One of the major themes that I see driving Internet of People and Things, and commerce in general, is ultra-personalization. Although not recognized widely as such, one of the “killer apps” that has emerged beginning with graphical OS’s is “themes” or “skins.” Simply put, the OS exposes not merely the knobs and dials, but the size, shape and texture of the knobs and dials. Not just audible and visual event notifications, but the sound, look and behavior of those notifications. This was never recognized for the significance it has had in shaping customer expectations about responsiveness of products. In fact though, as things get smarter and computing recedes invisibly into the fabric of life, there is no single killer app. Ultra-personalization is the killer app.
What began as a software feature, soon spread to physical goods. Witness the sneakers where you specify the colors of the core components and accent pieces. Bicycles that are tailor-made en masse. Cars that remember individual drivers’ preferences. Manufacturers call it “mass customization” and if they don’t adopt it in greater numbers, 3D printing may marginalize some commodity hard goods markets. It isn’t necessarily about unique, one-of-a-kind goods. But it is definitely about the ability to choose, tweak and tinker.
Give the consumer abundant capability to fine-tune a product’s look, feel and behavior and they will adjust the dissatisfaction right out of it.
But as consumers, we don’t want personalization to stop at the faceplate of the device. Cars are smart but you don’t see most of that. So performance enthusiasts replace the software in order to expose all the virtual knobs and dials. Lights, switches and outlets are dumb, but “smart” versions aren’t selling as predicted because turning your phone into a proxy for a wall switch isn’t “smart.” Compared to what we were promised, it barely qualifies as learning disabled. What we want with IoT, and just about everything else, is to be able to configure device settings and tailor the behavior to us in the same way that you can change your mouse pointer to a wand, a candle, a sword, a pen, a cartoon hand, or even a middle-finger salute if that floats your boat.
Ultra-customization is the new way in which we demonstrate personal significance in the world. This isn’t just mine, it is uniquely mine in a way that makes my friends say “That’s awesome! I want that!”
If any of this is making sense then I’d like to refer you briefly to the “uncanny valley” effect. Please bear with me, it will make sense in a moment. Hypothetically, take a series of humanoid figures and arrange them on a scale of 0 (obviously not human) to 100 (perfect replica) and graph the comfort level of observers. The graph has a valley where comfort turns to revulsion when the figure looks almost but not quite human. Got it? OK, back to advertising. Were we talking about advertising? Believe it or not, yes.
It isn’t ultra-personalization if someone else makes the choice, no matter how good the choice is.
In fact, someone (or something) else can never replicate the choice you yourself would make. Therefore, past a certain point the more accurate the choice made for you by personalized advertising, the deeper you go into uncanny valley territory. We’ve long since crossed that threshold on the web. Doing it in DVRs, in-game ads, set-top boxes and augmented reality, won’t make the situation better. It will make it worse. And if the tech is good, the uncanny valley effect will become much, MUCH worse.
The better personalized ad tech gets, the more we’ll hate it – unless it’s us doing the personalization, in which case we’ll love it.
“But wait,” I hear you saying. “Look all those ad platforms that do let you do the personalization. Don’t those qualify?” No. And I’ll tell you why. It isn’t user choice if the user doesn’t have the choice to not participate. I personally “opt-out” of most advertising by drastically limiting my television watching and eliminating radio listening altogether. Yet I do consume advertising. voluntarily. I go watch the Superbowl ads on YouTube because they usually have compelling content. There are several ads that my wife and I do not fast forward through on the DVR. (Names withheld to protect the guilty pleasure.) Given the opportunity to opt-out entirely, my wife and I voluntarily opt-in for ads that are compelling in any of a variety of ways. We value humor in an ad, but we also value accountability, integrity and good old utility. The reverse is also true. The kiss of death for us with a TV series is if the DVR controls are restricted and we are forced to watch it in real time, ads and all. No matter how good the show, it’s off our list. My friends lament “but you’re missing out!” On the show? Yes. On dignity, self determination and self respect? Not at all.
The ability to opt out is the foundation of choice. Without that, even the most granular of personalization systems is meaningless.
I’ve framed this in a discussion of the relationship between the individual and the advertiser. But it is really about the relationship between the individual and the providers of goods and services who the advertisers represent. What the advertisers deliver isn’t “us.” It isn’t bodies on couches, or eyeballs and ears as mere conduits to wallets. Nor is it even our attention. Delivering attention barely qualifies as marketing anymore. No, what advertisers deliver is engagement. Providers don’t just want your money. They want fans. They want people who are excited about the brand and help spread the word. They want reserves of loyalty so that if there’s some negative event the company can weather the storm of public opinion and come out the other side intact. They want us to perceive them as valuable and a crucial part of our daily life.
Ultra-personalization and mass-customization have so permeated life that they have become a primary evaluation criteria not just of goods and services, but of relationships.
The final frontier of ultra-personalization is the relationship with the provider. My bank lets me design my credit card. As long as I don’t put something distasteful on there, I can use any photo or graphic image I want. They also let me pick which day of the month, both in absolute terms (the 5th) and relative terms (2nd Tuesday), on which a payment will fall. Once you have that level of personalization, banks that fail to offer these options hardly stand a chance of enticing you to switch. Some insurance companies allow you to earn and save a free pass which can be exchanged for forgiveness of minor infractions or fender-bender accidents. Once you’ve earned that pass, how much lower would a competitor’s rate need to be to get you to switch? Turns out a lot. It isn’t so much the pass itself to which people respond but rather their ability to personalize the contract in a way that is favorable to them and at a time when they need it most.
Although these are good, they are rather early and primitive examples of ultra-personalization of the buyer-seller relationship. Imagine every buyer with a miniature version of the same software used by sellers. Picture the individual with their own supply chain management system, their own computerized accounting, integrated home automation, and even their own online API. These things revolutionized the supply side of commerce. Building out the same capabilities on the demand side will result in at least as much impact, likely more. Much more.
VRM is the road out of the uncanny valley.
Vendor Relationship Management (VRM) is the umbrella under which the consumer-side commerce software revolution is taking place. Although the name evokes a parallel with Customer Relationship Management systems (CRM), I see it as a much broader scope. Just as CRM is only one small part of the total enterprise software suite, the customer side needs much more than management of vendor relationships. That said, there’s a lot of value just in that narrow the scope of managing vendor relationships. First and foremost among these is to give to the consumer the ability to make their own choices about how to interact with their vendors. Including ads of course, but as many other aspects as possible. Trying to achieve perfect simulation of what the user would choose is doomed to failure. That road leads only deeper into the uncanny valley. Instead, give the consumer the controls and let them make their own choices. Drop the boiler-plate adhesive contracts and one-size-fits-most-and-we-don’t-care-about-the-rest approach to markets. There are no collective markets anymore. There are only individuals who want nothing more than to be treated as such, and with some of the respect that’s been missing from the relationship. Empowering the customer with ultra-personalization of the relationship signals to them that they are significant. That their feelings and preferences as individuals matter. That they, personally, matter.
The VRM road leads out of the uncanny advertising valley and toward engagement, loyalty, and a long-term relationship based on mutual respect. Let me know if you need a guide.