The Challenge of Personalisation

Back in the early 1800s, before the Industrial Revolution and the advent of modern transport, most of western civilisation lived in small rural communities. Everyone knew each other’s personal information – not just names, birthdays, or hobbies – but also intimate information such as past relationships and even sexual orientation. The recent explosion in the public availability of personal data is returning us to those times, writes Harvard University fellow, Adam Tanner, in his 2014 book What Stays in Vegas. Everything about an individual is known to the wider community, but that community now means corporates rather than individuals, Tanner says.

Tanner highlights the example of Las Vegas casinos, which push the use of personal data to extremes. For example, some casinos use retina recognition technology to personalise the behaviour of a slot machine to encourage gamblers to keep putting their dollars into a particular machine. However, the reality for most companies is that the personalisation journey is only just beginning and they are a long way from the wild-west frontier of Tanner’s casinos.  Most executives just need a simple approach to understand personalisation and get started.

It’s worth noting the subtle distinction between personalisation and customisation. Customisation is when consumers nominate a particular set of features, for example the “large-soy-skim-flat-white” you order at your favourite coffee shop.  Personalisation is when companies anticipate users’ needs to create an individualised experience just for one person: for example the barista starting to prepare your favourite coffee when you walk in the door if you’re known to always order the same type of coffee.

I’ve found a simple framework is to think about three different types of personalization: content, product and service.

Content personalisation is about predicting the content a customer is likely to prefer based on their past behaviour. Well-known digital example are iTunes and Netflix, which serve up different content for every customer, based on their previous transactions (and also purchases that were not completed).  The biggest challenge in using content personalisation for most non-tech companies is not a lack of data, but being able to use and interpret it.

Service personalisation is still a novelty in most mass-market industries. Disney is a company leading the way with its Disney MagicBand, a personalised wristband with a 40-foot radio beacon: enter one of its restaurants in DisneyWorld and the greeter will already know your name as you approach and the kitchen will immediately start preparing the meal you pre-ordered.

For those retailers offering home delivery, we’re now seeing increasing opportunities to personalise deliveries so it works best for their customers. One example is a partnership between the car maker, Audi, and online retailer, Amazon. A courier will deliver goods directly to your parked car using a smart key that unlocks the car boot.

Product personalisation is already well under way. Footwear companies such as New Balance now offer mass personalisation. They can create shoes and clothes moulded exactly to a customer’s body shape.  Another potential game-changer is the advent of 3D printing, which means all of us can create products directly in our own homes, bypassing the need to visit the shops or even arrange a home delivery.

There is a lot of hype and excitement about the frontiers of personalisation but the reality for most companies is they just need to get started. The first – and often toughest – step is cleaning up your data so it can be reviewed and interpreted.  Next, you need to invest in the technologies that allow you to personalise content, products and services.