Peak personalization

Customerland EP 6 – Achieving Peak Personalization

Somewhere in-between none and way-too-much lies the perfect balance – threshold, if you will, of how much personalization brands really need in order to optimize the channel, the communication, and the relationship.

The problem is, that line in the sand gets blown around constantly, and shifts radically within the contexts of the category, the brand and consumer expectations.  

Gustavo Wille, 84.51’s VP of Data Science and his team there, oversee some of the most sophisticated personalization efforts in the world – certainly some of the most successful ones.  We sat down with Gustavo recently for a lively and informative conversation to understand how 84.51 approaches brand personalization and what is behind their massive successes.

Also, a special thanks to our sponsor for this episode: ExpectationAudit.com


Full Transcript Below

Mike Giambattista:

Let’s just talk about how brands achieve this, because on the one hand, personalization is, has become a catchphrase for, you know, progressive marketing. But, but let’s talk about what it really means practically and what you and your team at 84.51 are driving at.

Gustavo Wille:

Yeah, and it’s an interesting concept, cause I think model or personalization brings it back to the word personalized, which, you know, the basic definition of the Webster will be to make it personal. And then from there it can take any kind of tangent to whatever area wants a personalization, digital space, personalization on the store, personalization in cars. So everyone gets their own flavor to it. So the important thing here as we define personalization, I think is like, what is the perspective that you wanna bring to the conversation? And for us, for us to, one that perspective is the customer’s perspective, is how can we have a very customer centric approach to what we’re doing? Cuz that then defines the problem, right? 

Then our problem here is, how can you personalize to create a better experience for the customer? How can you personalize to meet the customer where the needs are, how we can personalize to make sure we are not doing no harm for the customer. So all those facets only exist on the scope of you have the customer in the center of everything, and from there you can start formulating your strategies, formulating your science, and using the data then to supply what you need to be able to cater to your customer.

Mike Giambattista:

So you, you’ve just opened up another 30 subjects that we should probably talk about, but, but may not get to today. But, you know let’s just start with companies that are might be struggling with their own definition of customer centricity. You know, what does that really mean? It’s, it’s, it’s nice to say that you’re a customer centric organization, but there’s some really practical things that would, would kind of, I would say tell to tale if you’re genuinely customer centric or not. How does that play out with your operations? I mean, what do you look for with one of your clients? And I know some of your clients in fact maybe, maybe it would be helpful just to talk a little bit about your client base. It’s it’s impressive and and I think adds some credibility to this whole conversation.

Gustavo Wille:

Yes. So we have a large client base that works with us, involve insights and marketing, you know, 80 51 being that retail data science insights media, the company with a hub of Kroger as all the CPGs interest in publishers and partners to create that valuable experience for the shopper across the path purchase. And then it’s kind of becomes like a path, right? It’s like how can we bring the customers conversation as we talk to our partners, how we can bring the data. And the way that comes to life is to our first party data. We have, you know, whenever two houses in the the house in the United States, we have them as customers. We have more than, you know, 2 billion transactions that we can leverage to understand how we can cater to our customers and then leverage that information. The one, one big differential for us, not only you can say at a point in time how people behave, but also over time.

So that longitudinal view is important to say how, how people, you know, how they shop on store, how they shop on digital, how do they shop, what do they prefer? Some people, you know, only go to store. Some people like to have a mix of delivery and digital and all those come to consideration as we’re creating the experience for them, right? And like, for example, we have our very loyalty customer and this conversation very loyal cause that’s kind of my area, so apologize for that in advance. But <laugh>, so we have a very loyal focus here because we know that loyal customers and usually are 10 times worth a new customer because they’ve been there, they’ve been with us, they have that engagement, they had a relationship with us. So anything of that about that. Then how can you cater an experience that would make them happy, that would improve their lives or make their life easier. So they’re making the life easier. It’s a very big focus of us here.

Mike Giambattista:

Can I ask a a a couple of questions there because I think you, you brought up something really, really interesting. The, the data point a loyal customer is 10 times more valuable than a non-lawyer customer can, can we just talk a minute about how 84.51 defines a loyal customer? Because, you know, there’s a whole spectrum of loyalty out there from, you know, I sort of like you to, I’m bonded to you and would die for you and all kinds of things in between. But how does, how does, how does 84.51 look at, look at that, what, you know, what are those criteria to define a loyal customer?

Gustavo Wille:

Yeah, we actually have a specific, we look at the data to break the customer’s wolf on that engagement, frequency of engagement, and then start understanding what segmentation they default to say, okay, what are the people that are kinda like coming into Kroger or the people that are customer customly engaging with us at Kroger at the different areas. And since he trial those segments that people will vary of like the store. And as we get more and more loyal, you start, you know, investing more areas of the Kroger universe. And that’s kinda a starting point, right? And then from there you’re gonna start saying, okay, how can we make sure that we are rewarding them? How, make sure we understand where they are in the process and making sure that we’re giving something that they will enjoy. And then we use the same data then to understand, okay, what do you behave?

How do you shop? And this, this will bring an example. For example, we have what we call the best customer communication series. And every month we send a either an email, it’s a C, either email direct me, or that goes to around 11 to 12 million people. And you have 12 different coupons that are unique for you based on what you shop. And the goal here is, you know, you being a customer with us want to make sure that you’re getting your water from that and getting the stuff that’s relevant to you. So the relevance is important, and especially if you think loyalty on a marketing funnel will being more of the lower level the funnel, you really want to have that engagement, really wanna have that okay reward, but as reward in creating a connection, you see more engagement, which then to the business side for the customer side means, you know, I’m getting what I want from this. I’m getting the, my needs met. 

And then for the business team, like we have more engagement, we have incremental sales, incremental business, whatever may be the metric that we’re looking to, to find on that side. And then that fuels, you know, as we have more and more over time, we have more people receiving those because we have a better scope of a better base group of customers that are involved in that and have enough, you know, of the engagement with us to receive such communication.

Mike Giambattista:

Right. I’m, I’m jumping topics here a little bit, but it’s all kind of mashed up in my head <laugh> based on this theme. But I was talking to somebody not too long ago who, who ran essentially it was a personalization technology company. They, they you know, their, their entire value proposition was, we’ll help you understand your customers by going through the data and we’ll help, we’ve got technology to help you deploy messaging based on that personalization. And one of the interesting things he said, it was, he said, first of all, you can’t use my name. This is very off the record, and please, please, please don’t mention my employer. But he said, you know, there’s a, at the brand level, everybody understands and wants more personalization. Everybody gets it. There’s, there’s a kind of a known expectation that, look, the more I know about my customers, the better I can serve them.

But he was talking about brands that may not not have had the kind of nuanced understanding of what that really means. And he had a couple of clients and he kept talking about this one in particular that were like, listen, we want to know everything about our customer. We want to know everything there is to know about them so that we can service their, basically their entire lives, you know, in a 360 degree way. And he said, you know, whereas we can do that, we can, his, his company’s technology could understand literally a, a a 360 degree view of it. But he said, just between you and me, the juice isn’t worth the squeeze. You spend an awful lot of money and time and energy and effort to gather all this data. That one, a lot of it you just can’t use. There’s just so much data you can’t really use it.

And two it, it very quickly crossed from functional personalization into things that, that were kind of questionably over the line in terms of, of data privacy. And I know that 84.51 has, I mean, listen, you have Kroger and a handful of other top clients. You’ve, you’ve navigated this really, really well, but, you know, where is that threshold? Where is that, you know, how much do we need to know about a customer in order to have a functionally healthy relationship with them? Is there, I mean, let me just put it out there. Where is that threshold? Where do you determine how much you need and what, what kinds of data you’re looking for?

Gustavo Wille:

So that’s an interesting concept. Cause I think in my head I would not have the same path to get there. Right? So if I’m her correct is more of like they, whoever you talk to when deep down into the knowledge and then from there try to bring it back. My thought process is actually kind of the other way around, right? Is what are the experience, what are trying to make better or how can improve the life of the customer? And then from there to understand, yeah, well, kind of data can help with that. So you’re not trying to go like, I want understand everything. Like what are the points that I can help and I focus on the point of focus and experience and then create something for it. So to me, the the, you mentioned that the person said that they don’t see the value. I don’t particularly with a hundred percent agree with that. Cause I think the value comes on like how we can generate specific purpose to that data. But if you don’t start off a specific purposes, you’ll never get there. Right? Yeah.

Mike Giambattista:

Yeah. I think that was kind of what his point was, is you know, this person, his client just really wanted everything but didn’t really have a strategy behind it and didn’t seem like it anyway.

Gustavo Wille:

Yeah. Which is one things like, you know, and we say that, but it’s because we really mean it. Like make the customer’s life easier beyond the experience on the way, and those kind of things then generate that, okay, we have the data, want the customer won, understand in a way that has been beneficial for them, right? That we’re serving. We are in a way servants, we have the data where servants are not guiding. You’re just trying to make it better as you launch your personalization journey here, as you scale, as you’re start to learn. Cause at your point, that’s so much data out there. Cause it can be all the data, but data by itself doesn’t mean anything. It’s how you translate and generate knowledge from the data the proper way, having that domain specific application to it and then translate into, oh, I’m gonna personalize your communication, I’m gonna personalize your digital experience as you log into our properties. Right? And then I think it’s a little bit different than what you describe.

Mike Giambattista:

Yeah. Yeah. It’s a, you’re it’s an entirely different starting point and and purpose, I would think. So I don’t know if if this is too much behind the scenes and, and if you are not comfortable talking about it, that’s fine. But I’m really interested since you bring it up you know, this is the way that that 84.51 approaches these kinds of things. Could you walk us through a, a typical, if there is such a thing, kind of a use case, you know, say one of your large clients has said, we need to fix X or we need to improve Y or, you know, we’re looking for this kind of an outcome. What’s, what’s the process from there? I mean, I mean, how does 84.51 approach those kinds of problems? Where does it, where does it start?

Gustavo Wille:

Gotcha. So let me, let me try this. Let me give you a journey to the customer and then from the journey to the customer, how then that connects with some of the clients. Would that that be helpful?

Mike Giambattista:

Perfect.

Gustavo Wille:

All right. So thanks. Know I mentioned that lot the customer mail that the person will receive based on what they buy the most, you know, a coupon to say like, thank you very much for doing that. So let’s say the same person, okay, I got my coupon, I’m excited, I want to go online and create my cart. You log in online, the first thing that we see is the store, my cart, store my cart. It’s a science driven experience where we see what does the person buys the most. Why does they’re more connected with that would be useful for them to speed their basket building, right? Want to make experiences seamless and as positive for the customer. So that’s one of the ways that you can do it, right? They have the thing, oh, I see my staples here. I click and I have to search and I have to do very things that’s very complicated.

It’s all my basket. And then, you know, they go to checkout and they say, I have all those five things in my basket. And you have another that’s science driven that says, okay, based on what you have, you might at another staple. So you have a dig forget. It’s kind of, kind of that, you know, oh, we realize that you might like this. Have you forgot something? You want to add this back and make it easy. And one click button in there, right? So let’s say the customer, does that put their order in, leverage all of that. Then you have, you know, as they’re purchasing, we’re gonna have substitutes, you know, maybe somethings out online. And then we also have understanding of the customer to say, okay, those are the most, like, better substitutes so we can suggest, and this year we have a really good, good improvement on air as well.

So that is the overall perspective from the customer. So you can see the customer here, they’re getting value from, I’m getting discounts on what I need. I’m very easy to find the stuff that on my staples and I’m adding to the carts. I’m also being reminded of things that are very important to me that want to add to the cart. And then with something, it’s, it’s not available. They, they understand me to add other products in mind. Now then you think about these experiences that, okay, how can we get, makes the brands and others participate on experience as well, right? So then only have some of the capabilities we have, like for Grow market, for example, within that scope of the things we’re offering to say, okay, those one or two people can then come to us and boost to make sure that it’s comes up to the customer in in the first places. Versus, you know, later on the, the, the list. But it’s still a list that’s very pertinent to the customer. The other customer Miller people actually want to make a bring, mix, a good mix of the customers who will bring both brands as is our own, as some shopping coupon is like a very much a big mix based on what people want. And that’s where brands come along as well, right? They say like, those products, this circulation, I want to be a part of that piece of the customer journey. So the customer know that I also care about them and want to reward ’em for their loyalty to my brand.

What could you achieve if you knew what your customers expected ahead of time? 

What if you could know what customers expect by category and by brand 12 to 18 months ahead of traditional brand tracking methods? 

And what if you could know exactly where to adjust and where to spend in order to drive the most benefit every time? 

A customer expectation audit allows you to identify areas that require strategic reinforcement, as well as pinpoint which values will contribute most to an emotional bond with your brand and optimize accordingly. 

Customerland has partnered with Brand Keys, the world’s oldest loyalty focused consumer research firm to bring real world customer expectation audits to brands, brand managers, and to CX practitioners everywhere. 

Wanna know where your brand stands and exactly what to do about it. Go to expectationaudit.com, that’s expectationaudit.com and download a sample audit today.


Mike Giambattista:

So, what you’re talking about here is a lot more than just creating insights from data. You’re, you’re I mean you’re d you’re generating tactics and strategies beyond that. And it seems to me that that in order to pull that off, 84.51 has to interact with you know, deep integration with whatever the C D P is there. You’d, you’d probably be interacting with the UX team on how to actually drive those interactions on, you know, mobile apps or whatever digital space they’re talking about all the way down

Gustavo Wille:

To collaborative <inaudible> here. Like we’re all working together to solve that, to solve, create and improve experiences, right?

Mike Giambattista:

It’s, that’s a big undertaking. And you know, for a

Gustavo Wille:

Yeah, that’s the word. The fun is right. That

Mike Giambattista:

Doesn’t Yeah, it actually is. I think you, yeah, you jumped to the point there. It really is where the fun is. That’s, that’s where the magic happens. If you can kind of take those insights and, and turn ’em into actions, I mean, I don’t have to tell you this, but, but I will just for the sake of this conversation, that, that forming a bond, let’s just call it loyalty, is it’s, it’s about more than just the correct communications at the correct time in the correct place. 

There’s, there’s what you’re hoping for, I think ultimately is something that transcends the rationality of here’s the next thing I should buy on into something that feels a lot more like an emotional bond that’s, you know, that, that is you know, I feel about this, this brand, this store, this product, this, you know, this item. Yep. and, and that’s a really difficult thing for a lot of brands to kind of get their arms around. I mean, it, yes, it’s data at the core of it, but how do you advise clients to to take that idea of customer centricity beyond just the physical transactional things into things that might feel more like, like the emotional realm?

Gustavo Wille:

Yeah, and I think that’s what I think about our aspects of the how can the trans, in a way, it’s like how can the transaction become an emotional connection here? Right? Right,

Mike Giambattista:

Right.

Gustavo Wille:

And that’s when I think about the, the, the total customer journey, and then it’s not like you, there is no one size fits all zoom mention that’s no. Like, oh, gonna do one thing and then people gonna start loving how the get-go that doesn’t exist. If that, that was, that exists, everyone will be doing right. But then start thinking about how can I think about a way to reward, how can I be there? And all those together start creating a sensation that you know, that the person feels hurt or rewarded. Mm-Hmm. <affirmative>. So as an example that I can give, like, yeah, we, you can look at the, the, that customer communication that was saying and say like, oh yeah, just saying coupons. Why is that matter? Right? 

And on and on again, we get written handwritten letters from customers thinking like, you really appreciate it, you really are thinking about me or really bringing the stuff that really like, and that those are the, the, the scenarios that will create that connection with the customer because they really saw, you know, yeah, maybe you won’t get all them, some of them the one I have that view, but some people really enjoy that, and that becomes experience to them and everyone will have a different experience.

So the more you can think across the land, how can we make it easy and make it faster and make it, you know, very centric to what they’re buying, then that’s when they start creating a more holistic view of a connection beyond just a transactional of the everyday piece.

Mike Giambattista:

I, I don’t think anybody would argue with, with the kind of the, the theories behind that. It’s it’s when you have to put that into, into practice that I think in my very limited experience watching this, but you know, if it’s not transactionally driven where there’s a direct roi, there are a lot of companies that think, well, you know, let me get to that later. You know, it’s not, it’s not a, it becomes a, a secondary priority that way. Yeah. And, and that’s where I’ve seen a lot of companies say, well, you know we’re just gonna approach it this way first, which makes a lot of sense. I mean, you have to look at roi of course. But customer centricity tends to fall apart a little bit on the less direct directly effective ROI kinds of kinds of items, in my view. Anyway, I’d love to hear your view on that.

Gustavo Wille:

Yeah, that’s, and I think that’s, that’s, yeah, I think you nail on the head of like, you can’t be only when it’s a good, it has to be a central strategy and it has to have the multifaceted approach to that, right? So for example, one of the things I do, and, and I understand that the, the notion of, you know, the, the roi, but sometimes we actually get r ROI of things that are counterintuitive at the first glance, right? So for example, we have a science that determines how, what kind of frequency people want to get their immuno communication because we know some people, you know, wanna get, once people wanna get zeros, people wanna get five. And anything that’s outside of their threshold, they will not be, it’s not gonna be a platform experience for them,

Mike Giambattista:

Right?

Gustavo Wille:

So it’s, it’s not easy sell point because they can usually say, okay, but if I’m not selling emails, send emails to everyone, how gonna get, get their attention? And mm-hmm. <Affirmative> this is saying, well actually if you only sell what they want, or if you only send what they want or what they care about, and the frequency that they will open your engagement actually prove because they actually then will use it more. So we seen very good benefits and even a positive ROI of like having, sending less communication to folks, but then looking at that, that group against the control group and seeing increase in sales.

Mike Giambattista:

Yeah. And, and it’s almost just because they feel heard,

Gustavo Wille:

You know? Yeah. And a way it’s kind of that the mentality of you have to be, see the customer as a whole, so it’s a do no harm and we want to do things to the customer. We also make sure that they’re not, we’re not harming experience or not making a thing that would cause them a pleasurable interaction with us. And you know, there’s so much canoe there, but it’s like, if you think about that, that sounds important things, and you get positive, or I am sometimes even when you wouldn’t expect it the first glance, but they, they are there because that’s how you connect the customer behavior to how you wanna communicate them and really create a channel versus just, you know, a blast or anything like that, that way, right,

Mike Giambattista:

Right. Where you’re just looking at like, you know, opens clicks and purchases. So Yeah, exactly. I was talking to a guy, this is maybe three weeks ago who was one of the original architects for Tesco’s original loyalty program. And, and Tesco, just for listeners a poor analogy would say, Tesco is basically the Kroger of the uk and there are a lot of people who’d argue with that, but it gives you an idea. There are a, a very large, maybe the largest grocery chain in the uk. And this particular individual was one of the architects of their loyalty program. And it started out as literally, they literally, the only goal there was to come up with a cost effective way to say thank you to their customers. They, there was no other intent there. They had no view to of, to a, an enhanced r ROI whatsoever.

They just wanted to say thank you. And what they found out, and the way, the reason it turned into a loyalty program in earnest is because the response to that actually started generating sales. I mean, they, they were as floored as anybody and said, you know, we, we think we’ve invented something by accident here. So granted, this is a long, long time ago, but it’s now it’s turned into a whole industry. The point being though that in approaching loyalty in, in something other than a direct ROI method resulted in a huge amount of, of customer goodwill, which then in turn resulted in increased sales and basket size and frequency and everything else.

Gustavo Wille:

Yeah. And going back to the infographic we were talking in the beginning of the conversation, that’s, or saying like, actually a person pays off. You have the sales uplift, you have a personalized experience, generate more sales and a non-personalized, you have the average digital order value coming up. So those are all because we’re making a better experience, and in a way it’s the customer rewarding you as well for creating that connection. And then that comes in ways of more engagement with the retailer and the brands and that translate into more sales and, you know, better, better results overall.

Mike Giambattista:

So I want to finish out this, this conversation, which I really hope we get to continue at some point, but because you sit at the center of the data that’s driving so many loyalty and personalization decisions out there and you get to see how brands are actually using data that you, that you generate and the insights generate. If, if you were literally the person in charge of brand X massive CPG brand and knew what you know about data and personalization, what would you do that might just be a little too daring for most of the people now who are exploring that? Is that a fair question?

Gustavo Wille:

I’m trying to understand. Won’t be too daring to think,

Mike Giambattista:

You know, because it’s, it’s really easy to, to, to take a conservative approach and you know, baby steps and crawl, walk and run, but maybe based on things that you see where you are, sometimes a more aggressive approach is warranted. I just wondered if something like that shows up in your world.

Gustavo Wille:

Yeah. So if I rephrase to like, this is my knowing what I know now Yes. Versus more brand new, what are the first questions that would be asking that company?

Mike Giambattista:

Yes. Yes.

Gustavo Wille:

Gotcha. First thing I’ll be, I’ll be, I’ll be asking is how is your relationship with your customers? Do you have any sort of reward mechanism? Are you saying thank you for your customers? Are you making them know that you appreciate them? Right? And then from there, start thinking, okay, what are the experience that you give to the customer? Are you thinking about their point of view in the mix or not? 

And those are, I think, to me, those are part of a starting points to think about that more holistic view, right? Cause you, you know, very well that some, some areas in the market, it’s all about acquisition. Some it will change between areas. And I think some of those focus, some of the questions are not asked. And that’s where you miss some of the, the, the, the results. And I think the example that you gave of the person that you said that, oh yeah, we can look at every point of data, but we couldn’t figure out, you know, the value that creates it. Cuz you didn’t start with the question and start to the, to that, you know, that, that perspective.

Mike Giambattista:

No, I just, I wanted to hear that from, from you because you know, you’re right. A lot of these, these conversations likely start further down the, the discussion road. You know, here’s what we need, here’s what we want. And you know, maybe the better way to approach the initial phases of those things is just to ask what do you already know and how are you interacting with them? And then start def devising what the most effective pathways are.

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