Blog post

Are marketers missing the mark when it comes to personalization?

By Jennifer Polk | May 21, 2015 | 0 Comments

digital marketing

Recently, I spoke on the topic of data-driven personalization at Gartner’s Digital Marketing Conference. Since I had a room full of marketers, I used the opportunity to conduct an informal poll on the level of personalization their companies are using or pursuing and how they thought personalization would impact their company’s high value customers.

Levels of personalization

The title of my presentation was, From Segments to Personas to People: The Path to Personalization, and I spoke about the process for personalizing marketing around the expectations of a particular audience segment, such as your high value customers; a buyer persona, which is an archetype that represents a particular segment with the additional of human characteristics; or even going after one-to-one personalization.

Marketers' use of personalization

The sample size was small—approximately 62 respondents. The methodology was crude—an informal poll on Gartner’s mobile application. But I was still surprised by the responses, especially since these respondents had signed up for a session on personalization. I was especially surprised by two of the results from this poll:

  • 11% of respondents were unaware of their companies’ personalization efforts or thought they weren’t pursuing at all, pointing to a missed opportunity to improve customer engagement.
  • Over half of respondents were only using or pursuing segment-based personalization, suggesting they were in the early stage of personalization or didn’t see the potential in deeper levels of personalization.

Impact of personalization

I also polled the audience on how they thought personalization would impact their highest value customers—those individuals that spend more, engage more and are more profitable than other customer segments. Considering how few companies and brands are effectively pursuing and implementing personalization, when they actually get it right, customers are more likely to reward them.

Marketers' beliefs about the impact of personalizationThe methodology was the same, but the sample size was admittedly smaller—approximately 33 respondents—which I suspect had something to do with timing. This poll was taken near the start of the session, so maybe had late arrivals or people became more willing to share later in the session. Nevertheless, the results of interesting and dismaying at the same time.

  • The good news is 97% of respondents predicted personalization would have some positive impact on their company’s high value customers. Only 3% were unsure or expected no impact.
  • The bad news is 64% of respondents thought the impact would be deeper customer engagement, which is valuable, but certainly less tangible than increasing purchase frequency or average spend.

These results left me wondering about the correlation between the responses to these two polls. Are marketers reluctant to invest in advanced levels of personalization because they’re unclear about the value it can bring or how to measure that value in terms of business results? If that is the case, are they missing the mark on personalization by lowering their expectations or failing to measure the real impact?

To be clear, personalization, even segment-based personalization, holds the potential to increase purchase frequency. Consider email marketing that is personalized with useful product recommendations based on what you recently purchased. It also has the power to increase average spend, such as customizing the commerce site based on behavioral data to cross-sell or upsell customers.

Let me try to the poll again. What level of personalization is your company using or pursuing? And, how would personalization impact your company’s high value customers?

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