Personalization is currently one of the hottest buzzwords in e-business. German e-business media produces lurid headlines such as "Without personalization no brand loyalty" or "Consumers expect personalization" - but is that really the case?
For as is often the case in practice, there are also voices to the contrary. One of them, which clearly questions the relevance of personalization, certainly is the PwC study "Future of CX". In the course of this survey, 15.000 users were asked which areas are important for their customer experience and for which of those they would even be willing to pay a little more. Here, however, personalization is only in the midfield, behind comfort and efficiency!
In the PwC survey, personalization was more in the midfield. Comfort and efficiency, on the other hand, were not taken into account by the interviewees.
In a YouGov study in Germany on the subject of personalization, 2055 users were also asked about their personalization preferences - the central results: 36% say they don't care about personalized content. 33% even say they don't like it when companies know their interests. Only 20% think it's good to present them with personalized offers and discounts based on their interests. So only 20% see this as an added value. However, the majority does not perceive any advantage.
Apart from user preferences, many companies find that implementing personalization is more difficult than expected. Often companies do not have raw data (e.g. if they use Google Analytics Basic) or the data is stored in different silos (CRM, PIM, ERP etc.). There is also a serious personalization dilemma. And here is what it's all about...
What is the dilemma of personalization?
The big dilemma of personalization is essentially the following problem: On one hand, every user wants to see the most relevant content quickly and immediately in an online shop, news portal or app. On the other hand, companies naturally also want to display the most relevant content in order to bind users to their website/app conversions (purchases, ad clicks, etc.).
However, most websites know only 20% of the users before the first click. This means that many users are not logged in, order as guest users or visit the website for the first time. As a stopgap solution, many companies simply show these unknown users a uniform mush of top sellers, novelties or favorites. But for many users this has no relevance at all, so they quickly leave the site again. The result: the bounce rate rises massively, which is a negative signal for search engines regarding website quality.
80% of your website visitors are unknown - 20% of the users with personalization more relevant content to present is not enough.
Personalization can usually only be used for 20% of the users. 80% of the users receive a website according to a “one size fits all” approach. Personalization alone is therefore quite inefficient compared to the great effort and hype surrounding the subject.
The database as a central challenge
Personal data serve as the basis for personalization. It requires an opt-in of the persons concerned (users, readers, customers, etc.). The conditions for this are strict and the fines for corresponding violations of the information duties are also high. In 2019, a record fine of 50 million euros was already imposed against Google. It is therefore more than advisable not to deliberately disregard data protection laws, as it was still quite common at the time of older privacy regulations.
Since the GDPR, many users have also become much more sensitive to the disclosure of their personal data. Moreover data protection is particularly important to Germans. In a study conducted by YouGov and the SINUS Institute in 2018, 93% of the 2048 respondents stated that the protection of personal data is particularly important to them. But: 56% doubt that their data is sufficiently protected. 55% even feel that they have no control over their data on the Internet. 64% even say that this topic cannot be given enough importance! No wonder that many people are reluctant to enter their data on websites or register.
Thus, the necessary opt-in becomes a higher hurdle for many companies. However, many users are not aware that their individual user experience can suffer as a result. But what can companies do against this dynamic?
Relevant content through situational data
The dilemma of personalization can be solved by the clever use of anonymous situational data. Because these are data points, every user leaves behind when visiting a website. Specifically, these are data points such as the device used (smartphone, iPad, PC etc.), date, weekday or IP. From this the region, i.e. the approximate location, can be derived anonymously.
On the basis of this situational data, content can be displayed which, according to the historical data, has already led to conversions or high interaction among users in a similar situation. This method is called situationalization.
Situationalization efficiently resolves the dilemma of personalization. This is because situational data does not require an opt-in and is sent with every access by every user. They also do not allow any conclusions to be drawn as to the identity of the visitor. Who exactly someone is, is completely irrelevant for a successful situationalization of the contents. This innovative method is fully GDPR compliant and allows you to optimize your digital channels for 100% of your visitors.
