The Value of Self-Reported Interests: A Preference Center Story

“Simple is the new sexy,” proclaims a recent Harvard Business Review blog post from Kaiser Fung, author and a statistician for Vimeo. Fung is talking about the woefully unimpressive results he sees from the use of predictive marketing analytics to create more personalized experiences.

He’s got a point. The models to utilize predictive analytics are complex, hard to build, and even harder to optimize. “Easy wins aren’t sexy enough for data scientists. And maybe they fear their effort would go unnoticed if we can get better personalization without teams of PhD’s spending three years to create hundreds of algorithms,” he says, referring to the well-known Netflix contest to build a predictive model for movie preferences, which he says took a team of seven scientists three years to build using hundreds of algorithms and was eventually scrapped because it was too complex to put in production.

The simplicity angle comes from using what Fung calls “invariable” data points – my shoe size, my ZIP code, my bank, my recent purchases, or my local airport. These elements can be used to improve customer experience and up-selling, but do not require massively complicated analytics. More marketers should use them to improve the customer experience. They are so simple, they sometimes get overlooked or neglected.

A similar situation arose this past week. We were debating the structure and rules of a new customer preference center. The discussion was getting heated and passionate and way out of control. Preference centers are an interesting breed – they have both a good name and a bad name, depending on your view and experience:

• Good name: Customer preference is a hallmark of every great customer-centric marketing program. Listen to your customers and they will lead you to marketing Elysian Fields. A working preference center is an essential imperative for success. It’s a “best practice.” An investment in a user-friendly preference center is always worthwhile.
• Bad name: Great in concept, preference centers are terrible in reality – for the simple reason that no one uses them or updates them. Despite the promise and power of choice and permission, consumers rarely fill in a preference center or update them once they become customers. Any investment here is wasted because the data is incomplete at best and outdated (and useless) at worst.

Personally, I think that preference centers are a little like permission – you should get it, but it’s only the starting point. Preference centers are also a great starting point – at certainly times in a customer journey. They are effective for people who want to adjust their interaction with a brand, and they are great for gaining permission at the start of a relationship. The best would be custom to not just your business, but to the life stage. So the view and options a customer sees at the beginning of the relationship are different from the view they see when they are mid-cycle or clicking on a link in an email footer. There could also be a different view when someone is looking to opt out completely.

If you collect data and promote the fact that you have a preference center, then you need to also use that data and respect customer choices. You can’t go back later and think, “Just for this one time, I’ll send this to everyone because they just might like it.” However, preferences are not your only source of customer desire and wants – their behavior and the predictive models you build are also great indicators of what might be valuable. So you don’t want to offer such sweeping choices on your preference center that prevent you from applying more recent behavioral data to your messaging. I’m aware of the irony of spending MORE to create a more responsive and customized preference center when you actually want it to be LESS restrictive on your offer strategy. Still, there you have it. If you are going to make any investment, make sure it’s worthwhile.

So if simple is sexy, then going with a preference center that is simpler would balance the need for customers to make choices, and for marketers to present new ideas and offerings. How can you do this? Of course it depends on your program, but consider many small options rather than broad options. Once someone opts out of a broad option, you may lose the ability to upsell them, even if their recent behavior indicates they may have interest. Another approach is to offer “downgrades” on frequency or more channel options (text, email, postal).

It’s easy to overthink a lot of things in marketing, and preference centers are at the top of the list. Focus on customer experience, your commitment to notice, choice, and transparency, and to life stage value, and you will simplify the options, and deliver a stronger customer experience.

What is your preference center story? Please debate in the comments below.

Image via Shutterstock.