In this opinion piece, Michael Buckley, managing director of Accenture Interactive for Australia and New Zealand, explains why data is the critical fuel to personalisation platforms.
The age of digitisation has given consumers access to an overwhelming number of choices in everything they do, leaving them more likely to be less satisfied with the selections they make. To cut through this online content saturation and simplify the process, companies must engage in hyper-personalisation strategies.
According to recent research by Accenture, 40 per cent of consumers have left a business’ website and made a purchase through a competitor or in-store because they were overwhelmed by choice. It is clear that the multitude of choice is taking its toll on purchasing decisions, and in this digital market of ‘all you can choose’, businesses must recognise that simplicity is often the key to engaging customers.
While the digital world offers an explosive number of options, companies are losing the personal touch that customers value in face-to-face interactions. Accenture found that 65 per cent of consumers are more likely to buy from a retailer if they are recognised, remembered and receive relevant recommendations.
In order to achieve a truly personalised understanding of consumer expectations, companies need to move beyond knowing what customers purchase or consume, and begin to understand why they made those choices. Brands need to look at data centricity and technology as the new tools to develop a deeper, continued understanding of users and enable the delivery of custom made experiences. Through what Accenture refers to as ‘the customer genome’, companies can build a living profile of the customer’s unique preferences, passions, and needs, and lay the foundation for a future where personalisation platforms can create previously unimagined experiences. These customer profiles are cultivated through the collection of digital interactions such as mobile app usage, emails and social interactions that all help shed light on each customer’s unique preferences, motivations and interactions – what Accenture Interactive calls ‘interaction DNA’.
Much like a customers’ interactions reveal attributes about them as an individual, every product or service also has its own attributes, which make up the product’s DNA. It’s the advanced analysis of data from both interaction and product DNA that helps brands develop a living profile for every customer to drive a personalised service.
Netflix has championed this personalisation movement, transforming itself from a content distributor to a content creator. Its success can be attributed to its reliance on data and analytics to understand its customers’ motivations, and develop an acute understanding of preferences and habits. For example, it has implemented an ever-improving system of ‘micro-tagging’, which assigns highly specific labels to content. This data yields close to 80,000 different genres, as specific as ‘visually striking Latin American comedies’ to ‘scary cult movies from the 1980s’. Netflix estimates that close to 80 per cent of the content consumed on the streaming site derives from data-based recommendations, and that this use of hyper-personalisation saves the company over one billion dollars a year.
Although Netflix does not rely on the customer genome as described here, it’s a prime example of a company that is harnessing accessible data to listen intently to its customers and drive effective business decision-making.
Beyond simply tracking customers’ product purchases, hyper-personalisation allows for targeted content consumption and gives brands the opportunity to build stronger customer relationships. By asking how data can change the experience for each user, personalisation can ultimately move beyond engaging customers to producing new products and services, such as content on demand.
Inevitably, harnessing data to achieve this level of personalisation can raise questions around privacy, but Accenture Interactive believes the real issue is one of ownership and benefit. Research from Accenture shows 80 per cent of customers are comfortable with their data being collected.
In collecting customer information, Accenture advises brands uphold the following three guiding principles:
- Transparency: make customers aware that their data is being collected.
- Control: give the customer control over editing, deleting or sharing information on their terms.
- Service: ensure the data accrued is being used on behalf of the customer to enhance or improve his or her experience.
The old-school salesperson approach of simply pushing products on the customer has become redundant and ineffective. Companies must shift from a ‘what’ to a ‘why’ mindset, aiming to understand the motivations behind a customer’s choice, rather than the choice itself. Data and analytics are essential tools to drive the insights for a personalised experience, but brands need to remember not all data is equal.
Ultimately, understanding the customer on this personal level helps brands create experiences that anticipate and fulfil future needs uniquely to each individual and provides breakthrough and proprietary IP to help drive decision-making across the organisation.