Competing on personalization is all about speed. If you cannot run hundreds of experiments with the push of a button, you are falling behind.
We’ve talked repeatedly about the need for agile processes and automated tools that enable companies to continuously ideate, test, capture feedback, hone their intelligence and strive for ever-increasing granularity and prediction accuracy over time.
But it is not just the organizational and technology enablers that make this happen. Agile is as much about mindset as it is about process and tools.
First 3 Steps to Make Personalization an Organization-Wide Goal
- Choose the right employee to lead the initiative.
- Task leaders to prioritize personalization initiatives across key areas.
- Create communal goals and align on objectives.
Challenge Your Teams to Learn 10 Times Faster
In most organizations today, the pace of learning and the sense of urgency about learning fast are simply inadequate. Get the doers in the room — for example, everyone involved in executing your last personalized marketing campaign. Mapping what it takes to run a personalization experiment is a powerful exercise that can help you find ways to exponentially increase the pace of learning.
- Sketch out the steps and handoffs. Delineate what’s involved in creating, launching, measuring and adjusting a personalized marketing campaign, a new personalized digital experience on the website or in the app or a new customer service process with personalization embedded.
- Talk through each step of the current process. Take stock of the manual processes you still rely on, which may involve many handoffs. Figure out how long your learning cycle is; for many organizations, it can be anywhere from eight to 16 weeks.
- Assemble a cross-functional team and challenge them to reduce the end-to-end cycle time. Review every step of the current process and ask: Can it be removed, automated or simplified? Look at every handoff point and discuss what it would take to eliminate it. Estimate the time saved from each of these changes. By cutting the cycle time down to three to five days, a company can run hundreds of tests in the same amount of time it takes the average organization to run a dozen.
The list that results from this interactive exercise will not only inform your personalization road map but can also show the art of the possible — and galvanize your execution teams to change.
Embed Personalization in Your Corporate Development Agenda
Dozens of major companies have explicitly made personalization a top strategic goal, including the likes of Kroger, Starbucks and Alibaba. Some companies are also making personalization a key impetus of their corporate development agenda. From its purchase of TurboTax (in 1993) to its acquisition of MailChimp, the marketing-automation and email platform (in 2021), Intuit’s corporate strategy has reflected the company’s pursuit of personalization as a means of growing with its customers, as well as helping them grow.
Indeed, over the past decade, there has been a growing wave of corporate development activity among leading companies in which personalization figured prominently in their strategy as an industry-shaping move.
One example is CVS’s acquisitions since 2018, which include Aetna, the health insurer; Signify Health, a home-health-care provider; and Oak Street Health, a primary care provider. Through these acquisitions, CVS has expanded the base of its customer relationships (especially in the Medicare space), learned more about those customers’ needs from the broader range of services it offers, and is setting the stage to manage more of those customers’ health needs.
Starbucks’s partnership with Alibaba in China to launch personalization and digital capabilities in its mobile app is yet another example of personalization’s growing importance in corporate development strategies.
Elevate Personalization as a Pillar of Your Corporate Strategy
First, take the steps we already described in previous chapters to ensure that personalization becomes an enterprise-wide initiative:
- Choose the right leader to own the end-to-end personalization agenda.
- Challenge leaders throughout the organization to devise ways to embed personalization initiatives as priorities across key functional areas, including operations, product areas and lines of business and customer service.
- Set shared goals and align on targets (and embed them across functions), including sales lift, customer lifetime value, overall customer satisfaction, the number of digital customer relationships and customer engagement, as well as specific KPIs that the relevant leaders can rally around.
Next, think beyond the present, and beyond your corporate boundaries. Consider the following:
- Is personalization high enough on your corporate strategic agenda?
- What if you took a different tack to fast-track your personalization program? You could try partnerships, mergers and acquisitions or ecosystem plays, such as data sharing and connected loyalty programs, where you build loyalty experiences that cut across companies (e.g., Delta and Starbucks’s connected loyalty program)?
- What game-changing moves are possible for your company — and the industry as a whole? How likely is it that any of these will become a reality in the next three to five years, and thus warrant scenario-planning within your current corporate strategy process?
- Finally, what are the implications for your primary and home markets? Your international and secondary markets? Given the technology and people costs, whatever you choose to build in your largest markets may be better accomplished through partnerships or vendor relationships in those markets.
Now that we have shared with you what “good” looks like in personalization and armed you with practical to-dos, we want to leave you with an impassioned plea as you begin to bring — or continue to bring — personalization to life in your company.
Take a day to immerse yourself in your own customers’ experience. What does your typical customer experience online, in your store/branch/office or when they call your call center? Could you make the experience more personalized in order to make it more convenient, faster, of better value or more helpful for customers?
In your quest for speed, do not settle for mediocrity or expedience. Given the complexity of personalization and the high stakes involved, rally the organization around a common goal with urgency. Create scale by growing the number of digital customer relationships and the volume of interactions with customers. Train your teams to seize the challenge to “learn ten times faster.” That is how personalization becomes a true source of competitive advantage.
Reprinted by permission of Harvard Business Review Press. Excerpted from Personalized: Customer Strategy in the Age of AI by Mark Abraham and David C. Edelman. Copyright 2024 The Boston Consulting Group. All rights reserved.
