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October 21, 2024Today’s interview is with Boston Consulting Group Senior Partner Mark F. Abraham and Harvard Business School Senior Lecturer David C. Edelman. They join me today to talk about their new book: PERSONALIZED: Customer Strategy in the Age of AI, defining personalization, the equation P=n×v2, the five promises of personalization, the technology that brands need to embrace to deliver true personalization, the role of AI in all of this, the customer service C-suite loop and some examples of brands who are personalization leaders.
This interview follows on from my recent interview – There are major tectonic shifts taking place in the outsourcing space right now – Interview with Craig Crisler of SupportNinja – and is number 519 in the series of interviews with authors and business leaders who are doing great things, providing valuable insights, helping businesses innovate and delivering great service and experience to both their customers and their employees.
Here are the highlights of my chat with Mark and David:
- There’s been too much discussion about AI driving efficiency. And we need to flip the conversation to how we use AI to drive growth.
- The book is a playbook for how to really improve your personalization journey.
- There is no widely accepted definition of personalization.
- For too many, it’s just an advanced tactic to sell more stuff.
- Reference to how David used SundaySky when he was CMO at Aetna.
- People don’t understand their health insurance.
- We found a supplier called Sunday Sky who could do personalized videos and we offered people when they became new members, a personalized video to explain their health insurance and what they had bought for their family.
- It was a home run.
- It cut calls to the call center by over 20%. Satisfaction went up.
- It was using data to actually help people and that drove a virtuous cycle because then as they do more business with you, you get more data. And you can use that to drive even better value delivery.
- Most companies are on this journey, or they are personalizing some parts of their experience.
- However, when we scored brands, the highest scores were 80 to 85 out of 100. But, the average score was 49. So, most brands have a lot of work to do.
- The equation P=n×v2, aims to capture the essence of the book in a simple way. What it suggests is that companies should now be competing on the scale of their digital customer relationships and insights they have about us. So, a brand’s level of personalization is about the number of digital customer relationships (n) they have combined with the speed with which they’re able to act on them. However, the ‘v’ has an exponential impact on this. Hence, ‘v’ squared.
- For example, one of the major banks in the U.S. had lots of personalization initiatives going on. They had set up several hundred triggered campaigns that were running to catch signals from clients and act on them. But when it came to launching an actual personalized campaign, it was a 16 -week process. We mapped it, and there were 15 teams involved. There were 18 handoffs, there were 40 people touching it, and they had no V.
- The speed was missing, even if they had all this data, they had invested massively in the signals, and they had millions of digital customer relationships. It just took too long to take that data and put it into effect.
- The other aspect of speed is your ability to test and learn. Because often in personalization, you don’t know what’s going to work.
- The more you can test and learn, the more data you can get back that can help you refine the granularity by which you can do personalization.
- To paraphrase Peter Senge – we have to create a learning organization because that’s our competitive advantage.
- It’s not just about the data and analytics, it’s about building our capability to be able to act on all of those sort of things.
- The five promises of personalization are implicitly what a brand is offering to a customer when they’re starting to embark on a personalization journey and when they’re sharing information back and forth.
- The five promises are:
- Empower me: Help the customer get something done that they could not do before easily.
- Know me: Help the customer believe that they will get value in return when they share their data with you and grant you permission to use it for their benefit. As each customer realizes the value of this data exchange and engages more, your insights about them grow significantly.
- Reach Me is the promise that personalization will be relevant and timely. It starts with having the customer’s permission to contact them in relevant channels. It relies on having the always-on intelligence to identify the right experience to deliver and the right moment and channel to deliver it in.
- Show Me is about how a customer experiences the various forms of content that bring a company’s personalization promises to life, whether that is informational emails, images and videos on a website or app, text messages, exchanges with call center reps, store associates, or chatbots.
- Delight Me is the promise that makes personalization feel magical. It is fueled by agile ways of working, organizational structures and processes, and technology, which together constantly improve personalized experiences with each customer interaction.
- When it comes to technology, start with the use cases that you’re really focusing on to empower the customer and build incrementally the data flows to enable that in a focused way where you’re getting the payback to then sell from the journey.
- Have a target state architecture in mind, remembering that your architecture needs to cover all five.
- Sometimes point solutions are great shortcuts to deliver a better customer experience in a specific use case or channel. But, sometimes, they can result in trapped data.
- Companies are now competing on personalization, not economies of scale and manufacturing. It’s economies of scale in these digital customer experiences and how quickly they can translate them into better experiences, where competitive advantage lies.
- Every role in the C -Suite is critical to making this happen all the way to the CEO, and they need to set the agenda on the bold ambition for this.
- Mark’s best advice: Just get going.
- David’s best advice: Think about what frustrates your customers and what you can do to break the compromises that they’re facing.
- Mark’s Punk XL brand: sweetgreen
- David’s Punk XL brand: Red Bull
About Mark and David
Mark F. Abraham is a Senior Partner at BCG and the founder of the firm’s Personalization business, which he has built into a global team of more than 1,000 agile marketers, data scientists, engineers, and martech experts. Mark’s teams have accelerated the personalization efforts of over 100 iconic brands (e.g., Starbucks, Home Depot, and Google) and built some of BCG’s largest ventures and AI platforms, including Fabriq for personalization. Mark now leads BCG’s North American Marketing, Sales & Pricing practice.
Check out Mark and David’s new book: PERSONALIZED: Customer Strategy in the Age of AI, and connect with Mark on LinkedIn here.
David C. Edelman has a history of personalization work spanning three decades. Today, he is a Senior Lecturer at Harvard Business School, an executive advisor and board member to brands and technology providers, and an advisor to BCG. Forbes has repeatedly named him one of the Top 20 Most Influential Voices in Marketing, and Ad Age has named him a Top 20 Chief Marketing and Technology Officer. Together with Mark, David wrote the 2022 Harvard Business Review article (Customer Experience in the Age of AI) that inspired this book.
Connect with David on LinkedIn here.
Credit: Photo by Pasi Virtakari on Unsplash