What is the difference between Segmentation and Personalization?

What is the difference between segmentation and personalization? This is the question that came up during one of the webinar on personalization by Optimizely. This blog post is for those who have the same question.

Basic definition of Segmentation is  - division into separate parts or sections.  For the purpose of marketing, it is a processing of grouping customer and prospects into similar groups based on various criteria such as demographic, geo, behavioral and psychographics.  You can use one or more of such attributes to define your segment.  The purpose of segmentation is to understand about a group (segment), and develop marketing strategy to better target those segments. 

Personalization is providing marketing messages and/or experience that is tailored based on a customer’s needs or preferences.  Personalization can be very basic that can start from simply recognizing the person by name or it can be very complex that includes all sorts of data about a particular customer combined with device and contextual data (1st party data + 3rd party data). Personalization is the action that you take based on the learning you have about the person (a segment of 1 individual).

So segment is a way to understand your customer based while personalization is the action you can take based on that understanding.

Let’s look at very basic example to clarify these two terms:

You look at your site visitors and identify that there are two main behaviors of your visitors:

1.       Visitors who mainly click on sports related content, that’s where they spend most of their time

2.       People who mainly read finance related content, that’s where they spend most of their time.

Using this information, you have two segments – 1. Sports Visitors and 2. Finance Visitors 

This is called Segmentation

When someone who fall into “Sports” segment comes back to your site, you rearrange the content to highlight latest sports stories so that these visitors can easily discover the content they love.  On the other hand, a visitor who falls into “financial” segment will see finance stories highlighted.

This is called Personalization. 

Now this is not 1:1 personalization but it better than no personalization at all.

Hope this clarifies the difference between the two terms.  

Questions? Comments?

11 Tips for Improving Customer Experience and Driving Conversions

Struggling to drive conversions?  The issue might be with customer experience. After having worked with several brands, big and small, I can assure you that you don't have to make sweeping changes to drive better results. Many times even small changes and little bit process can lead to happy customers and big impacts. In this post I have complied 11 tips that you can use today. If you need help then don't hesitate to reach out to me.

1. Easy to fill forms – How many times have you come across a form field where you don’t remember what the field was about?  Many designers/developers use the default text in the form filed as the filed label. Once you tab into that field, the default text is gone and now you can’t figure out what that field was about.  That is a very bad design which will likely cause customer frustration and kill conversions.
2. No more unnecessary form field formatting and validations - Other than Captcha validation, you are likely using form field validations in your online form to make sure visitors/customers enter the correct data.  You might also use validation to ensure that the format of the data fields such as email, phone, etc. is correct. Many of these validations are absolutely required to ensure data quality. However, some validations put unnecessary burden on your customer/visitor leading them to abandon your forms/checkout process. A lot of data formatting can be done via client side JavaScript or backend processing without putting the customer through a lot of pain. So go through your own forms, see if all form validations are absolutely required. If not, then remove them, also remove any validation/formatting requirements that you can handle via code in the front end or backend. Check out my post on Form validation and conversions. 
3. No more convoluted captcha - Captcha are great to stop the spammers, bots and spiders from filling the forms, but some Captchas are so bad that they not only create a undesirable customer experience but also kill the conversions. Make sure you critically evaluate the captcha on your site and if it seems like something you yourself don’t want to encounter on another site then kill it. I wrote a blog post on Captcha, you can read it at  Is CAPTACH eating up your conversions 
4. Easy Promotional Code and Discount Code redemption - Promotional Codes also known as Promo Codes, Discount Codes, Coupon Codes, Offer codes etc, are supposed to drive sales, right? However, they can have a reverse action and can actually kill your conversions, if not properly used.  In my post “Promotional Codes: Conversion Killers?, I showed one such example where Promo codes can hinder conversions.  If you are going to announce a promotional code on your site, in a ad etc. and you know that the customer clicked on the link to arrive to your site then go ahead and automatically apply the relevant promo code don’t make a customer think and take extra steps.  Godaddy is a great example of a site the automatically apply any relevant promo codes.
5. Consistent experience across devices - Customers expect consistent experience across browsers and devices so don’t mess with their expectations.  Broken experience can lead to customer dissatisfaction and defection. I wrote about one such example in my post, 2 A/B Testing Lessons Learned from Amazon Video.  Read more: 2 A/B Testing Lessons Learned from Amazon Video 
6. Easy to find customer support number  - Yes, phone support is expensive but bad customer experience is even more expensive.  If you do your cost analysis, you might find that phone support is actually profitable. A phone call provide you an opportunity to hear your customer and convert a dissatisfied customer into a satisfied customers. Make it easy for customers to contact you rather than complain on social media.
7. Connected Channels, Customer Service, Support and Marketing - If I get a marketing material and I call the number listed on that then person picking up the phone on the other end should be able to answer question on that material. I have several experiences where customer support is not in sync with the marketing and customer has to waste his/her time. I talked about one such case of disconnected experience in my blog post titled, Are you Optimizing the Wrong Steps of the Conversion Process? 
8. Easy to Find subscription cancellation link - Have you ever tried to cancel a paid App subscription on iPhone?  It is pretty bad. I always forget where the link is and have to spend several minutes to look for it. Not a good experience.  It might work for iPhone and Apple but likely won’t work for you. If customer wants to cancel a subscription, then go ahead and make it easy for them to find the cancellation button/links. I am not saying you let them go easily, you should have top notch experience, service etc, to make it hard for them cancel but hiding an option to cancel is not the solution.  If they can’t find that cancellation link the they are going to leave you bad reviews about you in social media. Use data to figure out how valuable the customer is, understand why he/she is leaving and provide proper personalized offer/incentive for them to stay.
9. Easy to Unsubscribe from emails and other communications – Don’t end up in spam folders because your subscribers can’t find an unsubscribe link in your email. Spam complain will hurt more than the unsubscribes. If you do send relevant messages then unsubscribe should not be a big issue because people only unsubsribe from irrelevant stuff. Follow email best practices, send relevant messages and provide a link to unsubscribe.
10. Ongoing Testing - Customer preferences change, their behavior changes and you site has to change to. The best way to change your site is to keep evolving and always trying to find out what works best for your customers. This is where ongoing testing (A/B testing, MVT testing) helps. Before rolling out a feature, page layout etc., test it and see if your customers like it.  If not, then try something else. As Bryan Eisenberg says “Always Be Testing”. 
11. Personalized experience I started writing about personalization ever since I started this blog, back in 2006. I wrote extensively about privacy and how marketers should address it to engage in personalization. Consumers are now more at ease with online purchases, they have moved past initial privacy concerns of online tracking and now expect personalization.  Personalization is no longer optional. Many marketers don't realize that personalization does not have to be complex. You can start simple and build on it.  Reach out to me if you need help.

Thoughts? Questions? Comments? Need Help?  Contact me at batraonline at gmail or fill this form http://anilbatra.com/analytics/contact-me/

Email Personalization Not Working? Read This.

I am a big believer in targeting and personalization and have written extensively about it in this blog. However, targeting and personalization is not “set it and forget it” strategy. It needs to be continually tested to make sure that it is working and driving value. Sometimes you have to test and see if “no-personalization” will yield better results than personalization.

To make my point, let’s take an example:

I get a weekly promotional email from a prominent marketing company. They personalize the email subject line (good so far).
Here are few subject lines

• How [XYZ Company] Should Kickoff New Clients
•  Ensure that [XYZ Company] delivers great PPC campaign
• The rules of online branding that [XYZ Company] needs to know

Note: Instead of [XYZ Company] they use the name of the company I used to work with.

However there is an issue with the way they do personalization. Do you see the issue?

The issue is that they use the name of the company I USED TO WORK FOR. I left that company over a year ago and the subject line is so irrelevant to me that I don’t even open the emails. Though rest of the subject line may be relevant, adding personalization (company name) just makes me ignore that email.

This is a perfect example of why personalization fails.

This can be easily avoided by analyzing the data to figure out which subscribers are not responding to these personalized messages and test a different kind of personalization or completely drop the personalization.

Company names, titles, associations, job roles etc. change and your personalization needs to change when that happens. The key is to actively analyze the data and test.

Do you have any other examples of Failed Personalization? If yes, I would love to see those.

Also see: 7 Ways to Create Relevancy in Emails

Online Personalization: Issue Is With People Not Technology

Today I came across an article by Isaac Weisberg, titled Unintended Consequences of Targeting: Less Information, Less Serendipity – Part I. In this article Isaac argues that online personalization limits the exposure of information to the individuals. I agree that current personalization practices are very limited though it is more of an issue with the marketers engaged in personalization than with the technology. ( Note: Retargeting, Behavioral Targeting, on-site recommendations, customized emails etc. are all different forms of personalization). So it is not Personalization that limits the flow of information but it is the people engaged in Personalization.

The purpose of personalization is to provide information that is relevant to an individual and in order to do so you will eliminate a lot of information that the person is not likely to be interested in. However that does not mean that the person cannot be exposed to new information with the personalization.

The issue is that most of the marketers engaged in personalization (targeting) do not exploit the full potential of personalization and limit themselves to basic targeting. I highlighted one such issues in my post 5 Questions to ask before starting a Retargeting Campaign.

Personalization does not mean that you have to limit yourself to the same product or even the category. User’s behavior gives you a clue on what he/she likes. Use that to figure out complimentary items that you might be able to promote and even items that don’t make sense together but you have seen patterns from sales data that tell you that they might go together. E.g. particular pair of shoes is bought by lots of moms, so maybe kids’ shoes might make sense to promote to a user who has shown interest in those shoes. Isn’t that flow of information to the user?
I once worked with a client who used two mutually exclusive behaviors (people who read financial news and view international weather) to promote a totally unrelated product (high end international travel) with a great success.

So, yes exposing people to new information while doing personalization is quite possible as long as marketers doing the personalization are willing to use their creativity and move beyond their comfort zone.

Questions? Comments?

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