Let’s face it. People are sick and tired of being treated as part of a generalized customer segment. After all, we’re individuals with different values and interests. We want to take a stand on important issues and will choose companies that reflect and support them. We don’t want to receive boneheaded marketing messages that expose a brand’s cluelessness about us.
Most importantly, we want to feel special.
Thanks to the growth of digital sales channels, it’s easier than ever to research, compare, shop and swap brands that don’t meet this new standard. More than 70% of consumers expect companies to deliver personalized interactions, McKinsey says, and 76% get frustrated when this doesn’t happen. Customer loyalty is fleeting, brand abandonment a reality. Three out of four consumers switched to a new store, product or buying method during the pandemic.
To wit, business has become personal.
Marketers know this all too well. According to an Ascend2 2021 survey, the top marketing objective of a strategy for using data to make decisions is to increase customer loyalty. McKinsey says companies that excel at personalization generate 40% more revenue from those activities than average players.
Personalization means recommending products that we want, giving us special promotions and offers, tailoring marketing messages that fill our needs, following up after we bought something, creating a great online experience based on our profiles, celebrating our milestones, championing purpose-marketing that matches our values, and more!
Do this, and we’ll reward you for it.
Salesforce says 57% of consumers are willing to share personal data in exchange for personalized offers or discounts. McKinsey says 76% of consumers are more likely to consider purchasing from brands that personalize, while 78% are more likely to refer friends and family. A Deloitte Digital report found that 87% of consumers are loyal to their favorite brand for three or more years, with 61% making at least three purchases from the brand in the previous six months.
Personalization sounds critical, right? So why do many marketers get it wrong? Judging from the lack of loyalty, marketers are failing to deliver a personalized experience. In a CMO Council survey, 65% of consumers said digital engagements during the pandemic weren’t exceeding expectations. Frustration mounts, leading to 73% questioning why they were spending with the brand in the first place.
Personalization isn’t easy.
In the article, The Value of Getting Personalization Right — Or Wrong — Is Multiplying, McKinsey cites five Herculean labors to pull personalization off: Lean into data and analytics, invest in rapid activation capabilities, invest in fit-for-purpose MarTech and data, commit to an agile operating model, invest in talent and training. Each of these labors deserves its own library.
Throw in a big dose of AI and machine learning — critical ingredients for enabling hyper-personalization at scale — and you’ve got the kind of massively messy project that makes and breaks careers.
Are marketers up to the task? They better be.
“Personalization is a force multiplier — and business necessity — one that more than 70% of consumers now consider a basic expectation,” McKinsey says. “Organizations able to build and activate the capability at scale can put customer lifetime value on a new trajectory — driving double-digit revenue growth, superior retention, and richer, more nurturing long-term relationships.”
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This article first appeared in cmocouncil.org
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