I've known Alex Atzberger, current CEO of Optimizely, pretty much from the moment he took over as President of SAP CX in 2018. His reputation had preceded him. He was a wunderkind -- a true rock star in the SAP firmament and the status has continued into his current role as CEO at Optimizely, formerly Episerver. He is not only an excellent CEO and has been exactly what Optimizely/Episerver needed but he is a thinker as well as a doer. In this post, he looks at personalized digital experience in a world where cookies are back to only the things that you eat. Meaning they are no longer part of the customer's experience or used to remember the customer's data or settings. A world that a year or two ago was maybe not unimaginable but not thinkable in the immediate future. Now here it is. And here is Alex to tell you what you might want to do.
Oh, yeah, one last thing. Alex loves chocolate but manages to make that an action item. He in conjunction with a world class chocolatier, founded Wonderbon, a milk chocolate drink that goes hot or cold and is made of real, world class chocolate. I bought it on Amazon and trust me, you want to try it. For me, an analog personalized experience. 😄
Now back to personalized digital experiences.
Take it away Alex.
You've seen the headlines about Google removing support for third-party cookies. While the timeline continues to shift, the writing has been in the sand for a while now. And for good reason. According to a study by Pew Research Center, 72% of people feel that almost all of what they do online is being tracked by advertisers, technology firms or other companies, and 81% say that the potential risks they face because of data collection outweigh the benefits. As people become more informed, they're looking to engage with brands who they believe will use their data responsibly and respect their privacy.
In June, Google announced a delay in phasing out support for third-party cookies until 2023, resulting in many businesses breathing a sigh of relief that they no longer have to scramble to adjust their consumer data collection practices. However, this delay doesn't change the fact that we're headed toward a cookie-less world.
We will lose a data source that we've relied on – perhaps too heavily – since 1994 when 24-year-old engineer Lou Montulli invented the cookie. This data certainly can be helpful, supporting what you already know about a customer based on first-party data. You can draw additional connections. But, if you're relying exclusively on cookies to understand your customers, you don't really know them after all. Even worse, you could be making incorrect assumptions that lead to poor, disjointed experiences. A critical gap and opportunity remains in understanding customers through the content they engage with.
Think about the last time you walked into your favorite clothing store. You were likely greeted by an employee. Maybe they asked if they could help you find something. If you're anything like me, you probably said, "No, just browsing." So, you browse, pick up a shirt, glance at a pair of pants. The employee starts a dressing room for you with the items you've grabbed so far. When you head back to start trying those items on, the employee mentions that they included a sweater in your size they thought would match nicely with the pants you selected. You try it on, they were right, and you walk out of the store with an additional item. Why? The employee personalized their recommendations based on your behavior. They didn't need to know your name, income, email address or what store you were coming from to execute this personalization. They simply needed to observe first-hand what you were doing while in the store.
Now imagine that instead of heading to the brick-and-mortar store, you visit their website. You're greeted with a welcome message. While looking for a new sweater, you click 'fall outfits' at the top of the page and see one that's trending as a 'featured item' and is on sale for $38. You click, view and add to your cart. Then the website shows you a pair of pants that have a 'similar vibe' to the sweater you picked, so you add them to your cart as well. You came for a sweater. You checked out with a complete outfit. Why? The website personalized its recommendations based on your behavior. Just like the in-store employee, it didn't need to know your name, income, email address or what website you were coming from to execute this personalization. The brand simply needed to observe what you – an anonymous visitor – were doing while on the website.
Both examples resulted in a win for the customer and the brand, and neither required cookies. Why? The shopper was helped in a personalized way so they could more quickly achieve their goal.
The phrase 'You are what you read' applies here. The content customers engage with tells a story. What resonates with them (via views, clicks, likes, shares, email opens, etc.) points toward their interests, preferences, likes and dislikes – and more. I recently discussed this with a retail partner who shared with me that 97% of visitors to their website don't register by creating an account or profile. This isn't uncommon. For most companies, only about 3% of visitors choose to login or identify themselves. Brands who don't strategically market to this anonymous audience are overlooking a great amount of potential business.
So how can we operationalize this personalization online, especially when we don't know the real identity of that person? A customer or potential customer is telling us what they're looking for by their first few clicks on a website. Listen to them and experiment. Customers are always evolving and only in an adaptive state can we be prepared to react accordingly.
Take for example someone visiting your website and their first two clicks are on wedding dresses. Experiment by showing them a third wedding dress. Or show them a wedding cake instead. This testing will help you to make confident decisions grounded in data.
This sounds daunting, but earlier this year, the Optimizely team created a Digital Experimentation Playbook to break down this process into five steps: Research, Ideate, Refine, Plan & Run, and Review.
During the research phase, you're collecting relevant qualitative and quantitative data – from customer surveys and reviews to web analytics and conversations. I see a lot of marketers conduct exhaustive research, but they stop short of putting all of the research together for a full picture. The research is only a reliable guide if you consider how the qualitative and quantitative pieces work together.
The next step is to analyze the customer data collected to identify the problem and where improvements need to be made. What problem are you trying to solve for the customer? Determine your key goal and top metric for this experiment. Now is the time to get specific – you can't solve every problem at once.
Then it's time to refine. Create a problem-centric hypothesis where you state what you believe needs to change, what the outcome will be and why. Here's an example of what this might look like.
Customer surveys showed nine out of 11 website users find the featured products on the homepage to be irrelevant. If we set the algorithm for featured products on our homepage to display products from recent categories the user has visited, then the percentage of users that click on the featured products and add a product to their cart will increase.
Plan & Run
Once you have your hypothesis, you can develop an experimentation roadmap that includes key metrics, duration and target audience, and roll the experiment out to a small subset of users.
Finally, you have the results to analyze to see if the outcome has proven or disproven your hypothesis. Either way, you're learning how to optimize top-line growth, reduce customer churn and deliver world class digital experiences.
When you listen to your consumer and recommend relevant content, you're showing value. When you add value to their lives, they're in turn more willing to provide information such as an email address, address, name and age that can be stitched together to create a fuller customer profile. And at the end of the day, personalization builds a relationship, and a relationship builds trust. Perhaps the death of third party-cookies will be the push marketers needed all along to really get to know their customers.
Thank you, Alex. Use the links above to check out Alex and Optimizely.
On another note entirely, watch for an announcement about the morphing of the CRM Playaz - coming to you (the announcement that is) in January 2022.