What's Old Is New - Personalization Is Back

by FICO

(Posted by guest blogger, James Taylor)

One of the most common reasons for discussing enterprise decision management, and one of the most common ways in which people want to make their systems smarter, is in personalizing them. Making a system respond in a reasonable yet personal way to a consumer or other customer is widely, and correctly, seen as a way to bring better service to bear in a scalable way. When I saw this post on Personalization…New buzzwords, same business value I was reminded of this fact. The post started by reiterating that personalization has come up before and had its moments of popularity. It also pointed out some synonyms that have become popular like "behavioral targeting, precision marketing, and micro segmentation". So what is it that has made personalization come around again and why might this time be the charm?

The post identifies a number of reasons. Firstly there are now "practical ways to implement and manage dynamic sites that 'personalize' the experience, segment their sites and improve the quality of their recommendations". This comes in two areas. The sites themselves are more dynamic and more likely to be built dynamically from content stored in a content management systems. It is much easier to inject personalization into the decision as to what content to retrieve and display if the content is being assembled dynamically than if the page is fundamentally a static one. The technology for making the personalization work has also improved. Business rules management systems are more scalable and easier to integrate, SOA means that many more technologies can be easily made to "play nice" and the sophistication of analytic models has improved so that the actual analysis of data results in better rules and predictions as to what a customer or prospect might want.

It is also true, as the post notes, that "business tools that give marketing managers and merchandisers the ability to easily define online segments, tag content (products, reviews, articles, etc.) and create rules to fully-automate real-time intelligent targeting". This ability to bring business users more fully into the picture by giving them viable control over the rules being used by the personalization is key. While there are some difficulties to be overcome, the ability of the business to be and feel in control really matters. Marketers don't like to give up control to a black-box, so giving them control helps with adoption and, while analytics are very powerful, many personalization decisions remain judgmental until data can be collected making it important to engage the experts.

Like the post I think that there is a also a general trend to people liking personalization more. They are more comfortable with personalized offers and responses. In part this is thanks to marketers asking them questions - what are their preferences, what are they interested in and so on - and in part it is simply a comfort level arising from growing use of self-service and web-based systems. Balancing offers with questions to elicit more information is what is known as "Best Next Action" where a decision as to the right action for this customer is taken and then the resulting question or offer or action is delivered through the customers choice of channel. Personalization in this context feels more likely to deliver value and so is more tolerated by the customer.

In the end personalization must deliver value not simply more junk mail. As companies figure out how to do this, customers are responding. Adopting enterprise decision management to automate and improve your customer treatment decisions by, among other things, personalizing them is the most effective way to do this. Not only does it separate decision making from the channel, ensuring cross-channel consistency, it also mixes analytic insight with business control for maximum results. Add in adaptive control to constantly challenge your approach and try new ways to personalize and you should be set. For more on this check out these other posts I have written on the topic: