Where behavioural science gets personal
Nicola Henshaw is Head of Strategy at Proximity New Zealand.
Examining the psychology behind personalised marketing strategy, with Nicola Henshaw. While in the UK, I cut my teeth in advertising working with Virgin Media, one of the most scientific marketing organisations I’ve ever encountered. At Virgin, we’d send roughly three million pieces of acquisition direct mail every single month. This allowed us to test 30 variations of our creative and understand the direct impact on call volumes and sales. From these tests, we’d consistently get the same results: the more personalised the creative, the better it would perform. We were constantly thinking up new ways to make our comms more personal, but with little actual data on our audience, we had to get creative. We started to dabble in ‘faux personalisation’ – making things appear hyper-personalised, despite being sent to a broader group. We built in all sorts of details to give our comms the appearance of being personalised. This included personalised-looking offer boxes with generic offers and named vouchers on the bottom of letters, designed with anti-fraud patterns. Offer codes were even lasered on purposefully wonky to give them that authentic hand-stamped look. And it worked. An uplift in engagement proved that even the appearance of something being more personalised can motivate a customer to respond. I found this experience fascinating. It taught me that there’s so much more behind the effectiveness of personalisation than simply being personally relevant – there are many different personalisation techniques that subconsciously play on how we as humans think and act. Technology and data availability may change, but human behaviour largely remains the same. This is why taking a behavioural science perspective can help marketers be more considered in their use of customer data for personalisation. PERSONALISATION STRATEGY 1: ENDOWMENT – INVITING CUSTOMERS TO INJECT A LITTLE BIT OF THEMSELVES INTO YOUR PRODUCT OR EXPERIENCE This strategy operates on a simple human truth that the more ‘you’ there is in something, the more invested you’ll be in it. Footwear brands such as Nike have long recognised the power of this, by handing over more personalisation to their customers. ‘Nike by You’, for example, lets customers design their own shoes (also cleverly requiring them to become a Nike member in doing so). The whole experience makes the product more personally valuable to customers as they get to put a little bit of themselves into its design. Banking apps use this same strategy, by allowing you to name and choose personalised images for your accounts. Just the other week, while browsing online for a Kate Spade handbag, I thought I’d happened across the most sophisticated endowment strategy yet. The bag I was looking for was called the Nicola; it was meant to be – that bag must be mine! But scepticism soon kicked in, and after looking up the bag on my partner’s phone and finding it was called the Nicola there too, I realised it was less genius endowment strategy and more pure coincidence. It did get me thinking about the potential of endowment personalisation, though, and wonder whether any brands are utilising it to that extent today. PERSONALISATION STRATEGY 2: SOCIAL PROOF – USING THE POPULARITY OF YOUR PRODUCT OR BRAND TO DRIVE MORE POPULARITY Digital juggernauts such as Amazon and Netflix have been using social proof for years. Their algorithms serve customers personalised recommendations in ‘most popular’ sections. As users, this gives us confidence in our decisions and reassures us we’re not making radical choices. Working with Spark’s acquisition marketing team a few years ago, we sent out a DM pack, calling out the percentage in a suburb that was already with Spark. We found that simply by letting people know that their neighbours were switching to Spark, we were able to convince more people to do the same. PERSONALISATION STRATEGY 3: RECIPROCATION – DOING SOMETHING GENEROUS TO GET CUSTOMERS TO DO SOMETHING IN RETURN There’s a human tendency to want to give something back when something is received; like the feeling you get when you’re given a Christmas present from someone you don’t have one for. It’s no different with brands. Generous personalised offers give people the feeling that it’d be wasteful not to take advantage of the offer. It doesn’t even have to be a tangible offer, either. Once, at Virgin Media, to motivate customers to switch to fibre, we pointed out all the ‘hard work’ that had already gone into laying fibre optic cables in their specific street. PERSONALISATION STRATEGY 4: SCARCITY – DIALLING UP THE LIMITED NATURE OF A PRODUCT OR EXPERIENCE We always want what we can’t have. It’s a bit of a cliché, but no less true when referring to experiences or products. As proud partners of Frucor, we’re staunch Pepsi Max-ers at Proximity. But I must admit, I’ve been guilty of picking up the red bottle for my partner if I see a ‘Share a Coke with Dan’ on the shelves. This seemingly rare find is a great motivation for purchase, as we place higher value on things that are scarce and lower value on things that are abundant. You can see this strategy being used throughout the entire travel sector too, with airfare booking screens displaying messages such as ‘Less than five seats available at this price’, or ’Eighty-three percent of places to stay at are unavailable on our site’. The use of aggregated customer data to personalise websites and motivate a response is a proven, effective digital personalisation strategy. The wealth of data at our fingertips allows us to personalise more than ever, but sometimes the intense resources required to personalise communications isn’t justified by the outcome. Anchoring personalisation in behavioural science can help us decide where to personalise and, equally importantly, where not to. Using a test-and-learn approach, our aim is always to start simple and build to complexity. Having a clear hypothesis behind each element of personalisation helps to achieve the right balance of effort versus impact. So the next time you’re designing a personalisation strategy, be really clear on the measurable impact you expect from it. And where you can, test to prove that the effort you’re putting into your personalisation is delivering results.