The Drawbacks of Personalized Marketing


Personalization seems to be the future of marketing, but that doesn’t mean it will take the form we expect. According to a recent study, 72% of consumers will only engage with personalized marketing — but 86% are deeply concerned about their data privacy. The implication is clear: marketers must carefully manage data and personalization strategies, though sometimes the drawbacks aren’t worth the effort.

Experts warn that personalization shouldn’t become the end-all, be-all of mobile marketing. Some businesses unintentionally include banal messaging, thoughtless associations, and disturbing biases in algorithms. Here are a few dangers and drawbacks marketers can avoid while targeting the 80% of consumers who appreciate personalized experiences.

More from PostFunnel on personalization:
A Guide to Personalized Marketing In 2019
“Data science enables a personalized experience without being creepy”
How to Use Personality Science to Increase Retention on a Large Scale

Personalizing the wrong channels

Omnichannel marketing is this decade’s buzzword, but it’s not cheap. Personalization along every vector (or even just one) can get expensive. Organizations with smaller budgets might consider which services need personalizing, and where they’re better off with traditional, top-down marketing.

Conventional marketing wisdom isn’t known for its messaging subtlety, and it’s possible to overextend your reach. In most cases, a small personalized touch performs better than a swelling tide of personalization. For example, including unconfirmed details about a customer makes your company look amateurish, or worse — automated and impersonal. Consumers don’t particularly like the thought of a brand following them everywhere they go, either. Poorly implemented push notifications are a major offender — customers view them as 74% creepier than any other form of marketing, slightly ahead of direct phone calls.

Throwing money at the newest, shiniest, or most interesting technologies without considering the most common personalization use cases is a recipe for disaster. Careful advance planning is well warranted.

Putting personalization over consumer choice

The algorithms that drive personalization are just as fallible as their human creators and tend to amplify strategic errors. Poorly targeted product filtering can unintentionally distance customers from products they might have otherwise purchased. Restricting visible choices to a customer’s past cart total, for example, can limit impulse purchases of higher value items. When personalization overrides customer choice it can damage sales, so marketers should take care to fully understand how their personalization tools work.

Ultimately, marketers are well served to remember that their knowledge of customers is limited and fallible. It’s limited because even marketers with huge data sets can have trouble correlating exact data to a specific person. It’s fallible because there’s never a guarantee that the person making a purchase is who the data thinks they are — after all, customers can and do share Netflix profiles and loyalty programs.

Impersonal personalization

Personalization marketing is evolving rapidly. A decade ago, interest-based product filtering was a cutting-edge technique. Now, consumers receive recommendations of products similar to what they’re currently viewing, newsletters with products like ones they’ve purchased, and reminders about their abandoned shopping carts. These are no longer personalization techniques with added value — these are baseline tactics for organizations of all sizes.

But these methods can be a double-edged sword. Failed personalization and low customer trust cost businesses as much as $756 billion in 2016. Marketers should consider what’s being sold to whom before letting an algorithm take blanket control of campaigns. Watch out for retargeting advertisements. Could a personal item like deodorant potentially follow a consumer from website to website? What if engagement ring advertisements pop up on a shared device?

Most of all, customers resent having their time wasted. We’ve already mentioned the customer who missed an interesting product because the algorithm didn’t see a connection. On the other hand, there’s no point in constantly marketing goods or services that are only purchased periodically, such as major appliances or home renovations. Wasting a customer’s time with irrelevant ads will almost certainly harm a brand’s trust — which is difficult to get back.

Being personal without hazarding “the creep factor”

Finally, we arrive at the most notorious drawback of personalization: blatant overreach. Worst case scenario, someone will get a mailer announcing their teen daughter is pregnant. Or maybe it’ll be retargeting ads that make users feel like they’re being followed by an unfamiliar brand. Getting featured on “personalization marketing fails” lists or showing up on a blog post as a “marketing gone wrong” warning story won’t earn anyone high marks this year.

Personalized marketing should be personalized, but not personal. Marketers must get permission from users to use their data — it’s the safest way to ensure that even mistargeted ads are well-received. Consumer opt-in increases the likelihood by as much as 79% that marketing will be well-received, because the customer has already made a mental decision that they trust the marketing. When using a customer’s personal data, it’s almost always better to ask for permission than for forgiveness.

For the moment, we won’t get into the discussion of compliance with bodies like the EU’s General Data Protection Regulation (GDPR), which costs companies money and time. Governments are increasingly willing to step in and regulate marketers with legal oversight — so marketers need to get better at avoiding the drawbacks of personalization marketing before an annoyed public asks for change. The benefits, of course, far outweigh the risks, but marketers have lots of room for improvement. Only 22% of customers are very satisfied with their loyalty programs, and getting to know your customers by personalizing your marketing is the quickest way to increase that satisfaction.

Keep Your First-Time Customers Coming Back

The post The Drawbacks of Personalized Marketing appeared first on Post Funnel.


Online enterprenuer. Lean leadership consultant.

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.