The Power of Personalization in the Age of AI | Mark Abraham | TED
Summary
TLDRThe speaker highlights the frustrations of impersonal customer experiences, from healthcare to online shopping, and stresses the importance of true personalization. By using insights gathered from past interactions, companies can improve customer satisfaction, trust, and growth. The speaker introduces the 'Personalization Index,' a tool that measures how well brands tailor experiences to individual needs. Successful companies, like Netflix and Fidelity, excel by offering relevant, personalized interactions. The message emphasizes that less is more in personalization, calling for brands to reduce spam and focus on building genuine, data-driven relationships with customers.
Takeaways
- 🌞 Personalized customer experiences are essential but often lacking in industries like healthcare, where repetitive and impersonal interactions occur.
- 🐕 Many brands fail to adapt based on customer preferences, leading to irrelevant ads and poor customer experiences.
- 📉 Companies that embrace true personalization grow 10% faster and build stronger customer satisfaction.
- 📊 Personalization is distinct from customization; it's about improving experiences based on previous interactions, not just altering products.
- 🏆 Companies like Netflix and Starbucks lead in personalization, offering tailored content and suggestions based on user data.
- 🔢 The speaker and team created a Personalization Index to measure how well brands tailor their experiences, scoring companies from 0 to 100.
- 🎯 Fidelity stands out by using a 'less is more' approach, sending fewer but more relevant communications based on individual customer goals.
- 💼 Only 10% of companies excel at personalization, leaving the majority relying on mass communication and spammy marketing tactics.
- 🔄 Personalization builds trust and improves data collection, as customers are more willing to share data with brands that deliver relevant experiences.
- 🚫 The future of marketing may become even more saturated with irrelevant content, unless businesses shift to more thoughtful, personalized approaches.
Q & A
What is the main issue the speaker experienced at the urgent care center?
-The speaker was frustrated by the lack of personalized service at the urgent care center, having to fill out forms again despite being a regular visitor. This impersonal experience made the situation worse, especially after a dog attack.
What examples of poor personalization does the speaker give?
-The speaker mentions a friend who continued receiving emails for dog treats after his dog passed away and receiving ads for senior citizen discounts after buying a cane for his uncle, despite not being that old.
What is the difference between customization and personalization, according to the speaker?
-Customization involves tailoring products, like selecting a custom fabric for a sofa, while personalization focuses on tailoring experiences by using previous interactions to improve future ones.
What is the personalization index, and why is it important?
-The personalization index is a score from 0 to 100 that measures how well a company personalizes its interactions with customers. It's important because it provides a way to evaluate and improve personalized experiences.
Which companies score high on the personalization index, and why?
-Companies like Netflix and Starbucks score high because they personalize content and offers based on user preferences and interactions. Netflix suggests movies based on past viewing habits, and Starbucks offers personalized drink recommendations.
What industries tend to score low on personalization, according to the speaker?
-Industries like financial services, insurance, B2B distribution, and healthcare, including the speaker’s local urgent care, tend to score low on personalization.
How does personalization impact business growth?
-Personalization leaders grow 10 points faster than others and achieve higher customer satisfaction. They are expected to capture a $2 trillion incremental growth opportunity over the next five years.
What is the key principle of true personalization, as discovered by the speaker's research?
-The key principle is that 'less is more.' Companies should send fewer, more relevant messages and offers, respecting customer preferences and building trust.
How does Fidelity implement the 'less is more' personalization strategy?
-Fidelity personalizes its outreach by focusing on customers’ investment goals through surveys and one-on-one meetings, and adjusts future interactions based on changes in the customer’s life. They also avoid irrelevant communications, such as suppressing emails about new products that don’t match the customer’s needs.
What broader societal issue does the speaker connect to the lack of personalization in businesses?
-The speaker suggests that people's growing anger and frustration in society may stem from feeling unheard and treated impersonally, especially by large businesses and institutions.
Outlines
🐕 A Dog Attack and a Frustrating Urgent Care Experience
The speaker recounts an unfortunate event where they were attacked by a dog that wasn’t up-to-date on rabies shots. Injured, they visited urgent care, expecting quick admission since they had visited before. Instead, they were forced to fill out forms again, despite a sprained wrist, and endured a long wait. This frustration parallels impersonal customer service experiences many people face, and it’s an example of how businesses can fall short in delivering personalized care.
💻 The Annoyances of Impersonalized Marketing
The speaker highlights examples of impersonal marketing, such as receiving dog-related emails after the death of a pet or irrelevant ads for hearing aids. They express frustration with repetitive, unwanted advertisements, like being pushed to buy another dishwasher after receiving a damaged one. These experiences demonstrate how businesses fail to offer true personalization, which leads to customer dissatisfaction.
📈 The Power of True Personalization
The speaker leads a team focused on building true personalization in customer experiences, which goes beyond customization of products. True personalization improves interactions by learning from past experiences to enhance future ones, making them faster, cheaper, or more convenient. They created the Personalization Index, a score from 0 to 100, to measure companies’ performance in delivering personalized experiences. Their research reveals that top performers like Netflix and Starbucks excel at this, while industries like healthcare and financial services struggle.
💸 The Trillion-Dollar Potential of Personalization
The speaker shares findings that leaders in personalization see growth rates 10 percentage points higher than their competitors. They predict a $2 trillion increase in incremental growth for these companies over the next five years. Personalization can improve customer satisfaction and build competitive advantages. One surprising takeaway from their research is that successful personalization often involves fewer interactions—less spam and irrelevant messaging, which leads to stronger trust between the customer and the brand.
🏦 Fidelity’s ‘Less is More’ Approach to Personalization
Fidelity is presented as an example of a company that uses a ‘less is more’ approach. They personalize customer experiences by thoroughly getting to know their clients’ investment goals, using tailored surveys, and reducing irrelevant outreach. Fidelity adjusts communications based on individual needs, such as suppressing promotions for unrelated products when a customer has other priorities. This approach increases customer engagement and trust while still boosting transactions.
📧 The Dangers of a Content Explosion
The speaker warns of an impending ‘content explosion,’ where companies will produce massive amounts of content, thanks to generative AI, at much lower costs. They argue that focusing on personalized, relevant content is key to preventing a flood of impersonal messages. Otherwise, companies risk overwhelming consumers with spam, further reducing engagement. The speaker advocates for building trust through personalization to gain customers’ willingness to share data.
🔔 The Call for Consumer Voices to Be Heard
The speaker encourages consumers to demand better experiences from brands. With so much impersonal content flooding inboxes and feeds, it's time to send feedback through surveys or simply end relationships with companies that don’t respect customers' attention and data. By doing so, companies will be forced to pay attention to consumers’ needs, ultimately improving the quality of interactions.
🤝 Bringing Personalization Back Into Our Lives
The speaker reflects on the sense of anger and dissatisfaction in society today, partly due to feeling unheard in an impersonal world dominated by large corporations. They suggest that, historically, communities were more personalized, with local businesses knowing their customers well. The speaker calls for businesses and consumers to work together to bring back personalization in today’s interactions, making people feel valued and understood once again.
Mindmap
Keywords
💡True Personalization
💡Customization
💡Personalization Index
💡Less is More
💡Customer Experience
💡Data
💡Spam
💡Trust
💡Competitive Advantage
💡Artificial Intelligence (AI)
Highlights
The speaker experienced a frustrating situation at an urgent care facility where they had to fill out repetitive forms despite being a regular patient.
The speaker's wrist was sprained after being attacked by a dog that wasn't up to date on its rabies shots.
Brands often fail to provide personalized experiences, like sending irrelevant ads or recommendations based on outdated data.
The speaker highlights their friend, who continues to receive recommendations for dog treats, despite their dog passing away six months ago.
A personal experience involved purchasing a dishwasher that arrived after nine months and was damaged, yet the company continued to send emails about buying another dishwasher.
True personalization is about improving customer experiences by learning from each interaction, not just customizing products but tailoring experiences.
The speaker developed a Personalization Index, a score from 0 to 100, to measure how well companies personalize customer experiences.
Companies at the top of the Personalization Index include well-known brands like Netflix and Starbucks, which are recognized for their tailored customer interactions.
A mental health app called 'Sind' uses personalization to match users with therapists based on 12 different brain functions, providing a more customized mental health experience.
Fidelity, a financial services company, excels at personalization by learning about customers' investment goals from their first interaction and continuing to adapt based on future engagements.
Fidelity's approach includes a 'Gratitude' question to better understand a customer's personal values, helping them tailor investment strategies accordingly.
Fidelity reduces unnecessary communications by focusing on personalized, triggered content rather than bulk emails, which has led to increased customer engagement and transaction rates.
Only 10% of companies qualify as leaders in personalization, with the majority of businesses failing to adapt to customer needs, resulting in spam and irrelevant marketing.
The speaker warns that with advances in generative AI, businesses are on the verge of creating an overwhelming flood of content, which could lead to even more irrelevant communication.
The speaker emphasizes the importance of brands building trust with consumers by reducing irrelevant content and focusing on what matters to the individual, using personalization to improve experiences.
Transcripts
it was a bright sunny day and I was out
for a run when the large dog escaped
from behind his fence attacked me bit me
right in the leg I fell sprain my wrist
and to make matters worse I find out
he's not up to date on his rabies
shots okay off to the local urgent care
I go i' been there a bunch of times
before so I figured they'd my
information on file and quickly admit me
instead I got
this the same form that I filled out so
many times before and now I had to do so
with a busted
wrist and then I sat there waiting and
waiting and nothing beats waiting in a
waiting room than thinking did I just
get
rabies this is the opposite of a
personalized customer cust experience
you see it all around you don't you and
it makes you want to
go there's the hurtful my friend sanjie
his dog died six months ago and his
Online Marketplace is still sending him
email recommendations for his dog's
favorite
treats then there's the inaccurate I
bought my uncle a cane online and now
I'm getting trolled with ads for hearing
aids and senior citizen discounts all
over the internet I'm not that old and
then there's the I don't want another
one of that I just want one that works I
bought a dishwasher and it arrived after
9 months
damaged uh so I was waiting and waiting
and the same company sent me an email
and then another and another with
recommendations for more
dishwashers it's infuriating and it
doesn't have to be this way I lead a
team of over a thousand people around
the world dedicated to helping Brands
build better customer experiences what
we call true
personalization I've been geeking out
about this for years so much so that I
even wrote a book on it check it out and
I want to share with you what I learned
because I think we need to be demanding
but experiences from the brands we
interact with especially now in this day
and age when companies should be
competing on the scale of insights they
have about us at a speed enabled by Ai
and
Technology okay but let's start with
what true personalization even is unlike
customization which is about tailoring
products say a custom fabric for a sofa
personalization is about tailoring
experiences true personalization is when
a brand takes what it learned about you
in one interaction and makes your very
next interaction better faster cheaper
or more
convenient sounds simple on paper but in
all my work I found there's not really a
great way to measure personalization and
it's really hard to improve what you
can't
measure this is why my team and I built
the personalization index it's a simple
score 0 to 100 and it tells you exactly
where a brand stands you can score any
company on it in any industry and it's
really a first measure of its kind we
did exactly this for hundreds of
companies around the world and the
findings kind of shocked us what may not
surprise you is some of the companies at
the top of the personalization index
scoreboard of course we have Netflix and
we all know they provide great feeds um
of movies that you love to watch and
they match your preferences then you
have Starbucks when you open their app
they provide per scienced offers for
your favorite drinks but there are other
lesser known companies at the top of the
personalization index take sind their
mental health app and they actually uh
score you on 12 different brain brain
functions and then they might match you
up with your perfect therapist or they
would just give you helpful everyday
advice now some of the companies at the
bottom of the personalization index also
won't surprise you they hail from
Industries like Financial Services
Insurance B2B distribution and yes us
Healthcare including my local urgent
care but what did surprise us is the
extent to which personalization can
boost growth my research shows that
personalization leaders grow 10 points
faster than lards 10 points and they're
building competitive modes they're
achieving the highest customer
satisfaction scores in fact combined
personalization leaders will capture a
$2 trillion prize in incremental growth
over the next 5 years yes that's
trillion with a
t Okay so with all this potential upside
you might ask what's the secret sauce to
making customer experiences truly
personalized here's the secret and this
was the most counterintuitive finding
from our
research with true personalization
less is more less is more fewer ads
fewer offers fewer messages less spam
because when a brand truly respects you
and knows you it's only going to show
you what's relevant for you with this
less is more approach a brand can build
trust okay so let's look at how
companies actually put less is more into
action a brand that's perhaps less
talked about in this regard is Fidelity
and for those of you watching outside of
the US they're a financial services
company and they do two things really
well to live up to the less is more
Mantra number one Fidelity really gets
to know
you they don't just send you email and
blast you and then make decisions off of
Open rates no they actually want to get
to know the investment goals of each and
every client they might do this with a
one-on-one meeting with an adviser or by
sending you an online survey now this
survey is really interesting because the
companies designed it with their future
Outreach efforts in mind so they're
really thinking about your next
experiences from your very first
interaction they even have this cool
thing called the Gratitude question
where they ask what are you grateful for
in your life and then they personalize
your investment goals accordingly
imagine what my experience would have
been like in that local Urgent Care had
they been thinking about my future
experiences from the first time I walked
in second Fidelity once they get to know
you uses personalization to Delight you
teams look at your investment goals
along with data from your every next
interaction to decide what to do next
say you had a baby and you updated the
beneficiaries on your life insurance
they would take this data and educate
you on the benefits of opening a college
savings account they would even choose
how to educate you say you were new to
investing they might show you a brief
video or if you were really a Savvy
investor wanting to dig into the details
they'll send you an in-depth
article next and this is key they would
decide what not to do for example they
might suppress that previously scheduled
email about the newly launched Bitcoin
fund
in this way Fidelity massively reduced
the scheduled Outreach and shifted to a
much more triggered and personalized
approach the result engagement and optin
rates shot up okay so customers are
happier but what if I'm the guy at
Fidelity in charge of brokerage
transactions what about me if I can't
spam my customers I won't be able to
meet my monthly goals right
wrong Fidelity actually saw transactions
increase with this new
approach but unfortunately Fidelity is
in the
minority the saddest part of our
personalization index results is that
only 10% of companies qualify as
personalization
leaders as a result we live in a world
of
spam 360 billion emails are sent every
day yet conversion rates and open rates
are down we downloaded 250 billion apps
last year but uninstalled half of them
within 30
days and I'm afraid this is about to get
much much
worse why you ask because with geni
companies can deliver an order of
magnitude more content at a fraction of
the cost in a fraction of the time
we had the precipice of a Content
explosion and the jury's still out on
how this is going to
go so as Business
Leaders we need to stop myopically
focusing on selling stuff these people
don't want more
dishwashers and build trust with
personalization my research is clear
when you personalize customers
experiences they will give you their
data much more willingly in fact the
percentage rates go up from 30 to
90% with this data in hand companies can
build a virtuous cycle so if you're that
email marketer out there still spamming
customers stop for a second look at your
unsubscribe rates and think about how
you feel getting all that relev relevant
content and as consumers now is the time
to make our voices
heard you you can feel it when a brand
isn't doing right by your attention your
dollar your data can't you so break off
that relationship or at a minimum give
them a thumbs down in that survey after
you had a bad
experience companies are paying much
more attention to this aspect of their
digital relationship so it's worth the
two seconds to send that
signal I want to leave you with
something that I think a lot about as I
do this work have you noticed people are
a little bit angry actually they're a
lot angry they're angry about big
government and big corporations about
flying they're angry about how everyone
else is
angry look I'm not going to stand here
as the personalization guy and tell you
I have the answer to all the world's
problems but I do have to think
underlying a lot of this simmering gang
is a sense of not being heard of being a
cog in an
unresponsive impersonal
world I get it for much of human history
the world was personal we knew our
butcher Baker and Candlestick maker and
they knew us it's only been in the last
century or so with the rise of mass
Commerce and digital advertising that
businesses got impersonal
the fact is we have taken
personalization out of our
Lives it's time for businesses and us as
consumers to work together to put it
back
in to make us feel seen and heard once
again thank you
[Applause]
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