Truth, Lies, and Personalization: What Keeps CMOs Up at Night

There has been a significant uptick in marketers’ efforts to prepare and deliver more personalized messages and experiences across all channels. Forrester reports that 91% of marketers have included personalization on their 2019 roadmap.

In interviews with 10 leading chief marketing officers (CMOs), OneSpot was able to better understand the reasons why marketers are taking this path, the capabilities they desire, and the challenges they face.

Why Are CMOs Pursuing Personalization?

CMOs believe that a more personalized approach will lead to deeper relationships with customers, higher conversion rates, and increased sales. They also 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.

Companies who work directly with customers see personalization more as “business as usual.” Companies who work through wholesalers or retailers see personalization as innovation.

All companies 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.

In our conversations with CMOs, the most sophisticated ones understood that personalization would allow for a much richer understanding of their customer segments. Segments will proliferate, uncovering which are your friends, and which are your acquaintances and friends of friends. They also understand that the benefits will transcend marketing and be a critical input into product development and supply chain management.

What Do CMOs Need to Succeed with Personalization?

All the CMOs agreed that they need to build and maintain a large owned and addressable audience. The hunger for first-party data was clear; the understanding of what it really takes to achieve personalization was less clear. In some cases, CMOs were taking a leap of faith to get started.

They understand that investment is needed in technology, content, people, processes, and even employee incentive programs to create a new way of working to deliver personalization and ultimately a more relevant experience for their customers.

To start, they will likely be pursuing personalization against their most valuable prospects and customers. They expect returns to be quicker and to be able to build confidence internally for personalization.

Challenges to Overcome

CMOs agreed that there are many personalization challenges across infrastructure, resources, regulatory, content, processes, and the ability to measure ROI. The need for technology infrastructure is clear and scary for those companies who have traditionally not had to manage customer relationships directly.

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.

There was a shared understanding that content operations would need to grow to meet the different needs of customer segments or individuals, and that there are few external agency partners who are ready to help. That explains why many marketers are now building and growing their in-house content creation teams.

Among brands that don’t sell directly to consumers, 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, some are taking 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.

And on technical vendors, there appears to be a credibility problem. Partly because there are many vendors who are claiming to be the panacea to marketers’ personalization needs. Each vendor used 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.

For global companies, the different regulatory frameworks around data and personalization create a layer of complexity that needs attention and understanding, with the growing risk that US marketers get limited or restricted first-party data.

The Path Forward

The ingredients for a successful approach to personalization include a clear business case for investment, a well-defined roadmap over the long term, a team of dedicated experts both internal and external to make it happen, and a simpler technology infrastructure, likely leading to a consolidated group of critical technology partners.

Are you ready to take a deeper look at personalization for your brand? OneSpot’s Strategic Services team helps Fortune 500 brands establish highly effective strategies around personalization and content, with quantifiable approaches across people, processes and platforms.