CONTEXT: Personalization
in practice

Why it works, what it can do, and current limitations to how it's applied

Why personalization
is the way to go

Research from McKinsey & Company
has shown that personalization...

Reduces acquisition costs up to

50%

Lifts revenues by

5-15%

Increases the efficiency of marketing spend by

10-30%

The power of personalized

The power of personalization is linked to a variety of psychological benefits we experience when something is tailored to us as individuals - whether we're conscious of the personalization at play or not

According to a study from the University of Texas, we can attribute our preference for personalized experiences to two key factors:

1. Desire for control

Even though a personalized experience doesn't necessarily involve the recipient making any actual choices, receiving content overtly tailored to you and your interests gives your brain the impression that it's more in control. People feel much more positive towards you when they feel like they're in control of the situation.

2. Information overload

With personalization, you aren't forced to sort through and consume lots of resources to find what you're interested in. You're given exactly the information you were looking for. This helps reduce your perception of information overload and brings across a more positive experience.

The brain's response to personalization

What's in a name?

One of the types of personalization we now largely take for granted is including a person's first name in automated emails and the likes. This might not seem like much, but don't underestimate the power of calling someone by their name.

A study published in the peer-reviewed journal Brain Research found that the brain lights up in certain areas when it hears its own name, particularly in the middle frontal cortex, associated with social behavior. The areas responsible for long-term, visual, and auditory processing are also affected, all from hearing one little word.

56%

of people would rather buy from someone who recognizes their name¹

1 Source

Undetected personalization

Some of the most effective personalization is the kind the prospect doesn't even notice. Research has found that people prefer personalization even when they're unaware of it. This is all thanks to the brain's reticular activating system (RAS).

The RAS acts as a kind of gatekeeper, filtering out irrelevant information and allowing the information you need to pass through. If your content is full of information the reader doesn't need or want to know, the RAS has to work overtime, creating cognitive overload. A well-tailored customized content experience will pass right on through the RAS and make the biggest impact.

Most commonly, the RAS is associated with the concept of selective attention, which means that we naturally orient to information or ideas that we are invested in

Dr. Rachna Jain

So why isn't everything personalized?

Despite the available evidence that personalization can drive superior results, many industries have struggled with the technology, and in 2019 personalization hubs landed in Gartner's "trough of disillusionment".

Why?

Limited application

The most personalization we tend to see from marketers is limited to automated emails with first names, company names, birthday discounts, and the likes, which can only take us so far. Elsewhere, lack of easy-to-use automation makes the creation of personalized content, especially long-form collateral like brochures, event follow-ups and sales proposals, a manual and time-consuming endeavor, with quality control proving particularly challenging.

Creepy application

Personalization must benefit the reader in some way to be worthwhile. Otherwise, you're more likely to get their back up. Brands have misstepped on this front time and time again, and continue to do so. Personalizing a sales proposal to address the customer, their pain points and most relevant products makes sense. Creating digital ads that use a person's or company's name and follows them around the web feels creepy, and is of no benefit to them.

Lack of meaningful results

Limitations in how longer-form content is generally being tracked and analyzed means teams are in the dark when it comes to how individual recipients are engaging with what they're being sent. This makes the expense of content personalization engines, the change to ays of working it calls for, and related content creation efforts difficult to justify.