Why Your Organization Needs a Personalization Strategy

Personalization continues to be top priority for marketing leaders globally. Despite investing 14% of their marketing spend on personalization, 61% of marketing leaders report seeing ambiguous or no positive returns from their personalization initiatives. Sixty percent of marketing leaders also report that they do not have an effective personalization strategy and roadmap (see figure below).

This is concerning because our research indicates that organizations with a personalization strategy and/or a roadmap are more likely than their peers to experience moderate to significant positive returns from personalization efforts. Marketing leaders who continue to pursue personalization on an ad hoc basis are simply increasing the risk that their organization will see limited or poor returns from these efforts and investments.

Some of the common questions that we hear from our clients in this domain include:

• How do you align your personalization efforts to a broader business strategy?
• How do more mature clients sequence their personalization journey?
• What are key sequential building blocks for a high-returns personalization strategy?

As we investigated key reasons that prevent marketing leaders from building an effective personalization strategy, we found that marketing leaders often fail to adopt a “customer-first” mindset when thinking about personalization. While most marketing leaders claim that their personalization strategy is customer-centric, the reality is quite different.  Gartner’s research “Rethinking Personalization for Maximum Impact” indicates that the vast majority of personalization efforts pursued by brands today is not the type of personalization valued by customers. While some marketing leaders now align their personalization strategy with their business objectives, they still fail to think about the overarching customer objectives or outcomes they need to enable to achieve those goals. Not only this but when it comes to measuring the impact of personalization, the most commonly used metrics are commercial such as conversion rates, average order value etc. Marketing leaders rarely measure the impact of their personalization efforts on customer experience and engagement.

In order to build a high-returns personalization strategy marketing leaders need to start by answering some strategic questions such as:

• Why do you need personalization?
• What will be the impact on customer experience and engagement?
• How should you sequence your projects?

They also need to be able to prioritize effectively to identify focus areas, audiences and channels that would benefit most from their personalization efforts. Finally, a high-returns personalization strategy involves extensive test-and-learn experimentation to truly understand the specific type of help and guidance that customers need and expect from the brand.

Marketing leaders can review our recommended resources on personalization strategy below (a Gartner for Marketing Leaders’ subscription is required to access full reports):

• Building a High-Returns Personalization Strategy
• Key Tactics to Improve Email Personalization
• Personalizing the Consumer Website Experience
• Assess Three Strategic Use Cases for Personalization
• Magic Quadrant for Personalization Engines