Successful personalization at scale requires four elements working in tandem. Here’s how marketing leaders build the operating model to make that happen.

Personalization is ready for its closeup moment. Technology and customer expectations are converging to propel personalization—the process of using data to customize the timing, content, and design of every experience in real time—from a promise to a reality.


Personalization at scale can drive between 5 and 15 percent revenue growth for companies in the retail, travel, entertainment, telecom, and financial-services sectors. One global retailer, for instance, saw sales from its brand-owned stores triple in just a year thanks to a successful personalization initiative.

For this reason, more than 90 percent of retailers say personalization is a top priority. But only 15 percent of these companies believe they are actually doing a good job at it.1 Consumers who have been stalked by irrelevant ads or bombarded with outdated offers would agree.

While many companies have scored a few modest successes with their personalization experiments and initiatives, few know how to do it on a large and consistent scale across all channels.  Most companies focus exclusively on data, analytics, and agile, while investing very little in the necessary organizational and operational rewiring of how people work. Personalization is still treated like a nice add-on to a company’s existing marketing function.

We believe, however, that driving substantial and sustainable growth through personalization requires embedding it into the marketing operating model. To do this, companies must move beyond the initial excitement of “one-to-one marketing” and into the low-thrill but crucially important realm of organizational change.

What is the personalization operating model?

An operating model driven by personalization requires four elements to work together effectively:

  1. Data foundation: Building a rich, 360-degree view of customers in real time
  2. Decisioning: Mining data to identify and act on signals along the consumer journey
  3. Design: Crafting the right offers, messages, and experiences at speed
  4. Distribution: Delivering and measuring these experiences across platforms and feeding new insights into the data foundation

The real source of value in this operating model is how each element interacts with the others. Insights from the data allow the business to know how to design offers in response to customer signals. The more this operating model works, the more it improves by continually feeding more data into the model and refining its activities.

While each of these individual elements has been well chronicled, none is particularly effective in isolation. Only by developing and deploying an integrated personalization operating model that enables a faster and more effective way of working can businesses hope to capture their full growth potential.

How to develop your personalization operating model

Building a personalization operating model requires business leaders to invest in six foundational elements: processes, tools and tech, governance, KPIs, talent, and leadership (exhibit). Implementing and embedding these elements is complex, requiring dedicated commitment, focus, and problem solving. We want to isolate a few of the most common pitfalls that cause companies to falter and suggest solutions for how to address them.

Critical enablers for embedding the personalization operating model

1. Process: Commit fully

What can go wrong: Not long ago, the CEO and CMO of a travel company decided to make a big push into personalization. Despite selecting a strong group of seven people and working in an agile way, they had little to show after six weeks. The problem was that the selected employees weren’t working in the same place and, after attending the daily stand-ups, were going back to their normal jobs.

Solution: Since an agile working team is the core component of a personalization program, it’s essential to get it right. At the most basic level, this means assigning a small group of carefully selected people—including a campaign manager and staff from creative, digital media, analytics, operations, and IT—to be full-time members of each agile team. Personalization is going to fail if it’s a side job. Unified around a shared goal, the team also needs authority and stature to succeed. Process improvements should include:

  • Giving decision-making rights to the team and empowering them with critical resources, such as a promotional budget
  • Staffing the team of 8 to 15—no more than can be fed by two pizzas—with “doers” not managers
  • Colocating team members so they can work side by side all day
  • Appointing a team leader who helps everyone work toward a shared vision and goals
  • Developing new service-level agreements (SLAs) with internal and external departments, partners and vendors to make sure they can match the timelines of the agile team

The travel company colocated its personalization team members and removed many of their other responsibilities. In addition, it gave the team immediate access to creative-design resources from the marketing department (through new SLAs), speeding up the creation and testing of new marketing campaigns. As a result, the number of pilots launched in a given month more than tripled.

2. Governance: Be clear about boundaries and decision rights

What can go wrong: A global telecom provider recently put a personalization team in an agile “war room” only to find out that business-as-usual (BAU) channel functions, such as e-commerce, were launching conflicting tests. Without clear boundaries, decision rights, and responsibilities, creating personalization teams can result in unexpected clashes with other parts of the business.

Solution: A control-tower function is needed to manage the inevitable collisions between multiple agile teams and BAU groups. This new function is run by a manager and a small staff of people who have responsibility for tracking, anticipating and solving problems, and maintaining a centralized testing pipeline with common prioritization logic. They are also responsible for navigating and facilitating the very real organizational and political conflicts that arise from having multiple cross-functional teams within a legacy organization.

In practice, that means developing agreements with legacy groups on testing and release protocols, meeting regularly with affected functions to maintain good relations, and being transparent through regular communications to breed trust.

3. Tools and tech: Give people new shoes so they can run faster

What can go wrong: A consumer-goods company started its personalization transformation the right way. Management had aligned on the strategy, defined the consumer priorities it wanted to execute on, and committed the right set of doers and leaders to drive the change. The first pilots launched rapidly, but not long after, the scaling up of successful pilots stalled. The IT department had promised a new set of tools that would enable a perfect 360-degree view of the consumer, the creation of campaigns across channels with few easy clicks, and a fully automated decisioning engine to reduce manual list-pull work and targeting frictions. When this didn’t happen on time, the agile team was forced to measure campaign performance manually, which often didn’t generate results until 7 to 12 days after a campaign was completed.

Solution: Numerous off-the-shelf tools exist to help the process of personalization run with the numerical precision of a finance department. “We now see marketers use experience templates created by their agile development teams and user experience  designers to shorten the loop between idea, launch, and measurement from months to days, and even sometimes hours,” says Liad Agmon, CEO of Dynamic Yield, a leading-edge decisioning-engine platform that delivers cross-channel personalization.

Automating list pulls, enabling versioning with dynamic templates, and creating easily searchable creative-asset libraries can reduce daily frictions while real-time measurement capabilities accelerate testing and learning. At the core of the personalization tech is a centralized decisioning engine, or “brain,” that is capable of interacting with each outlying system to consistently make real-time decisions based on consumer signals. This technology can coordinate content offers across audiences and channels in real time and help teams adjust them based on feedback.

In addition, companies are investing in customer-data platforms to unlock the data trapped in multiple silos. These investments have the additional benefit of freeing up teams from low-value activities so they can focus more on developing great customer experiences.

4. Key performance indicators (KPIs): Focus on both small and big outcomes

What can go wrong: The personalization team at a national retailer quickly developed a set of personalized triggers targeting customers during key moments when it seemed there was a strong intent to make a purchase. The campaign was successful and drove incremental sales. But subsequent campaigns drove limited value because the team either couldn’t agree on its focus or tried overly broad targets that led to multiple conflicting initiatives.

Solution: Personalization teams need a single, shared goal focused on solving a specific consumer challenge, such as the acquisition of an under-represented consumer segment like millennials, a boost in cross-selling, or improved engagement with new customers in their first 30 days. Without these kinds of strategic, consumer-centric KPIs, teams will fail because, without a shared purpose, they will focus on too many customer segments and moments in the journey.


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