Customers want personalization without the uncanny valley. - guest blog by Jonas Berggren

Imagine walking into your favorite coffee shop, and the barista greets you by name and starts making your usual order before you even ask. That feels good, right? But what if you started receiving ads for a new shoe brand just minutes after casually mentioning them to a friend? That might make you pause. This is the personalization dilemma – customers crave a tailored experience, but they don't want to feel like they're being watched every second.

Companies possess mountains of data on our habits, and using that information wisely is key. Done well, personalization strengthens customer relationships. Done poorly, it ventures into the "uncanny valley" – that unsettling feeling when something tries too hard to feel human or overly familiar. The search results that Google returns will take into account your previous search history - so nobody will see exactly the same search results. Your homepage on Netflix reflects the shows you are watching now and similar shows that you might enjoy.

We see some of the services around us trying to define their service in a very personal way by using the data they have on our history. Why does it not happen more often?

Balancing: Privacy and Personalization

Regulation: The European Union General Data Protection Regulation (GDPR) is an important component of privacy law across Europe. GDPR gives the consumer more control over how their data is stored and used by companies, but we are now a few years into the enforcement of these rules - most companies in Europe will now be aware of what they need to do to remain compliant. The EU has already issued 648 penalties to companies that broke the rules.

Regulations like the EU's General Data Protection Regulation (GDPR) set the ground rules for using customer data. It become a template for data protection and privacy in many other countries and states around the world including California, the UK, Turkey, Mauritius, Chile, Japan, Brazil, South Korea, South Africa, Argentina and Kenya.

But within those rules, companies must find their own balance. Overly personalized chatbots pretending to be your friend or suspiciously targeted ads can alienate customers. On the other hand, remembering your preferences and offering relevant suggestions usually goes over well.

Customer comfort: Despite these comprehensive rules, it is probably point two that concerns most people today. It just makes us feel uneasy when companies appear to know too much about what we want or what we are doing.

Have you ever been talking to a friend at a party where they recommend a new company or service to you? It’s a company that you have never heard of, you have never searched for them on Google, and you are not following any of their social media, but as soon as you get home from the party, you start seeing adverts for that company on your phone?

That feels odd. Are our electronic devices listening to us as well as logging everything we search for? Analysts call this the uncanny valley - this term originated to describe the weird feeling when a robot looks and feels almost human, but it can apply to a company that tries to behave like it is your friend.

Experts say no, these companies are not listening in, but the devices may well be using the proximity of you to your friend to recommend some of the services they are using. It does feel strange though.

We want companies to offer us a personal service, but not to the extent that it feels they are monitoring us. This might seem like a difficult balancing act, but in most cases, it shouldn’t be difficult - just make the experience smooth and friction-free, and the customer will generally appreciate it.

So, how do companies personalize without crossing that line into creepy? Here are a few key ideas:

• Address the 'pain points' where customers get frustrated. Make things fast and easy – that adds value customers appreciate.
   
• Transparency: tell customers how their data is used. Give them options to opt into different levels of personalization.
   
• Focus on Genuine Interactions: personalization should enhance the experience, not try to replace genuine human connection.
   
• Get Feedback: don't assume you know what customers want in terms of personalization. Regularly ask for their input.

For example, use the customer's name when sending a message, advise them on products they might be interested in, and create special offers based on their shopping history. All this helps to create a stronger bond, and although you are using the customer’s personal data, it doesn’t feel odd.

There are many ways that it can feel strange to over-use customer data, though. A chatbot with a human name that pretends to be human and keeps addressing you by your name can be irritating. In fact, anything that is not really a genuine interaction can feel odd.

Rules and regulations control the overall mechanics of how customer data can be used, but each company needs to decide exactly how to create a personalized experience without it feeling strange to the customer. This will depend on the type of service, but it is worth planning ahead and talking to customers to explore what they want and prefer before suddenly overusing their data