5 Products that Excel at Personalization
No one can argue against the benefits of product personalization. To name a few, it brings along deeper loyalty and longer engagement. Nevertheless, few products does personalization exceptionally well. But before I jump in, let’s look at an industry that does it particularly well.
Retail leading the pack
It’s nothing new. The retail world has taken advantage of personalization for a while — think charm bracelets, monogrammed purses, printed t-shirts. It has been recently taken to new heights as manufacturing technology improved and supply chains become more efficient. For example, you can put your name on your Adidas shoes. The customized shoes take more than 4 extra weeks to ship. However, the inherent human need to feel special offsets a normally important factor of short shipping time in eCommerce.
As another example, I recently shop at a boutique retail store where the sales agent reached out to me as soon as I had 1 item in my hand and started a fitting room for me while I continued to shop. When I was ready for the room, I found that they also put similar items that they thought I would like in the room as well. Although I know it is an up sell opportunity for them, I felt special and taken cared of in that moment. At that point, they have triggered a feeling which contributes to building trust and loyalty with me — an attribute that so many other companies covet.
But …
The extent of personalization at many companies today is sending emails beginning with your “personalized” name, which carries far less effect than a monogramed physical product.
Given the large amount of data companies have on consumers today, we almost expect them to give us the right information at the right time within the right context. For instance, when I make a credit card purchase for a plane ticket, the credit card company knows my intent to travel (sometimes transactions even include my destination in the description). At least at American Express, they give personalization a try by sending generic information close to my trip with suggested things to do. However, if they know I make lots of purchases at REI and other outdoors online shops as well as eat at hole in the wall restaurants, they have all the info they need to send me suggestions tailored towards adventure and authentic restaurants. Not only would that tailored information help me reduce my burden of research, I would have that credit card company in mind when making purchases as I do things that were suggested by them.
Nevertheless, I have not noticed many other companies outside of retail that have leveraged personalization to its full potential. Those that have done it well have reaped enormous benefits and gained a user base that is both engaged and loyal. Below are a few examples of such companies setting themselves apart by personalization.
Amazon
They were the pioneers of personalized product recommendations that is now commonly seen in eCommerce because others have built widgets mimicking them. Therefore, a personalization list isn’t complete if you leave out Amazon, so let’s kickoff this roundup with them.
If you have ever purchased anything on Amazon, you will notice sections on the screen with personalized recommendations of other relevant products based on other people that have also viewed/purchased the same product that you are looking at.
This is the most direct form of recommending you to take action based on others who have taken the same action.
Based on our rubric for well personalized product, Amazon does very well:
- Relevant information: Other products that you could be interested in.
- Timely within right context: You are about to make a purchasing decision or have just made your purchase and may have forgotten something.
Netflix
Personalization is Netflix’s bread and butter. Many people have attributed their video recommendation engine as one of the key components to their success.
Netflix’s personalized recommendations incentivize users to keep their monthly subscription because users can find more things to watch. On top of that, the video recommendations engine also has other business benefits. When mailing DVDs were still a large part of Netflix’s business, much of the demand would be for the new movies. However, when Netflix can personalize and recommend older movies that are less in demand at the current time, they can make sure users are making use of their full inventory. I am not sure how royalties work today, but I wouldn’t be surprised if the newer movies still cost more per stream than the older programs. Therefore, surfacing older videos would still directly benefit the bottomline profit of the company.
Having understood the importance of relevant video recommendations for Netflix, it makes sense why they invested heavily in personalization. Back in 2006, they held a competition with a prize of $1 million for anyone that could make their existing recommendation system 10% more accurate. Today, that recommendation engine excels at both the dimensions for great personalization:
- Relevant information: What videos you are likely to enjoy
- Timely within right context: Netflix is a very focused product that zooms in on meeting one need — watch videos. The moment a user opens up Netflix, their intent of selecting a video to watch is clear. By presenting the information of suggested videos, Netflix is merely assisting the user in performing his/her intent (as oppose to being a distraction).
With this engine, Netflix does a fabulous job excelling at helping users discover content they would enjoy based on their watch history. As a result, 42.5 billion hours of videos were watched on Netflix in 2015 and continue to grow.
Google Maps
Given all the data that Google has collected about you over the years, it would be a shame if they didn’t use it for your benefit. Nevertheless, how well they personalized has not been consistent over all of their products. Therefore, I would like to call out Google Maps in particular for doing a great job.
The feature that best fits the personalization rubric from Google is the “Explore” features in Google Maps. (This is a stripped version of Google Now that is only available on Android. Unfortunately, because I’m an iPhone user, I don’t have any hands on experience to speak to Google Now.)
- Relevant information: Things to do based on your preferences learned from interactions with all Google services.
- Timely within right context: The recommendation is tailored to time of day and location.
It could be improved by recommending things to do along a route. For example, if I am getting directions from San Francisco to Lake Tahoe, it would be great if it can recommend me places to eat along the way that is not McDonalds or coffee that is not Starbucks. Nevertheless, this explore feature is a good step in the right direction.
Honorable mention from Google’s product suite: search suggestion autocomplete. Based on where you are searching and your search history, it autofills with different content as you type.
Apple
So far, we’ve touch upon big software companies with tons of data to analyze and excelled at guessing your preferences. However, Apple has approached personalization in a different way — a highly manual configuration process where you tell them exactly what you want. Once you go through that sometimes painful process of setting it up for the first time, it pays off and goes to all your other Apple devices.
For instance, when the iPod first came out, the set up process was so painful that some people even paid others to import all their music to iTunes for them. Nevertheless, once that’s done, all the music seamlessly goes to your Macbook, iPod, iPhone, Apple TV, etc. Essentially, once you put in the effort to personalized it, it follows you around even as you upgrade your devices.
Tesla
All of the above personalization examples are from big companies. And there is a reason for that: they have the data. They had the time to build up an audience, analyze the data, and truly leverage it to understand what segment of people you are similar with in order to serve you that customized experience. Or they have an already established brand that will justify your upfront efforts.
But what if you are a smaller company or just starting out? Is data the barrier to keep you out of the personalization league? I would argue no. You need to be hyper focused on a target market and really understand your audience. When you have a homogenous user base with similar needs, you can focus your resources to personalize one segment at a time.
Tesla does this particularly well. Their target market is affluent, techie, early adopters who are enthusiastic about trying new technology. This gave them an immense focus on the needs of that segment to add features that makes the cars almost feel like it is made for them.
Even when there are flaws, Elon Musk responds appropriately to feedback and incorporates the solution in a timely manner. For instance, when a customer complained about the charging stations to be full of already charged cars, Tesla responded with an idle fee. It might not have been exactly 6 days to resolve the issue. However, the important take away is that they are responsive so that their audience understands that although the product isn’t perfect for their needs at this time, there will be progress since Tesla is looking out for their interest.
Conclusion
At the end of the day, users aren’t expecting their names to be written on every product. Instead, they are hoping the companies would truly understand their needs and serve up an experience to help them meet those needs with the least amount of effort as possible.
In today’s big data connected worlds, users almost expect companies to be collecting data from them to tailor their experiences and help them accomplish their goals. When personalization isn’t done well and segments aren’t broken down correctly, the recommendations can appear to be for that company’s profit instead of the user’s benefit. As a result, those recommendations will be ignored (or even worse, put a dent in the brand’s image that you are not looking out for them).
In order to survive and thrive, regardless of company size or stage, progress needs to be made towards meeting the user personalization expectations. A product that gives a sense of “right for me” is a product that wins.
Have I left anything out?
Let me know via a comment. I love to learn!
