Delivering outstanding customer experiences has become a primary strategic objective for both B2B and B2C marketers. In the 2017 Digital Trends report by Econsultancy (in association with Adobe), surveyed marketing, digital, and ecommerce professionals selected optimizing the customer experience as their single most important opportunity for 2017, and they identified customer experience as the primary way they will differentiate their company from competitors over the next five years.
Most marketers now recognize that personalization is a critical ingredient in the recipe for great customer experiences. In a 2017 survey of marketing and business leaders by Researchscape International (in association with Evergage), nearly all (96%) of the respondents agreed that personalization helps advance customer relationships, and 88% agreed that their prospects and customers expect a personalized experience.
In the Econsultancy study, survey respondents identified targeting and personalization as a top digital priority for 2017 (behind only content marketing and social media engagement), and half (51%) of the respondents said they would increase their spending on personalization this year.
But despite all the recent focus on personalization, it's clear that most companies have more work to do to maximize the benefits of personalized marketing. In the Researchscape survey, only 30% of respondents were very or extremely satisfied with the level of personalization in their marketing programs, and 46% gave themselves a grade of "C" or lower on their current personalization efforts.
Other research has shown that many buyers aren't particularly impressed with the personalization efforts they encounter:
- In a survey by Adobe, 71% of consumers said they like receiving personalized offers, but 20% reported that offers are not done well.
- In a study by the Economist Intelligence Unit, 70% of survey respondents said that many of the personalized messages they receive are annoying because the attempts at personalization are superficial.
So what can be done to improve the effectiveness of personalization? There are two important steps that companies can take to boost the impact of their personalization efforts in 2018.
Make It Valuable
To be effective in today's competitive environment, personalization must provide meaningful value to customers and prospects. Personalization that is superficial or superfluous - i.e. personalization that is merely "window-dressing" - simply won't cut it.
Recent research has confirmed that buyers want to get practical value from their interactions with companies and brands. For example, in a survey of consumers conducted earlier this year by the CMO Council and SAP Hybris, nearly half of the respondents defined value as something that saves them time (49%) or makes their lives easier (47%).
Value is equally important to B2B buyers. In a 2017 survey of B2B buyers, Aberdeen Group asked participants what factors they consider when choosing a vendor. Over two-thirds (68.2%) of the respondents said the vendor can help sharpen our competitive differentiation, and over half (55.7%) said the vendor can help me identify new possibilities and avenues for revenue.
Personalization can be a powerful way to enhance the value of interactions with customers and prospects, but it must be designed with that objective in mind. Therefore, marketers should evaluate any proposed personalization initiative by asking a basic question: How will this application of personalization provide practical value to our customers and/or prospects?
Make It (Mostly) Invisible
Since the early days of personalized marketing, the most common way to personalize a marketing message has been to include specific facts about the recipient in the message, a practice that can be called explicit or overt personalization.
It's as if marketers believe that the effectiveness of personalization is based on communicating to the customer or prospect what they know about him or her. There may have been some truth to this belief when any form of personalization was rare. Now, however, most types of overt personalization are largely ineffective (because they are so common), and they can be seen as "creepy" by customers or prospects.
Today, personalization is usually more effective when it's invisible. The best personalization doesn't feel like personalization - it just feels like a message or experience that's really relevant, appropriate, and valuable.
There are, of course, some situations where overt personalization is still effective. For example, online stores (such as Amazon) often provide personalized product recommendations that are introduced by a phrase like, "People who ordered [Product X] also purchased . . ." When the personalization algorithm works well, these recommendations can be useful to customers, and most buyers don't view such recommendations as intrusive or creepy.
Illustration courtesy of Michael Coghlan via Flickr CC.