Marketing Personalization: maximizing relevance and revenue

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These are early days for many forms of personalization, but there is now substantial evidence in the form of data and case studies – both of which are included in this report – that personalization works.

Our survey of 506 marketers finds that between 70% and 94% have seen an increase in the effectiveness of various key metrics by employing personalization, depending on the specific metric.

Several case studies highlight impressive effects of personalization applied in various ways and channels:

  • Microsoft dropped bounce rates by 35% and increased add-to-cart rate by 10%.
  • O'Neill increased conversions by 46% with web personalization.
  • Alex and Annie has seen a 73% lift in monthly email revenue.
  • Gamestop saw a 41% increase in average order value (AOV).

But personalization is different in each channel. In ads, web, mobile, and email -- the channels where personalization matters most -- customer data and engagement vary, as do customer expectations.

For one, marketers have different objectives for their personalization efforts:

The top objective by far is reaching more prospects.

Yet in spite of that, we found that efforts are not heavily focused on the top of the funnel, where we would expect to reach more prospects. Instead, we found that efforts are spread more evenly throughout the sales funnel.

Why is that?

Although we may think of the sales process as “top-down,” most companies implement personalization with a bottom-up approach. That is, most companies begin their personalization efforts based on “known” prospects or customers. The channels where personalization is being employed reinforce this finding.

Email is the dominant channel for personalized content, yet is often limited to field insertion (e.g. “Dear <name>”). Most personalization efforts are also based on transaction history and limited demographic data, meaning personalization is not done to a high degree in most cases.

We also found that speed matters. Interest, it seems, has a half-life. SAP Hybris tells us that after 12 hours, 70% of interest is gone. Real-time behavioral data will play an increasingly prominent role in personalization efforts across channels. 

Real-time behavioral data is typically more valuable than other data sources, and also getting easier to collect and use. As a result, web personalization tools, which focus primarily on this behavioral data, are becoming “omnichannel” personalization tools – that is, the foundation for personalization in other channels as well. Even email, where real-time would seem to matter less, is seeing substantial KPI increases with the addition of real-time behavior data.

What data sources are being used for personalization today?

First-party data is growing in importance and third-party is being viewed with increased skepticism. As Data Management Platforms (DMPs) and other tools enable marketers to use their first-party data where third-party data was once the only option, a combination of behavioral and historical interaction data will be increasingly applicable to all channels from top to bottom of the sales funnel.

The process of personalization consists of three key parts: identity, content, and delivery. Companies able to align these three components unlock the ability to personalize the customer experience. However, each element varies by channel. We look more closely at the process and each channel in the report. We’ll also help you get started.

Findings in this report come from:

  • Survey of 506 marketers about personalization and customer identity
  • Interviews with 31 vendors and brands:
  1. Autopilot
  2. Avari
  3. BlueConic
  4. BlueShift
  5. CallidusCloud
  6. Certona
  7. Criteo
  8. Demandbase
  9. NetProspex (Dun & Bradstreet)
  10. Evergage
  11. Experian Marketing Services
  12. H2O
  13. Hubspot
  14. Integrate
  15. Intercom
  16. Janrain
  17. Kenshoo
  18. Lattice Engines
  19. Lytics
  20. Monetate
  21. Optimizely
  22. Reflektion
  23. Rocketfuel
  24. Sailthru
  25. Salesforce
  26. SAP Hybris
  27. SDL
  28. Segment
  29. Tealium
  30. The La Jolla Group (parent co. O'Niell & Metal Mulisha)
  31. Thunderhead