Bad Personalization Is Worse Than No Personalization


Month after month, my electric bill scolds me. ďYou used 80% more electricity than your average neighbor,Ē it tells me one day, and ďYou used 100% more,Ē on another. Itís pointed, and itís personal. I get the message: Iím wasteful, Iím bad.

Personalization, highly individual messaging, is hot stuff in marketing now. Marketers use personalization to make their messages relevant to the customer. When you add a product to an online shopping cart, and you get instant offers for related products, thatís personalization. Emails or texts alerting you about discounts for products youíve viewed in the past are another form of personalization. Done right, personalization can boost conversion rates and customer satisfaction.

Good personalization motivates you to visit often, linger longer, and buy some extras. Maybe youíve bought one of the items that Amazon recommended just for you, or ordered from a great new restaurant that you discovered in a GrubHub email that highlighted restaurants in your own neighborhood. If so, then youíve experienced good personalization in action.

Personalization isnít always on the mark. One online retailer offered me a size 0 dress today, while another hit me with ads for weight-loss products. For a while, I was bombarded by ads for a cougar dating site. None of these merchants got any money from me. Maybe their tactics work often enough to be profitable, maybe not.

As JC Grubbs, president of digital development and design firm DevMynd Software puts it, ďPoorly executed personalization is vastly worse than letting users choose their own content.Ē Heís so right. Bad personalization is the reason that I have come to hate my electric bill.

The electric company thinks it knows me, and it thinks it knows my neighbors, but all it knows is the number of kilowatt hours we use each month. It doesnít know that many of the apartments near mine are used as vacation homes and arenít occupied most of the time. It doesnít know how many people live in each household, who works at home, or who has kids. It happens that my household is a little bigger than the US average, and our energy consumption is a little lower than average, so those notes on the electric bill donít do much except to annoy me. Thatís bad personalization.

To do personalization well, you need to test your ideas and learn what works, and what doesnít. You can use conventional techniques such as A/B testing to compare personalized offers to controls. Start small and choose low-risk projects at first. (JC Grubbs suggests testing personalization with a group of past customers who havenít been active for a while, so youíll have little to lose if your test flops, and a lot to gain if you succeed.) Once youíve had some small successes, gradually work up to a larger scale, explore customer segments, and experiment with a variety of messages.

No personalization scheme succeeds 100% of the time. Personalized offers donít always work as well as ordinary offers. Yet those who use personalization well are rewarded with increased revenue and happy, loyal customers. So, donít just personalize! Test personalized offers and measure the response, so youíll know what works.

Have you tested personalization in your workplace? Please share your experience.

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Re: Use what you know/CONTEXT IS EVERYTHING
  • 2/6/2015 1:18:45 PM
NO RATINGS

James,


I noticed that a recent bill no longer includes this type of personalization. Maybe they gave up.


Meta

Re: Use what you know/CONTEXT IS EVERYTHING
  • 2/6/2015 9:31:29 AM
NO RATINGS

@Meta. Given all these comments (even off the A2 site), it's obvious that the utilities' "you and your neighbors' usage" apps are simply broken.

This not only is a black eye for the utilities themselves, a strike on their brand, but is bringing confusion to well-intentioned energy conservation efforts. (I don't think this is the first time that they would have heard that the apps don't work).

So, a test of how well the utilities and their IT teams have adapted to the new ways of building applications and responding to changes in the market will be reflected in how long it takes them to roll out replacement apps tht actually provide customers with the data that they need.

Six months? Two years? Five years?

What's your confidence level on this one?

Re: Use what you know/CONTEXT IS EVERYTHING
  • 2/5/2015 6:16:57 PM
NO RATINGS

Seth,

 

What great analogy! It reminds me of the man I knew in college who always called me Nancy. Nice man, really, and my name is not easy for most people to pronounce or remember, but Nancy? How did he get that?

I agree that leaving the message generic is often better.

This topic really hit a hot button with some people. I mentioned this article to a colleague last week, and someone in a neighboring office overheard us, popped up from his desk and began to rant about how much these messages were upsetting his wife, who is very conscientious about conservation. I asked a few questions about his energy use and bill, and found his family's electricity consumption is quite modest, especially considering the size of family and type of home he has. These messages seem to be way off base.

Meta

Re: Use what you know/CONTEXT IS EVERYTHING
  • 1/22/2015 9:41:54 PM
NO RATINGS

It's kind of like seeing someone you've met before and calling them by the wrong name.  It just doesn't feel good for either party.  Maybe personalization should also come with a confidence level.  If it is below a certain confidence level, it should keep the messages generic. 

Re: Use what you know/CONTEXT IS EVERYTHING
  • 1/21/2015 1:29:56 PM
NO RATINGS

Meta, I did not see this as shaming since your work load and lifestyle needs may be above your average neighbor. If you often work from home but your neighbors consume fuel and energy at their remote work sites, then you may be using the same amount or even less. If your energy usage translates into a higher revenue flow and 'internal rate of return' than your neighbors, then that is a good thing. In short, the extent that we know you from your social media presence, you are always working, reading, writing books, etc. Hence since your energy usage creates personal wealth, supports the economy and makes us smarter, then I consider that energy well spent.

Re: More bad personalization
  • 1/20/2015 6:37:53 PM
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I also get month to month comparisons here in Florida, which are just slightly interesting. Unless I make notes through the month that I've used more heating this month than usual because it's been colder than usual, it's not all that helpful though to make any changes to save electric use. I would think their data could easily calculate and compare the useage tagged to weather so suggest perhaps I change my thermostat settings or to notify me that I'm using a typical amount because of the weather change. That would be useful.

More bad personalization
  • 1/20/2015 2:31:28 PM
NO RATINGS

Utilities want to use all the data they collect through smart meters.

My utility doesn't compare me with my neighbors, but I do get an email every week that compares my usage from one week to the next -

This week you used 29 kWh more than last week. or

This week you used 19 kWh less than last week.

It comes with a day-by-day chart so I can see a certain Tuesday was a peak. Let's see, that would be December 23rd. Interesting, but I can't think of anything useful to do with this info. It's basically noise.

various comments
  • 1/20/2015 1:27:16 PM
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To make a fair comparison, they should probably also add together both electric & gas consumption for the month, eh?

A more in-depth analysis with very targeted information would probably be more useful. For example, if the utility company can give customers insight something like ... "your small single-wide trailer is costing 3x as much to heat as a house 4x its size - this is because the trailer has very little insulation and baseboard electric heat."

And do utility companies want their customers to use less, or more? I guess that depends on whether they have excess capacity, or are right on the verge of needing to add-on an additional power plant, etc.

 

Re: They didn't think this through
  • 1/20/2015 9:43:57 AM
NO RATINGS

@Terry. I'm not going to defend the utility. However, as I think this discussion though, I think what they are guilty of isn't just shaming customers. The bigger sin is something that many, many organization do. They didn't help their application continue to grow. The basic idea of allowing customers to compare their energy usage with their neighbors wasn't bad. In fact, for a utility there was a bit of innovation, finally. However, as Meta describes, they didn't bring that application to maturity. The next logical step beyond comparing usage by street address would have been to allow customers to compare by house type, frequency of occupancy, family size, presence of home office, etc. 

That's where the value would come in. If you could compare your usage with even 10 similar homes and scenarios, and your usage was significantly higher, it would raise a red flag, and you would know to check whether your fridge is running too often, if you are losing heat through bad windows, and so on.

Instead, what the utilities (across the country as I understand it) did was to roll out a basic application and then move on to other business. I think all of us have worked in environments where that happens. A new app comes out with the new car smell to it and, after some training and a quick tweak or two, we realize that it's still only a 75% solution, and even that number is slipping because the business has changed in the months since the project started. Adapt the app for those changes? Dev says, "Maybe next year".

Agile development may not be as wonderful as its fans say but the core concept of apps growing with the times has merit. This utility app apparently hasn't done that.

Re: They didn't think this through
  • 1/19/2015 12:26:41 PM
NO RATINGS

Right on at least two counts, SaneIT... they are giving the impression they don't want Meta's business, and you're also correct that we don't really have a choice with monopoly utilities. But I think they are also going a step further with an implicit message of "You're not using our services right." Get with the program, Meta! ;->

Near as I can tell, this attempt at personaliizaton has done little more than alienate a customer (and got my blood pressure to spike!). Poorly thought through, poorly executed.

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