Personalisation - it’s a matter of time, and of moments
We're moving from a service economy to one of personalised experiences. To succeed we'll need much more digital trust and to really understand the customer context: the moments that matter.
Over the next few posts I’ll be writing about personalisation. Why and how businesses do it, the need for vast amounts of personal data and the challenges it brings. Plus what this all means for our customer future.
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From services to experiences
Almost all businesses today would say that they would like to personalise their products or services in some way.
It’s seen as a way to make customers feel special, to meet a particular customer need, and usually to drive revenue and ‘brand engagement’ (whatever that means).
This post is about personalisation, but from the perspective of ‘mass customisation’. It’s one of the ideas that Joe Pine wrote about nearly 30 years ago.
First, a bit of background on the idea.
Joe describes how we’ve progressed through several clear economic phases:
The very earliest days of market trading were centred around the commodities we produced as an agrarian society - the output from farming land and animals. For example, we bought and sold coffee beans in sacks.
Soon people started to process these raw materials and package them up for a particular need . These raw materials had been ‘customised’ for a particular market. They became goods, and over time we stopped caring about who supplied the raw materials — we ‘commoditised’ them. We bought and sold pre-ground coffee in packets.
Later, many started to create services out of these goods now available - adding further value, and of course charging a higher price. And as before, customers soon cared less about who supplied the goods behind the service, and we commoditised the market further still. We bought and sold fresh coffee by the cup.
Joe’s main point is that this is a repeating trend:
We customise to create value, and in doing so we end up commoditising the inputs.
In his popular book, and later in this great 2004 TED talk, he asked the next logical question: so what comes after services? What happens when you customise a service?
His view is that you get an experience. A service that’s been tailored in some way.
Here’s the coffee analogy: today’s businesses that serve us coffee not only grind the beans and make the hot drinks, but they also stage experiences.
Organic coffee shops invite us to relax in big comfy arm chairs, read the papers, listen to jazz and enjoy the local artwork on the wall. Maybe even put on poetry readings.
It’s a specific customer journey. A specific environment. A specific take on how to create value, how to target a niche market, and importantly about finding new ways to sustain the profit margin.
And it makes perfect business sense: in the UK coffee beans cost less than a penny, the equivalent ground coffee costs maybe 25p, and a filter coffee costs £1 a cup. Yet a visit to Starbucks for a skinny-latte-extra-shot-no-foam-jazz-serenade costs nearer £3. And guess who’s making the good profit margins.
Living in the moment
What’s this got to do with personalisation?
You see, each time we move up the value chain - see the image above - we are customising something. We are refining it and offering it to a more targeted, and usually more valuable market.
It’s personalisation in practice.
So what happens when we customise an experience?
Well, it becomes personalised. Just for you.
Pine believes that a customised, personalised, experience is all about transformation. Helping you transform yourself, physically, intellectually or emotionally.
But having thought about it for a while I believe that it’s much more specific than that.
If you look at it, personalising, customising an experience means understanding when you have the experience. And where. And with whom you share it. And a whole range of other things that depend on your context.
I think of these as specific ‘moments’.
I believe that as we’re moving from the service economy and into today’s emerging ‘experience economy’, we’re starting to see the early signs of a new economy around personalised experiences.
At specific times of day, like when you get up.
At specific locations, like your place of work.
And specific social contexts, like going out for a family meal.
Just as companies differentiate themselves today by improving the customer service and the customer experience, I believe that soon they will look for ways to add new value by personalising customer moments.
When you walk into a store.
When you get engaged.
When the weather changes and you need to change your route to work.
When you’re moving house.
When you need to make an insurance claim.
More data please
Yet customisation just isn’t possible without gathering more and more data about your context.
It’s why Facebook has been so successful - by inferring vast amounts of information about who you are, who you know, what you are doing - and therefore what you might like to buy and do next.
It’s the closest thing that advertisers have had to a perfect picture of the customer.
Except it’s not.
It’s often miles away from reality. Yet the social networks get it right enough times to make it more valuable (or at least seem more valuable) that the other ways of reaching customers.
Our so-called personalised experiences are already here.
Just look at what most of the tried (and also failed) personalised digital assistants are doing - from Apple’s Siri and Amazon’s Alexa (both arguably seeing success at scale) to Microsoft’s Cortana and Google’s Assistant (not so much).
The intention of all these ‘helpful’ bots is to take data from your daily routines, your current location, your social and search activity, plus as many other digital breadcrumbs as possible and provide up-to-the minute recommendations and suggestions about what might matter to you — right now.
This kind of personalisation is widely different to engraving your name on a necklace, or having some birthday flowers waiting for you in your hotel room.
These personal assistants now need to know as much as possible about you, the customer, the consumer or the citizen. And that means accessing and using LOTS of personal data.
And that people, is the rub.
We’ll dig into that in more detail over the next few posts.
My moments need context
Can businesses really understand customer context properly? And will customers let companies gather so much data about their context that we reach recommendation perfection?
The answer is yes, possibly.
But only if customers are involved directly, and the solutions are built on a foundation of digital trust.
Where we have new tools to empower customers with their personal information. Where the individual can control what data is shared and with whom. And where customers can engage with businesses more authentically and efficiently.
For a much deeper dive on that, check out my Seven Deadly Sins of Customer Relationships.
Alain de Botton once said:
“…Most of what makes a book ‘good’ is that we are reading it at the right moment for us…”
It’s why moments matter, and why understanding customer context is fundamental to getting personalisation right (and why so many get it wrong).
Joe Pine’s idea of mass customisation and customising moments is an important one.
It’s something that we’ll see come to life more and more as we develop better tools for customers to express their context — the who, what, when and where - that matters to each individual differently.
Personalisation - it’s a matter of time.
And of moments.