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Avoid Creeping Out Your Customers With Respectful Personalization Taking customization too far will hurt your bottom line.

By Richard Sharp Edited by Dan Bova

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Online engagement has matured beyond basic traffic acquisition. Personalization technology has improved and every e-commerce business is trying desperately to reduce the shopping cart abandonment rates that plague the industry.

Brands must tread lightly. They can no longer treat online customers as a mass of faceless traffic, measured only by clicks and conversions. When brands bombard visitors with intrusive, overly personal, tailored, individualized offers and information, they often conveys a level of creepiness that customers would rather do without.

Done properly, personalization helps you build lasting relationships with your visitors by delivering exceptional customer experiences. In the short-term, personalization improves conversion rates by 5.5 times when customers click a personalized recommendation. In the long-term, the improvement in customer experience increases loyalty; growing customer lifetime loyality and revenue in the process.

If personalization is poorly executed, basic psychological reactions kick in and customers reject the notion of being involuntarily monitored, or feeling as if their choices are being eliminated or restricted.

Therein lies the paradox. Brands understand that customers now expect the same kind of service they get in a high-end store -- a one-on-one, personalized experience shaped to fit their immediate goals and desires. However, what they don't always understand is that customers also want enough distance so they don't feel that their privacy is invaded. How do you know when you're taking it too far? When you're using technology and techniques that de-humanize the very people you're trying to reach.

Related: Want Loyal Customers? Do This.

Stage One: Personalization gets creepy,

We've all experienced the uncomfortable feeling of being followed. Online, with an overly aggressive display and social retargeting, it's become an all too common sensation. For most of us this "brand stalking' is more of an annoyance than a genuinely upsetting experience. It's even something at which we poke fun. While amusing at times, this kind of targeting is providing a negative digital experience; one that in some cases goes beyond annoying to genuinely distressing. For example, in one case, after seeing retargeted ads for a diet service she had visited online, a consumer said: "They are still following me around, and it makes me feel fat." Worryingly, timing and the resulting negative sentiment, was likely intended. Marketing firms have already been caught targeting women with beauty ads when they're at their most vulnerable.

Creepy unregulated machine learning is also becoming increasingly commonplace, with companies using data from across the Web and social media to determine customer interest rates and credit scores. This kind of data-led discrimination, with algorithms discerning unfavorably between race, sex and wealth, raises new moral questions for the Internet age and demonstrates how some brands take targeting too far.

When considering personalization, it's sometimes helpful to think of your brand as a person. Indeed, the strongest brands often conjure up a set of expected personality traits and behaviors. As an individual, you're not likely looking to be remembered for discriminatory or predatory practices; likewise your brand should carefully consider the impact of its actions.

Stage Two: Your creepiness costs you.

Digital creepiness occurs when personalization and targeting go too far and become invasive or manipulative either by triggering on information that's too personal, or by appearing in contexts that are too private.

The cost of creepiness is directly measurable.

Creepiness does not just affect brands' reputations, but their bottom lines as well. In her 2014 Ph.D thesis at UNC Chapel Hill, Lisa Barnard showed that feelings of creepiness caused by behavioral ad retargeting led to a 5% reduction in purchase intent.

Barnard's study also explained the psychological basis for this effect, showing that feelings of creepiness are linked to a well-studied phenomenon called reactance. This causes people to behave in exactly the opposite way than their perceived manipulator intended. In this case, that means deliberately not purchasing.

Not unlike a relentless suitor, customers may view creepy brands as something with which to avoid contact -- driving down click and open rates, and ultimately, lifetime value. Depressed campaign performance, near term, coupled with negative brand perception, long term, could mean dismal prospects for a company hoping to grow.

Related: How Mass Customization Is Delivering on Its Long-Promised Rewards

Three: Take a 'no creep' oath.

All is not lost, though, personalization certainly has its place. A study by White, Zahay, Thorbjørnsen, Shavitt (Marketing Letters, Volume 19, Issue 1, pp 39-50. Springer Verlag. March 2008) revealed that brands can mitigate the cost of creepiness through utility and justification. Essentially, if a personalized offer is justifiably relevant to an individual and provides them with a clear benefit, they are less likely to exhibit reactance, and hence more likely to purchase. So, being useful and relevant is essential. But, so is knowing that everyone has a different threshold, and understanding that threshold is the difference between success and failure.

Every brand selling online should be considering what is rational, reasonable and ethical before they make an offer, send an ad or push a communication to a site visitor. Only by instilling a code of decency that allows for personalization while also self-regulating against any discriminatory or harassing behavior, can the real power of online transactions and communications be realized.

1. Use personal information to offer choices, not restrict them.

Psychological reactance occurs when people feel their behavioral freedoms have been removed. Therefore, avoid overtly pushing people towards a single outcome (e.g. overly aggressive retargeting). Use personalization to offer more choices instead. I find that targeting visitors as they exit your site is a powerful time to introduce new options.

2. Emphasize the benefits when requesting or using personal data.

Research shows that people are less likely to engage in psychological reactance when they're getting something valuable in return for use of their personal information. Making the benefits clear is a simple way to reduce the cost of creepiness while increasing revenue.

Related: Gaining Customers' Trust Can Be Your Checkmate

3. Don't treat everyone the same way.

Studies tell us that different people find different things creepy and have varying attitudes towards sharing personal information online. Some users might want to provide personal information to get a more tailored experience; others may prefer not to provide their data and get a more generic experience. Offer both.

It's common sense, really; building customer relationships isn't all that different from building personal ones. Being genuinely helpful is usually the best path forward. Avoiding scary, discriminatory or repressive practices shouldn't be optional; rather, above-board, values-centric customer marketing should be a core part of your business engagement rules, which should be clearly communicated company-wide.

Richard Sharp

CTO, Yieldify

Richard Sharp is the CTO of Yieldify. He joined Yieldify from Google where he lead the global product team responsible for banking comparison products. Previous to Google, Richard worked as a Senior Research Scientist for Intel before joining XenSource – a start-up formed from the University of Cambridge Computer Lab that was acquired by Citrix.

He has a PhD from the University of Cambridge and currently also works as Director of Studies for Computer Science and Fellow at the University of Cambridge.

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