved
recently

•  Internal
user

•  Mult
service
user

CRM

Informa5on

•  Name
(Login)

•  E-‐Mail

•  Company

•  Last
Contact

•  Slaes
history

•  Topic
interest

Market
specific

informa5on

•  Market
size
(#user)

•  Market
share
(%)

•  Opponents
(URLs)

•  Demographics
(age)

•  Historical
development

3rd
party
-‐

Informa5on

•  External
Segment-‐Info

from
3rd
party
cookies

•  Traits
like
„father,,
car

fana/c,
interested
in

funds,
reads
NYT,
Sport

lover,

...“

Company
Specific

Informa5on

•  Point
of
Interest
(POI)

•  Opening
/mes

•  Client
advisors/

POI

•  PIM
(Product-‐
Info)

•  PIM
(categories)

•  Discount
&
Promo/ons

Social
CRM

Informa5on

•  Topic
interests

•  Likes,
shares,
tweets

•  Social
Engagement

•  Social
Graph

•  Social
Rank

•  Family
situa/on

Unstructured

Data

•  Mails
(Text)

•  Comments
(Text)

•  Clicktale
and
browser

usage
(App
usage)

•  Feedback
(Text)

Defining the output channels, spots where you
want to offer and deliver personalization.
Webseite/
Elements

•  Page
types
(Home,
spez.

Topic
Home,
About-‐us-‐
Page,
etc.)

•  Components
(Text/

Image,
Teaser

Download,
Contact-‐Info,

etc.)

Custom
Web-‐App

•  Search/
Input
field

•  Extended
search

•  Search
results
incl.

Images,
tables

•  Promo-‐Teaser

•  Watchlists

•  Configurators

Customer
Portal

•  Login-‐page

•  Home

•  Bookmarks

•  Navigator
Apps

•  Customer
center

•  Easyorder

•  Logout-‐page

Newsleher/
Mail

•  Gree/ngs/
Welcome

•  Text/
Image

•  CTA
(Buvons)

•  Deeplinks
to
Pages

•  Avachements
(pdfs)

•  ...

Mobile
App

•  Search/
Input
field

•  Promo-‐Teaser

•  Watchlists

•  Configurators

•  Push-‐No/fica/ons

Mobile
Portal

•  Login-‐Seite

•  Home

•  Push-‐No/fica/ons

•  Bookmarks

•  Navigator
Apps

•  Customer
center


Social
Media

•  Facebook

•  Twiver

•  Instagram

•  LinkedIn

•  Xing

•  etc.

Shop

•  Home

•  Product
finder

•  Teaser/
Promo

•  Basket/
checkout

•  Search
results

•  Register-‐page


Digital
Signage

•  Screen
(total)

•  Text/
Img

•  Welcome-‐Message

•  Loca/on-‐specific
device

•  Teaser

Company
Specific

Informa5on

•  Point
of
Interest
(POI)

•  Opening
/mes

•  Client
advisors/

POI

•  PIM
(Product-‐
Info)

•  PIM
(categories)

•  Discount
&
Promo/ons

Crossing data basis with output channels creates
a nice playground for brainstorming.
Let’s
consider
the

car-‐selling
example:

How
might
we
make
the

customer
experience

more
personal
using
the

Hero
visual
teaser,
if
we

already
know
that
the

customer
is
within
the

“fun
seeking”
segment?

?

Personalization means creating more content and
thinking about texts, images, videos, etc. in different
shape, style or tonality.
Element:
Hero Visual
on Home
Text element &
picture element
Situa5on

Segment

Default
Journey

Stage
1

Journey

Stage
2

Journey

Stage
3

Default

Segment
1

Segment
2

Imagine
you
want
to
personalize
the
homepage
hero
visual
for
3
speciﬁc
segments
and
4
stages
within
a

deﬁned
customer
journey:
Instead
of
1x
you’ll
now
need
to
create
12x
text
&
image.

Typical counter-argumentation at that point: “Ok, but we do not have
all that information to create those segments.”
Simple trick: Enhance your data basis and ask.
hvps://www.namics.com/project/swiss-‐life-‐themenﬁnder/

Another one: “Ok, but it will take ages to implement and test all those
personalized experiences, and we ain’t got people, time and money for
that. Simple trick: Use the right tool.

Final one: “Ok, so who can do the job? My analytics guy or the
SEO guy or the content guy or who?
Consulting answer: It depends.
Personaliza5on
(3)

Myth

“Personaliza/on
is
too
complicated
for
us

and
we
ain’t
got
the
organiza/on
for
that.”

Reality

-‐  Execu/ng
personaliza/on
is
not
too

complex,
but
it
takes
some
eﬀort.

-‐  We
suggest
to
start
with
following
your

business
goals
and
then
ﬁnding
the
best

possible
personalized
experiences

based
on
your
data

-‐  Everyone
has
data,
no
user
is
really

anonymous
nowadays

-‐  Create
a
central
role
within
the

marke/ng
department
and
also
invest

in
tool-‐handling.

Keynotes
Reports

“Personaliza5on
is
about

the
‘segment
of
one’,
a

totally
individual
oﬀering
to

each
client.”

“86
%
of
all
marketers
say

that
personaliza5on
is
the

key
to
more
sales.”

“Personaliza5on
is
too

complicated
for
us
and
we

ain’t
got
the
organiza5on

for
that.”

TYPICAL

SCENARIOS

Reality Check (3/4)
Myth

“86
%
of
all
marketers
say
that

personaliza/on
is
the
key
to
more

sales.”

Reality

?

Where do statements like that come from and do
they even make sense?
It
is
easy
to
create
a
link
between
a

personalized
offering
and
the
wishful

scenario
that
economists
call
perfect

price
discrimina5on.

Best
example:
A
bartender
offers
beer
based
on

a
customers
preferences
but
also
defines
the

prize
of
each
bovle
individually
based
on
age,

context
and
journey
stage,
e.g.
1st
beer:
CHF
10

as
a
customer
might
look
rich
and
thirsty

enough,
2nd
beer
CHF
7,
3rd
CHF
7
again
as
the

bartender
knows
that
the
customer
is
always

having
a
4th
one
for
that
price,
etc.
un/l
he

reaches
his
reserva/on
price.

At best, personalization is aligned with the aims of
price discrimination.

Basis argumentation: You will boost your
conversion funnel due to a personalized offering.
Multi-Funnel w/ personalized offerings
Won Won Won Won
Funnel w/ unpersonalized offering (1:n)
Lost LostWon
?

Case Study: Smart.
Create the personalized car purchase decision.

Basis for all ROI calculations. Understanding of the
customer journey and the conversion funnel.
Contacted dealer
Product
detail page
Signing up purchase
First visit
to website
Car configrator
Saved
configuration Test drive
Customer
Relationship
Management
Customer

Calculations are usually based on a standardized
conversion funnel (reach to conversion).
Funnel w/ unpersonalized offering (1:n) How
it
is
calculated:

Eﬀect
and
costs
of
all
marke/ng

ac/vi/es
will
scale
by
the
basic
reach.

Example:
If
10.000
website
visitors

(reach,
R)
result
in
50

test-‐drives

(conversion,
C),
then
the
conversion

rate
(cr)
is
0,5%.

Hence,
if
the
cr
remains
stable,

20.000
visitors
will
result
in
100
test-‐
drives.

Conversion

Reach
R

C

Our goal: Convert a passerby into signing-up for a
test-drive (ultimate online conversion).
Passerbys
1. Website visit
Default Experience Wide target group message (suitable for multiple segments), default teaser.

Explorers
Configurator
Default Experience
Visitor saves configuration (stored in cookie, w/o login).

Experience with personalized hero visual + test drive options highlighted
Stage: Consider
Involved
Returning visit
Personalized visual

Our goal: Convert a passerby sign up for a test-
drive (ultimate online conversion).
Location based dealer finder.
Leads
Händlersuche
Geo-Targeting

Personalization calculated like process
automation: Same reach, but higher conversion.
How
it
is
calculated:

Personaliza/on
works
like
automa/on,

e.g.
preﬁlled
forms,
remembering
user

input,
etc.
based
on
known
data.

Addi/onal
costs
vs.
argumenta/on
for
a

higher
cr
(C
to
C’
for
the
same
reach
R).

Example:
If
10.000
website
visitors
(R)

result
in
50

test-‐drives
(C)
for
default

visual,
but
in
100
test-‐drives
(C’)
for

personalized
visual.
The
cr
is
boosted
by

100%.

Reach
R,
R’

Personalized funnels based on process automation.
Conversion

C’

C

personaliza5on

Involved
Visit 3rd party pages
Ad w/ config. model Retargeting on 3rd party pages with configured model.

Leads
Saved config.
Mail w/ config. model
Personalized mailing with configured model. Invitation to test-drive at local dealer.

Personalization calculated like targeting segments:
Smaller, but more precise reach, higher conversion.
How
it
is
calculated:

Personaliza/on
works
like
precise

targe/ng,
e.g.
only
addressing
customers

who
are
most
likely
to
buy.

Addi/onal
costs
(e.g.
predic/ve
analy/cs),

but
the
hypothesis
is
that
a
way
higher

percentage
of
customers
will
buy.

Example:
If
10.000
website
visitors
(R)

result
in
50
test-‐drives
(C)
for
default

visual,
but
2000
personalized
mailings
(R’)

in
35
test-‐drives
(C’).
The
cr
is
boosted
by

12.5%.

Multi-Funnel w/ personalized offerings
Conversion

Reach
R’

C

C’

personaliza5on

R

Results of all activities: Significant leverage of the
online conversion.

But on the other hand: What did it it take to
“produce” a personalized offering?
–  The
ideas

–  The
so,ware

–  The
people

–  The
processes

–  The
rollout

–  The
management

–  The
overhead

–  The
nerves

–  …

Myth

“86
%
of
all
marketers
say
that

personaliza/on
is
the
key
to
more
sales.”

Reality

-‐  Be
careful
with
statements
like
these:
Some

are
made
based
on
a
lack
of
understanding

(it
is
not
about
monopoly
returns)

-‐  In
most
cases
we
see
indirect
eﬀects
on
sales

revenues

-‐  But
it
is
always
super
hard
to
determine

eﬀects
exactly

-‐  Please
do
not
mashup
sales
revenues
with

ROI

-‐  Most
important:
Focus
on
goal

measurement.
At
best,
measure
the
success

for
each
single
step

of
the
customer
journey.


Nellix
are
top
of
class
when

it
comes
to
personaliza5on

–
do
it
like
them
to
be

successful.”

Reports

“Personaliza5on
is
about

the
‘segment
of
one’,
a

totally
individual
oﬀering
to

each
client.”

“86
%
of
all
marketers
say

that
personaliza5on
is
the

key
to
more
sales.”

“Personaliza5on
is
about

the
‘segment
of
one’,
a

totally
individual
oﬀering
to

each
client.”

TYPICAL

SCENARIOS

Myth

“Neqlix
are
top
of
class
when
it

comes
to
personaliza/on
–
do
it
like

them
to
be
successful.”

Reality

?

First: Is Netflix successful?
The answer is yes.

Second: Did Netflix totally reinvent personalization
or recommender engines? No.

Third: Does Netflix care about personalization or
recommender engines? Yes, a lot!

Fourth: Are they best in class?
Well, the question is: Who decides who’s best in class?

In fact, the algorithm had to fight a so called cold
start problem, building up all customer profiles.
Example:
Thumbs
up
for
“The
Hangover”
+
“The
Hangover
2”
results
in
a
68%
matching
for
“The

Hangover
3”,
but
a
92%
matching
for
“The
Lion
King”?

But more importantly, does Netflix think they will
ever be “finished” with personalization? No!

Current open job positions for issues like
“recommendation” or “personalization”.

Final question: Do we need to do it like Netflix?
–  Are
you
ren/ng
movies
or
providing
a
video
plaqorm?

–  Are
you
opera/ng
online-‐only?

–  Is
your
business
model
based
on
subscrip/on
fees?

–  Are
you
a
VC-‐ﬁnancend,
US-‐based
company
with
an
aggressive
growth
strategy?

–  Is
your
target
customer
segment
simply
everyone
between
20
and
55
years
of
age?

–  Does
your
marke/ng
department
include
40
people
working
on
a
single
algorithm?

Myth

“Neqlix
are
top
of
class
when
it
comes
to

personaliza/on
–
do
it
like
them
to
be

successful.”

Reality

-‐  Neqlix
is
top
of
class,
but
also
they
can

can
fail

-‐  There
is
no
impera/ve
of
doing
it
like

Amazon,
Neqlix
or
Spo/fy

-‐  It
is
not
the
“what
they
do”
but
the

“how
they
do
it”
where
we
can
learn

the
most

-‐  Neqlix
again
shows
us
the
importance

of
tes/ng.

-‐  Never
underes/mate
eﬀects
of

“serendipity”
while
looking
for
best

prac/ces
in
the
silicon
valley.

SUMMARY


Nellix
are
top
of
class
when

it
comes
to
personaliza5on

–
do
it
like
them
to
be

successful.”

Reports

“Personaliza5on
is
about

the
‘segment
of
one’,
a

totally
individual
oﬀering
to

each
client.”

“86
%
of
all
marketers
say

that
personaliza5on
is
the

key
to
more
sales.”

“Personaliza5on
is
about

the
‘segment
of
one’,
a

totally
individual
oﬀering
to

each
client.”

TYPICAL

MYTH

Reports

Nellix
are
top
of
class
when

it
comes
to
personaliza5on

–
do
it
like
them
to
be

successful.”

“Personaliza5on
is
about

the
‘segment
of
one’,
a

totally
individual
oﬀering
to

each
client.”

“86
%
of
all
marketers
say

that
personaliza5on
is
the

key
to
more
sales.”

No,
it’s
not.

“Personaliza5on
is
about

the
‘segment
of
one’,
a

totally
individual
oﬀering
to

each
client.”

I
don´t
think
so.

No,
it’s
not.

Not
the
point.

CONCLUSION


Don’t
believe
in

impera5ves.
There
never

has
been
a
collapse
due
to

the
lack
of
personaliza5on.

Look
behind
the
scenes.

Reports

Pursuit
your
individual

sweet
spot,
the
amount
of

customer
segments
that
you

can
handle
in
marke-‐

5ng.

Look
at
the
issue

step
by
step
within
the

customer
journey
that
you

strive
for.
Measure,
but
do

not
mash
up
conversion

rates
and
ROI.

Remember
your
business

goals,
take
a
look
on
your

data
and
channels,
make

a

concept,
select
a
tool

and
start.

ADVICE


Don’t
believe
in

impera5ves.
There
never

has
been
a
collapse
due
to

the
lack
of
personaliza5on.

Look
behind
the
scenes.

Reports

Pursuit
your
individual

sweet
spot,
the
amount
of

customer
segments
that
you

can
handle
in

marke5ng.

Look
at
the
issue

step
by
step
within
the

customer
journey
that
you

strive
for.
Measure,
but
do

not
mash
up
conversion

rates
and
ROI.

Remember
your
business

goals,
take
a
look
on
your

data
and
channels,
make

a

concept,
select
a
tool

and
start.

STRATEGY

Thank you.

Personalization as driving belt for digital transformation? A reality check.

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