In-house, outsource, or hybrid? How to build your personalization roadmap
Nicolas Algoedt
Feb 18, 2019
Nicolas Algoedt
Feb 18, 2019
Nicolas Algoedt
Feb 18, 2019
Nicolas Algoedt
Feb 18, 2019
Even if they’re not aware of it, consumers are constantly being served highly personalized experiences as they interact with their favorite brands across their devices.
And personalization is changing. These days, to quickly build and deliver the experiences that customers have come to expect – and which bring the biggest returns for your business – you need to be making use of AI and Machine Learning technologies: hello, data science!
Whether you’re looking to expand your current personalization program, or just getting started, one question will undoubtedly be at the forefront of your mind: “what resources do I need to be most effective in achieving my goals?”.
And this will, of course, be quickly followed by: “and how much is it going to cost?”.
You Need the Ideal Combination of Expertise and Technology
Understanding How Your Users Behaved in the Past is No Longer Enough
This is What a Dream Personalization Team Looks Like
Running a Fully In-House Personalization Team Doesn’t Come Cheap
The Opportunity Cost of Building an In-House Tech Stack (Annual Cost)
What Exactly is a Hybrid Solution?
How Can Insider’s Growth Management Platform Work for Your Business?
To remain competitive in today’s market, businesses need to move fast. Marketers want to turn their ideas into live user experiences as quickly as possible and start reaping the rewards. But there are many potential roadblocks along the way.
You probably already know that, in order to be effective, you need the ideal mix of expertise and technology, all powered by seamless processes. But how can you achieve this in-house with limited resources?
Ultimately it boils down to three options. A business can choose to:
In this blog post, we’re going to take a deep-dive into options one and three. We’ll look at what would be required to run an effective personalization program in-house, with no assistance from external technology or expertise, and we’ll also explore the ways in which a hybrid solution can work for businesses of different sizes.
But first, let’s take a quick look at the state of personalization today.
Personalization, in short, involves automatically delivering the most relevant experience to a particular user at exactly the right time, no matter what channel. A user might be shown a particular piece of content, for example, or an offer or browsing experience that’s perfectly tailored to their needs or interests. This tailored experience is determined by data you’ve collected about them previously, such as on-site or in-app behavior, or – and this is the really exciting part – by using AI-backed predictive technologies.
In the past, the data that you could use to inform your personalization activities were restricted to that which could be collected when a user interacted with your website or app directly. Now, the sources of information that can be used to drive personalization are numerous. We can track users’ behavior across multiple devices, determine what kind of content they like, make intelligent offers based on their social media activity and even work with location and weather data. The possibilities are endless.
As the number of data sources we can use is changing rapidly, so too is the way that data is collected, mined and unified. No longer is personalization simply a case of using past behaviors to inform future activities via historical segmentation. Nowadays, sophisticated AI and Machine Learning algorithms power predictive technologies that enable businesses to deliver experiences to users in real-time, across a large range of channels. And these algorithms are constantly improving.
For a marketer who’s bursting with great ideas about how to engage their users, this can present a huge hurdle. To run personalization activities that will seriously impact your bottom line, you need to be at the cutting edge not only of your vertical but of data science, too. The complexity of the undertaking cannot be underestimated.
So, when considering the option of running a fully in-house personalization program, we can already see that data scientists – with the expertise to develop and implement AI-backed algorithms with Machine Learning technology – is a key piece of the puzzle. Let’s take a look at the other roles that make up the dream personalization team:
But what would it cost to run this dream team? Here’s an estimate of the annual budget required for a medium-sized business to run around three personalization activities per month:
This entails engaging your users on channels such as your website or app with mini-experiences such as coupons, offers, banners or floating carts, etc. Assuming you are just starting your personalization journey, around three to five personalizations per month would be a good target level to achieve. To do this you would, at a minimum, require an optimization consultant or someone who can look at your analytics, etc. to generate ideas for your website. In addition, you would also need a designer and a developer to bring your ideas to life. So we are easily talking about a cost of 250K USD per year.
To make your personalization effective you will need to make it contextual. This means you’ll need to know what products your visitors are looking at, for example, and gather user details such as how many times they’ve visited your website in the past month. Typically, this would require you to integrate your website and/or app with your own CMS/eCommerce platform, CRM system, marketing automation platform and/or your analytics platform. It is also important to create your own data layer to capture all the information about your users’ behavior. Assuming you integrate three platforms in a year and intend to build out your data layer for contextual personalization, you are looking at around 100K USD per year.
If you want to leverage the true potential of personalization, you will need to focus on the predicted future behavior of your visitors, and not just on their past behavior. So you’ll be thinking about models such as the likelihood to purchase, the predicted lifetime value of a user, and so forth. To build your own engine that can churn out predictive insights you will, at the minimum, need a data scientist and/or a back-end engineer who can model some insights for you. And you will need a system to aggregate and churn out these insights. This means you will be looking at costs of around 250K USD and upwards to get you started.
This is a very simplistic model that is based on an average mid-market business looking to personalize just one channel. If you are looking at expanding your footprint too, say, a mobile app, web push or messaging apps, you are easily looking at an opportunity cost greater than 1 Million USD/year.
You also need to take the “invisible” costs into consideration. Outside of the core work of creating and implementing personalized customer experiences, you will also need to keep your team running at maximum capacity. In a fast-changing landscape, that means:
Perhaps you’ve got this far and decided that this all seems perfectly doable in-house within your organization. Netflix manages it, after all. And so does Amazon. But if you’re not one of those technological behemoths, yet still want to enjoy all the competitive advantages that a robust personalization program can offer, fear not: there is an alternative route.
More and more businesses of all sizes are adopting a “hybrid” solution, augmenting their in-house capabilities with powerful personalization platforms and leveraging external expertise to drive the results they’re seeking.
The beauty of a hybrid solution is that it can be tailored perfectly to your business’s specific needs. Perhaps you already have a wealth of marketing and personalization experience in-house and are looking to enhance your personalization activities by introducing AI-backed predictive technologies. Or maybe you have a small team that knows their business inside out, but which lacks the expertise when it comes to developing and implementing basic personalization scenarios.
Whatever your situation, it helps to think of your personalization program like a puzzle. With a hybrid solution, you can identify the missing pieces and fill those gaps with the help of external expertise.
Although every business situation is unique, there’s one thing that all hybrid solutions have in common, and that is that they all rely on a sophisticated Growth Management Platform.
No matter what stage you’re at, Insider’s Growth Management Platform can help you take your personalization program to the next level.
If you’re at the beginning of your personalization journey, you can make use of Insider’s huge suite of out-of-the-box templates to kickstart your personalization activities. These include basic templates for coupons, banners, and pop-ups, as well as more advanced templates including triggers and gamified experiences.
If you’re part of a larger and/or more mature organization that’s looking to further expand its personalization program, Insider’s GMP can amplify your digital growth. With advanced customization possibilities and AI-backed Machine Learning technologies, Insider enables marketers to turn their ideas into live experiences with ease.
And this is all possible with:
A majority of marketing teams do not have the dedicated IT resources required to develop, design and deploy changes to their website or app. Without the help of a Growth Management Platform, this means that it’s often difficult – if not impossible – to turn personalization ideas into reality.
Insider puts the marketer firmly in control, making it simple to design and deploy personalization activities without needing to involve anyone from the IT department.
So we’ve established that introducing a Growth Management Platform to your martech stack will make personalization a whole lot easier. But, technology alone cannot deliver the maximum impact. To be most effective, you need to combine it with deep knowledge of both the vertical and proven industry best-practices for personalization.
Keeping an in-house team up-to-date with industry developments can be costly and time-consuming. But you don’t need to employ a small army and spend a fortune to keep up with the very latest industry trends.
As part of a hybrid solution, many businesses are choosing to tap into the expertise of external consultants to guide and augment their personalization programs, leveraging the knowledge of experts who live personalization every single day.
Insider’s Growth Consultants are a group of personalization and optimization experts who help businesses across all verticals accelerate their digital transformation and get the most out of our GMP. They help businesses with:
…and much more.
Our Growth Consultants are experts in their verticals, with years’ of experience working with a range of businesses that all share the same challenges. They are also fully up-to-date with developments and best practices in the personalization industry, and know Insider’s Growth Management Platform “inside out”.
You can access their expertise at a fraction of the cost of keeping an in-house team up to date, leaving you free to focus on your core business.
While it’s clear that using external services to drive your personalization program is a far more cost-effective and scalable option than running the entire show in-house, it doesn’t mean you’re necessarily ready to “hand over the controls” to someone outside your organization. The beauty is: you don’t have to.
With Insider, you are always in control. Our intuitive Growth Management Platform is designed with marketers in mind, so it’s straightforward for you to turn your ideas into reality and manage your personalization projects. Our team can provide as much (or as little) support as you need to get started and start getting results.
Furthermore, data privacy and security lie at the core of our technology and our culture. We are proudly 100% GDPR-compliant. You will always control how your data is collected and processed. Our technology provides a platform to leverage this data to its maximum potential in a responsible way.
If you’d like to know more, please refer to our security overview.
With Insider’s Growth Management Platform and consultancy services, you can save time and money you would’ve spent on training a personalization team, safe in the knowledge that all of the ideas are backed by data and not assumptions.
If this sounds like the solution to your personalization challenges, feel free to drop us a line and we can take it from there. You can also choose to request a demo for a detailed overview of our Growth Management Platform and all its capabilities.
Written by
Nicolas Algoedt
Nicolas is VP of Marketing EMEA at Insider. Passionate about new technologies and e-commerce, Nicolas has held various position at leading e-commerce and tech companies including Groupon, Microsoft and Bwin.
