Why Marketers Don’t Succeed at Personalization
Deloitte's most recent biannual survey of more than 300 CMOs found that an investment in the "right tech" is a top priority for driving organic revenue growth. Among available tactics, technology-driven efforts to drive personalization, or messages tailored to individual shoppers' preferences, have emerged as an essential strategy for growing companies.
Personalization has never been more important, especially as consumers are switching between online and offline channels, from their desktop computer to their smartphone and tablet and back again. Marketers must be able to deliver individualized experiences in real-time no matter when and how a consumer wants to interact.
Consumers expect marketing to be hyper-personalized to their individual interests and needs, and when it is, businesses have taken note, conversion rates improve by as much as 37 percent. We've done research based on hundreds of millions of first-party consumer engagements across every major marketing channel and a survey of nearly 900 digital marketers. It, also, mirrors McKinsey & Company's finding that "companies that grow faster get 40 percent more of their revenue from personalization as their slower-growing counterparts."
Personalization can address shoppers' objections, answer their questions, and stoke interest. With all these arguments in favor of personalization, why does our research also show that most marketers feel they don't have the resources or tech to be successful in 2024?
Here are three misconceptions about personalization and how to overcome them.
1. "Data privacy compliance and deprecation of cookies reduce the effectiveness of personalization."
This is probably the biggest misconception of personalization. While data from third-party cookies can provide clues on how to personalize a digital experience, you do not need that information to be effective. When a user arrives at your experience, you know their browser and device, and have a good idea of their location. For a wireless provider, that can prompt you to personalize the experience to show the latest deals to upgrade their phone and show data on 5G speeds in their area. You can also ask a quick question about why the user has arrived, and tailor the remaining experience accordingly. In our testing, this is very effective for conversion improvements.
2. "Personalization is costly because you have to create tens of thousands of micro-experiences."
Chances are, you can see meaningful gains from dozens of experiences. For B2B software, gleaning organization size, location and/or industry can allow you to customize and personalize a buying experience that gets double-digit gains in leads, calls, or outright sales. Focusing on the largest differences in your segments will have the biggest impact if the shopper receives cues that the product or service can be tailored to their needs.
3. "I don't have the requisite skills on my team to implement personalization this year."
If your marketing organization has a voice of the customer practice, and a test and learn mindset, you have the skills on your team to implement personalization. Voice of the customer will tell you the different reasons that someone will or won't buy your product or service and serves as the creative juice for personalizing experiences. Test and learn will allow you to critically think about how to achieve and realize gains more quickly.
As far as technology goes, you'll need a platform that can provide experiences that change based on data collected in the moment, such as ad campaign, browser, device, location, login data or answers to real-time questions. The platform will need to have "zones" for deploying customizable content and be able to report on A/B test effectiveness. The platform will need to have data hooks into all purchase outcomes, such as e-commerce, chat, telesales, and SMS.
A Final Word
As we head into 2024, 78 percent of marketers rank personalization as one of the most critical tools for improving customer engagement, acquisition, and retention. Yet 51 percent say there are hurdles. Challenge these assumptions using the arguments laid out above and supercharge your customer acquisition.
The views and opinions expressed are solely those of the contributor and do not necessarily reflect the official position of the ANA or imply endorsement from the ANA.
John Busby is CMO of Centerfield, which supercharges customer acquisition for leading residential service, insurance, e-commerce and B2B organizations. Connect with him via LinkedIn.