There’s a New Chief in Town – The Chief Executive Customer

Companies have come a long way from Henry Ford’s famed sentiment: “Any customer can have a car painted any color…as long as it is black.” In fact, the past few decades have seen a slow but persistent shift in power from companies to consumers, and consumers must certainly don’t all want black. 

Today, instead of individuals demanding corporate transparency, corporations are keenly interested in customer transparency – specifically transparency into the individual preferences, needs and desires that drive purchasing behaviors and brand loyalty. This shift has caused marketing and sales departments to alter their strategy from “finding the right customers for my products” to “finding the right products for my customers.”

Our modern market, then, is a market-of-one, and would have had Henry Ford spinning on his head. Instead of viewing your market as composed of 1 million customers, companies now look at and analyze 1 million individual markets, each composed of a single person. This, in turn, has led to the rise of mass customization.

The Rise of Customization 

Dell spearheaded mass customization in the 1990s when it focused on selling customizable PCs to individuals. Since then, customization has become king. 

Sleep number beds give slumberers a choice of 100 settings for each side of their bed. NIKEiD allows sneaker fanatics to personalize their Nikes by making both form and function choices. Even Coca-Cola will personalize a can for you or, if your name is popular enough, you may just find one specifically for you in the next 12-pack you buy.

Marketers have long realized that the end consumer has unique desires and triggers for both the product and the purchase journey, and thus marketing departments have attempted to holistically understand that consumer and provide emotionally relevant products that delight and surprise when convenient. The end goal: to offer each individual customer a completely customized transaction that pushes them through the funnel at a higher conversion rate. 

But Does It Work?

Just because we can offer hyper-customized experiences, does it mean we should? Is the individual customer – am I – looking for a completely differentiated purchase journey and end product? Are you?

“Just because we can offer hyper-customized experiences, does it mean we should?”

At first, my answer was a resounding YES to both questions. When J.Crew emails me with “Hi Kelly” and recommends items in my size based on past purchases, they give me a curated selection versus the basic stock and vastly reduce my search costs. In fact, when they see that I recently purchased a blazer, they send me a $20 promotion code for the matching pants – in my size. It’s convenience on-call. 

Yet, this model is not sustainable or scalable for all companies, and eventually, I’ll just glaze over the personalized email just as much as I would a non-personalized one anyway. There has to be a happy medium between mass production and mass customization. And digital personas represent that medium. 

Persona Creation and Cohort Analysis

It is easy to see the value added as firms move from creating one product to creating five and even 50 variations. But, does it make sense to create 5,000 or 50,000 versions? 

Esteemed social researcher Brené Brown argues that humans have a strong, innate desire to belong and to connect with others. One way we show group affiliations is through our purchase choices. Look around at a football game, a sorority house or even a corporate retreat. Think back to high school where self-defined cliques composed of self-selected members were easily identified by their clothing, hair and accessory choices. CMOs must keep in mind that “…consumption is a socially located act, where consumers project their identity through purchasing decisions. No consumer is an island and individuality is situated within the wider context of tribal identity.” 

The second human characteristic firms must keep in mind is that we, as consumers, very much value our, or at least the perception of our, autonomy. Part of why the uncanny valley is so unnerving is because when we begin to questions whether or not we know ourselves better than a computer or algorithm, we lose sight of our personal agency, and fall victim to a digital doppelganger of sorts (which can very much be stolen and/or used against us). 

In addition, if marketers are too spot-on, not only can they mess with our self-perception and identity, they also step on the toes of “shopping.” Many purchases are irrational and emotionally charged. That said, how can we make impulse buys if someone is telling me, rationally, based on set past behaviors, what I want or what I should purchase? 

Will we see a reminiscent adolescent sense of shackling off parental chains in response to over-customized content, products and the like? Is there not a better solution?

“Persona strategy over an individual strategy allows your customers the idiosyncrasies of real people.”

Enter persona creation and cohort analysis. There is no question that data-enabled, targeted marketing can add tremendous value to customers. In fact, an IBM study revealed that general sentiment is changing from viewing marketing as an obtrusive sales pitch to viewing it as a curation service. On the firm side, McKinsey has found that personalization can increase return on marketing spend by 5-8x and increase sales by over 10%. Both sides can capture this surplus. 

Personas are character sketches of a firm’s current customer base, and 8 to 10 different personas is enough to capture the main identifiers, behaviors and preferences of your audience. Creating these personas require an in-depth understanding of key attributes of your audience, accomplished by cohort analysis, but still allows your customers the idiosyncrasies of real people. Better yet, using a persona strategy over an individual strategy when it comes to personalization keeps the net wide enough to attract the attention of strangers or those just “browsing,” while still reaping the benefits of personalization. 

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