Tuesday, June 20, 2017
Mass personalization is dead; welcome to the age of nano segmentation !
Attending this conference around analytics, marketing and understanding the customer behavior using segmentation as a discipline, almost all the speakers talked about targeting improvements as the segment sizes got smaller. Complexity of algorithms and the availability of hardware resources on the cloud as well as lower cost of acquisition has made it possible to churn data – a lot more data – than it was possible not too long ago. Marketing effectiveness is waking up and is moving away from the conventional world.
Companies that engage customers directly and those with high volumes of transactions have already begun to garner benefits from these technologies. Even others with a few degrees of separation between the brand and the consumer are exploring alternative strategies and business benefits. Almost every conference also has a mandatory presentation from a research house. The analyst on stage is expected to shower thought leadership on the audience; it is a rare occurrence when they actually make any practical sense.
One such session started with anecdotes of individual attention to the consumer in the pre-technology days and predicted the return of individualization in the near term. Given enough data points, oodles of hardware and highly optimized algorithms around machine superintelligence (the next level after deep learning according to the speaker), the engine will be able to segment the large volume of data into buckets of one, i.e. identify and predict behavior and thus target individuals and capture wallet share.
It has been an aspiration of software and solution builders to use technology to predict the future; we have all seen demand forecasts and revenue predictors with Sales & Operations Planning, most of which hovered in the 70 percent range with a swing of 10 percent on either side. Definitely better than the binary state of tossing a coin or 50 percent, these solutions removed error rates when 70 percent was off target to 70 being on target ! Predictive analytics has had better success than fortune tellers on accuracy levels.
Artificial intelligence at some levels is already influencing our behaviors with our every keystroke and click being recorded by some websites and mobile apps whose terms and conditions we hardly read and comprehend. Changing privacy policies and updates render our choices ineffective with every update leaving us exposed and vulnerable. Data privacy coupled with sieve like security allows the good, the bad and the ugly equal opportunity to use our digital footprint to coerce and nudge us to buy at one end and pay up on the other end.
Enterprises mired in Paleolithic technology, archaic mindsets and rusted skills are struggling to deploy and use such solutions effectively ethically, at times veering away from virtue. Consultants and technology providers are effectively creating Fear Uncertainty & Doubt with a promise to bring the Holy Grail to them. Despite their inability to deliver any credible design or strategy, many large consulting companies continue to rake in the moolah; CXOs and Promoters are shy of accepting they have been taken for a ride.
On the sides of the conference a conversation thread discussed the waste of precious resources and lost time with one of the premier consulting companies. The angst of the CMO was palpable, the drinks brought together a few other victims of the same company whose voluminous reports were gathering dust in their cupboards. Common sorrows bring feelings of brotherhood that only misery can keep together; they found light at the end of the tunnel with success that one of them had with a frugal startup solution.
Nano-segmented Earth’s billions, does provide individual as the atomic unit who can be observed and experimented upon to identify triggers that work. As the number of attributes rise, effectiveness improves, but we have known this for a long time and that contemporary solutions did not have the ability to provide the actionable insights in a timeframe that makes the action relevant. Lack of data integrity and clean data rendered analytics ineffective; algorithms did not know how to overcome these limitations.
The future of consumerism, customer behavior, segmentation, marketing, engagement, targeting, influencing, shadowing, nudging, bombarding, and swamping the hapless customer is closer than we think. Look around your behavior across life stages, daily innocuous decisions, and how they are being shaped by invisible forces. As an enterprise there are too many choices and options; the company with better quality data, compute and algorithms will be the winner albeit with a short window until competition catches up.
As an individual I am worried that have limited choices !