The 2020 Personalization Manifesto
Gartner recently predicted 80% of marketers who have invested in personalization will abandon their efforts by 2025 due to lack of ROI, the perils of customer data or both. 27% of marketers believe data is the key obstacle to personalization — revealing their weaknesses in data collection, integration and protection. Before you prepare to walk away, here is some advice from the front line of personalization success.
1. Personalization Is Worth It
The direct marketers among us have consistently achieved higher conversion rates from a more tailored approach, compared to one size fits all. CMOs believe that a more personalized approach leads to deeper relationships with customers, higher conversion rates, and increased sales - well beyond direct marketing channels. They believe personalization will serve as a defense strategy if they are competing against the likes of Amazon or other direct-to-consumer brands. In an environment where marketing investments are being questioned in a slow-growth US market, personalization is seen as an appropriate response to greater accountability for that investment.
The case for personalization is especially clear for brands that thrive on a passionate audience, where there are high levels of engagement. Brands like Warby Parker, YETI, Adidas, and Apple rely on customer loyalty and omnichannel content experiences to drive ongoing engagement.
In spite of Gartner’s warnings, CMOs view personalization, and the benefit of creating a better relationship with prospects and customers, as a strategic point of difference, and one to be pursued.
2. The Business Case for Relevance
Increased relevance through personalization improves engagement and conversion rates. Because the right people are seeing the right message. OneSpot’s assignments across financial services, retail, BTB and CPG have consistently shown this improvement. According to Forbes, 83% of marketers are reporting that they are exceeding their revenue goals as a result of using personalization techniques. For email alone, Experian reports that personalized emails deliver 6x higher transaction rates. Personalized content and product recommendations, especially when displayed to the right consumer at the right time, also drives impulse buys: 49% of customers reported they have purchased items they did not intend to purchase because of personalized recommendations from a brand. Finally, one of the earlier returns on moving to personalization is the associated benefits of automation and cost reduction. Because machine learning dramatically reduces time spent on content decisioning and campaign management. These savings alone can fund your personalization efforts.
3. How to Move Forward: Map the Personalization Journey
In the same way you think about mapping your customer journey, roadmap your approach to personalization.
- You will need to build and maintain a large, owned and addressable audience.
- You will need to invest in technology, content, people, and processes to create a new way of working to deliver personalization and ultimately a more relevant experience for your customers.
- Content operations will need to grow to meet the needs of customer segments or individuals. There are only a few external agency partners who are ready to help. That explains why many marketers are now building their in-house content teams.
- Prioritize which audiences to focus on, likely your most valuable prospects and customers. Test your way through likely audiences. Ensure you are working shoulder to shoulder with your audience insights team.
- The ability to measure the ROI of personalization is hard because of challenges attributing sales to digital behavior. Existing methods are either incomplete or expensive. As a first step in measuring the ROI of personalization, take an incremental approach by proving the ROI of personalization in digital advertising, measuring increases in engagement, or focusing on building loyalty programs that can measure cross-selling across a portfolio of products.
- On technology, there are a plethora of options, and many claim to be the panacea to marketers’ personalization needs. Each vendor uses different terminology and claims to work either broadly or at a point in the personalization spectrum, which is a spectrum that marketers do not yet understand. There appears to be a lot of over sell and over promise, and all vendors say they “do everything.” It’s a recipe for disappointment or paralysis. CMOs need personalization expertise that they can trust. This will likely come from external partners to start with, but over time they should bring the expertise in house.
The realists understand this is a multi-year journey, at least 3 years, and it will take many phases of designing, building, and scaling to find success. Personalization is not a project. The realists also need to convince internal naysayers who believe that personalization may not work because of its expense and complexity, and that scale may be hard to achieve.
4. Pragmatism Rules
Ensure KPIs are well defined, agreed, each with a measurement plan.
Start with a segment approach and then move to more individualized efforts.
Focus on specific parts of the customer journey to find your success. Prioritize the opportunities carefully and build up successful use cases. Do not go too broad and ambitious at an early stage.
Super charge collaboration efforts with cross-functional teams to align personalization efforts and increase momentum. Collaboration around personalization efforts leads to increased knowledge, business impact and ROI.
5. Brand Saliency on Individual Needs
Successful personalization comes from meeting the individual needs of each member of your audience. The more targeted you become, the greater the increase in engagement and conversion. There will come a point where you reach a breakeven point because of the cost of personalization. At this point, you should re-evaluate your brand strategy and brand saliency to ensure both your brand and personalization strategies are supporting one other and allow each discipline to be a winner.