Study Highlights Personalization’s Increasing Importance and Impact – Along with Areas for Improvement

Apr 26, 2018

There’s no question about it: one size definitely doesn’t fit all, with digital marketers saying that personalization is more important now than ever, according to a newly released annual study from Evergage and Researchscape International. As customers across industries have come to expect helpful, relevant, and individualized cross-channel experiences, nearly 8 in 10 marketers (77%) think that personalization should be a bigger priority in their organizations – up from 73% in 2017 and 64% in 2016. Despite all of this, marketers cite challenges in campaign execution, as they seek to foster one-to-one, in-the-moment experiences.

In its fifth annual study, “2018 Trends in Personalization,” Evergage – in conjunction with Researchscape International – examined where, how and why digital marketers are applying personalization, along with benefits and challenges experienced. Three hundred marketing professionals, at companies of all sizes and across industries, participated in the online survey, conducted in February and March of this year.

Personalization: The Ultimate in Customer-Centricity

Services such as Netflix, Amazon, and Spotify have set the bar in consumers’ minds for what personalized experiences should be. Customers are now increasingly looking for that type of treatment not just in their personal interactions, but across their business interactions as well. In fact, nearly nine of out 10 marketers surveyed (88%) say their customers expect experiences, across channels, that are individualized to them.

In addition, nearly all marketers (98%) agree that personalization positively impacts customer relationships – with 3 out of 4 (74%) describing that impact as “strong” or “extremely strong.” Marketers cited benefits achieved from their personalization campaigns, including measurable lift in business results (87%) – with more than half of marketers citing a lift greater than 10%.

Three principal areas of benefits marketers experience include:

  • Increased visitor engagement (55%)
  • Improved customer experience (55%)
  • Increased conversion rates (51%)

As more organizations seek to connect more deeply with their customers and realize these benefits, they’re increasing their investments in personalization. More than 1 in 3 marketers (37%) say their personalization budget will increase next year (60% note it will remain the same).

Challenges Encountered

Despite recognizing and realizing substantial benefits, many marketers feel their personalization efforts are just scratching the surface. They see more that can be done to make personalization more pervasive and effective, and think there’s opportunity for improvements – both at their own companies and at large. For example, 65% of marketers give their company’s personalization efforts a “C” grade or below, and just more than 1 in 10 marketers (12%) are “very” or “extremely” satisfied with the level of personalization in their company’s marketing efforts (38% are moderately satisfied).

In addition, nearly 7 in 10 marketers (69%) think the industry isn’t getting personalization right – a sentiment more pronounced within large companies (83% of marketers at organizations with $1 billion or more, compared to 63% of marketers at smaller organizations). That’s not to say they’re disillusioned, though, since larger organizations are investing or planning to invest more in personalization.

Some of these hindrances experienced may stem from data challenges. For example:

  • Garbage in, garbage out: More than half of marketers (55%) say they don’t have sufficient data and insights to drive effective personalization. Marketers at B2B companies feel this challenge more deeply (58% at B2B companies; 39% at B2Cs; 60% at companies that define themselves as both B2B and B2C).
  • More data difficulties: Nearly 1 in 3 marketers say that low-quality data (31%) and difficult access to data (31%) impede personalization from being a bigger priority in their organizations. (Other top challenges cited include lack of budget- 51%, lack of personnel- 49%, and lack of knowledge/skills- 40%.)
  • Data sprawl:Nearly 7 in 10 marketers (69%) say their customer data is stored in three or more systems. Marketers are also drawing on (often simultaneously) multiple tools and “point solutions” to execute personalization campaigns – including email personalization tools (64%), A/B testing (55%), triggered email solutions (36%), recommendations engines (17%), personalized search tools (8%) and more. Just more than a quarter of marketers (26%) currently use a personalization platform, which can encompass all these functions, while centrally storing and processing customer data.
  • Limited cross-channel visibility:Many organizations can’t connect the dots across channels, as they’re unable to access and act on data that shows a customer’s journey from one touchpoint to the next. In fact, 73% of marketers say their company has just a few – or no – channels connected. 

All of this may explain why more than half of marketers surveyed (56%) describe their organization’s personalization maturity as “limited” at best. Only 11% think their company delivers “advanced” or “best-in-class” personalization.

Types of Usage

Marketers reported on the various ways they’re applying personalization, including:

  • Channels employed:Digital marketers today use personalization in email (77%), on their websites (52%), in their mobile apps (31%) and in their web apps (24%).
  • Criteria used:Marketers report personalizing based on an online visitor’s campaign source (43%), location (39%), demographics (37%), products purchased (36%), clicks (33%), pages/content viewed (32%) and company (27%). Only 12% factor in a visitor’s engaged time on a page – shown to be a highly accurate reflection of visitor interest.
  • Focus on email:Marketers personalize their email campaigns by first name and/or company name in the message or subject line (76%), tailored messages or promotions by audience segment (52%) and product or content recommendations by audience segment (51%). Nearly half of marketers (49%) say their messages are personalized at send-time, while only 13% deploy open-time personalization (enabling content to update in real time based on the person’s up-to-the-moment behavior or catalog changes). More than 1 in 3 marketers (35%) trigger emails based on a visitor’s behavior, and a quarter (25%) tailor their product and content recommendations at the individual level.
  • Machine learning:More than 1 in 4 marketers (26%) say they employ machine-learning-driven personalization: that is, using algorithms and predictive analytics to dynamically present recommendations and experiences at the individual level. Among those not yet using machine learning, 41% of marketers say they plan to do so within the next year (26% at B2B organizations; 55% at B2C organizations; 49% at organizations that are both B2B and B2C).