Sunday, October 9, 2011

The Need to Personalize: Why Consumer Data is More Important Now than Ever Before

As a long-time researcher, my answer to many questions is, "What do the data say?" I consider myself to be a very empirical person, so having data to support views or my approach to life is very important to me. Even in parts of my life where no data are available, I continue asking questions. And, like most people, I constantly observe other people and draw inferences from their behavior. So when I read about some of the cutting edge work the Obama campaign is doing with supporter data, I wondered, "Why aren't more politicians doing this?" and more importantly, "Why aren't more people doing this?"

I'll be the first to say that too much personalization is not necessarily a good thing. For one, I'm really not a fan of design-your-own-major programs and would be happy to go into the "whys" of that sometime. But when it comes to marketing or informing people about causes they can join, personalization is an excellent idea. In fact, it's the logical continuation of what market researchers have been doing for years.

When a company creates a new product, designs a new ad campaign, etc., they want to get consumer perspectives. They do this through things like focus groups, where a group of similar people are brought in to try out a new product or view a new ad and discuss their thoughts as a group (I also frequently use focus groups in my research - you can get a lot of really useful information and they're fun to do!), and survey research, where people may (as an example) hear a new product slogan and rate it on a scale.

Market researchers also often collect demographic information from their participants, things like age, gender, race & ethnicity, and education, to see how these factors relate to responses to the product. This gives some basic information on who is likely to buy your product, and what approaches those groups respond to. A company who wants to appeal to many demographic groups may develop more than one ad campaign and put certain ads in places likely to be seen by certain groups. If you want to see some basic personalized marketing in action, grab a couple of magazines, say a fashion magazine and a sports magazine. Take a look at the ads in each - the ads in the fashion magazine may be for different products than the ads in the sports magazine. Not only that, you may notice that even ads for a product found in both of the magazines are different in terms of color scheme, layout, and writeup. You'll probably even notice different people featured in the ads.

The same is true for advertising during certain shows. Market researchers know what kinds of things their target demographic likes to watch on television and will buy ad space during that time.

Of course, I call this "basic" because it's not really personalized to one specific person; it's aimed at a specific group who have some feature or features in common. But advances in technology have made it even easier to gather information about a specific person, and in some cases, deliver that personalized advertising directly to that one individual. Google has been doing this for years. Facebook is also doing more and more of this targeted marketing. Using data from people's search terms or status updates, specific ads are selected from a database and displayed to that person.

Why is this personalization such a good idea? People respond to (e.g., process) things that are personally relevant more quickly. Research shows that people, for instance, show stronger preferences for the letters in their own names, probably because these letters are more familiar and therefore more fluent (easier to process - discussed in a previous blog post). When we're feeling especially miserly with our cognitive resources and are operating on auto-pilot, such highly personalized information can still "get in" and be noticed and processed by the brain.

 Personally relevant information also appeals to our sense-of-self, our identity (also discussed in a previous blog post). We view the world through the lens of our personal experiences and details; some people may be better at considering another person's viewpoint than others, but we can never be separate from the self, so our view of the world is always going to be self-centered (and I use that term in a descriptive, rather than judgmental, sense).

Even in theories developed in fields like psychology, we recognize that the perspective of the theorist receives a lot of weight (this is why following the scientific method to develop testable and falsifiable hypotheses and gather empirical data, is so important; it's also one reason why theories are developed by many studies on a subject, hopefully performed by more than one individual, and no single study is the end-all, be-all on the topic).

I remember reading a quote in college by a great psychologist about Freud, and after much searching, could not uncover the quote or the source, but the person (I want to say Gordon Allport, who met Freud briefly when he was 22 and became disillusioned with psychoanalysis as a result) essentially asked of Freud's theory, "What kind of little boy would want to be so possessive of his mother?" - that is, he suggested that Freud's theory, specifically its emphasis on the Oedipus complex, was more about Freud himself than normal human development.

These days, individuals are doing things with computers that were once only reserved for the nerdiest of super-nerds sitting in front of a computer the size of a small house.

And if we leave it running all night, we could have our checkbook balanced by tomorrow morning! Who has the punch cards?
The people who are embracing today's technology to personalize content are the ones who will be sticking around as the market becomes more and more saturated. That's why I would argue that this kind of personalization is so important - there are almost 6.8 billion people on this planet, nearly all of whom will make their livelihood off of selling something (whether that something is concrete, like a product, or abstract, like a skill). As the population continues to grow, getting even a minuscule percentage of that total to see what you have to offer and show an interest in buying it, is going to take some serious data-crunching ability.

If you sell a product, any kind of product, you should be collecting data on your customers and using their information to make important decisions. And if you've got any kind of computational and statistical know-how, work those skills, because you are going to be sorely needed as the market continues moving in this direction.

True, some people are just born to sell things - they can convince you that you need this product, that your very life depends on having this thing. We can't all be Steve Jobs, walking into a room and presenting the product with such flair and resonance that we all suddenly wonder how our life was ever complete before iPod. (Years from now, when people look at the products Jobs was responsible for and think, "Oh, a personal music player, how quaint", they're still going to watching and dissecting his presentations to find that magic formula.  If only it were that easy.)

And perhaps part of Jobs's genius was that he could do some of this data-crunching in his head, examining how people are responding to his presentation in real-time and making subtle shifts to bring the message home and get people on board. Few people possess that ability.  But for the rest of us, we can perhaps get by with a little help from our data.

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