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The Death of Personalization: Inevitable or Exaggerated?

2020: It wouldn’t be a new year without a passel of prophecies and things to come. Each industry has its fair share of oracles and fortune-tellers revealing their predictions, and digital marketing is no exception. From the inevitable to the ridiculous, I’ve recently read quite a few.

However, one stood out to me as rather alarming. In its recent report of “Top Marketing Predictions for 2020,” Gartner claims that, “By 2025, 80% of marketers who have invested in personalization will abandon their efforts,” citing, “lack of ROI, the perils of data management, or both,” as the leading reasons.

Ordinarily, I would simply chuckle, shake my head and file this article away with all the others that claim that “this year will be the death of email,” but as a leading analyst firm, Gartner is a widely recognized and largely trusted source of research and data.

So, I thought about why marketers might have responded this way and I’m here now to challenge their perspective on the so-called death of personalization.

Reading Between the Lines

Why would marketers abandon what is, for most, arguably their best opportunity to differentiate the brands they represent?

Consumers have never been so spoiled for choice. In a commercial landscape where competitors offer similar or identical products, at a similar or identical price, with comparable levels of convenience and value, personalization of experience is critical to striking the resonant chords that drive customer loyalty and brand affinity.

Above that, consumers now have a hard expectation of a value-based, personalized experience (thanks Amazon!), that is only likely to grow. Since customer expectations have largely driven marketing innovations, marketers are compelled to stay abreast. This isn’t news. Marketers understand this keenly.

So again, why would 80% of them plan to abandon personalization?

I think it boils down to two reasons:

  1. Reported “low ROI” on personalization spending.
  2. Because it’s hard.

Biting the Hand That Feeds

First, let’s tackle the ROI issue. To me, this is simply a matter of misperception.  

Given my earlier points on consumer expectations, CMOs should be viewing personalization as a table-stakes requirement of customer retention and lifetime value. Almost any improvement you introduce to your customer experience is likely to bring an initial lift in performance, simply because it’s “new.” 

After a short while, it simply becomes expected. It’s no longer reasonable to expect big spikes in lift simply because you’re personalizing some of your content. But—if you walk your strategy back to a general, one-for-all experience, then you’ll certainly see a spike…downward. 

The real winners will be the 20% of marketers who stick with it and continue to innovate.  Personalization should be viewed as critical to the holistic experience of the customer (and long-term retention), rather than measured as an element of campaign-level performance.

Competitive viability and sustainable growth seem like damn good ROI in an ever-crowded marketplace.

Why Rely on Relics of the Past?

Second, let’s talk about difficulty.

I get it, ingesting massive amounts of data and trying to sift out the actionable insights, then translate that into a meaningful, personalized experience on the right channel within a relevant timeframe… is hard.

As with any aspect of marketing strategy, measurable success happens at the intersection of people, process and technology. Personalization takes a thoughtful content and contact strategy. It requires a firm commitment and the philosophical and operational shift to keep that commitment.

Most importantly, it requires the right technology.

Gartner reports that 14% of the total marketing budget is now dedicated to personalization. And 44% of that 14% is spent on technology (6.2% of total budget). But is it spent on the right technology?

The efforts of many marketers are constrained and made more difficult by the use of outdated legacy platforms with inherent data latency and require extensive coding, ETL customizations, or expensive “bolt-on” solutions to drive personalization and synchronize cross-channel experiences. Any task is more difficult with the wrong tool.
When integrated together, modern messaging platforms, such as Iterable, and customer data platforms (CDPs), such as Segment or mParticle, can accomplish the following:

  • Work in real time, instead of relying on batch processing, empowering marketers to keep pace with—rather than chase—the customer experience
  • Use near-limitless data structures that allow marketers to quickly surface and act on insights from millions of data points across years of customer history
  • Programmatically deliver personalized, value-based experiences—synchronized across multiple channels

Using outdated, legacy platforms to drive your marketing personalization makes about as much sense as commuting in a Model-T. You could, but it’s highly manual, the parts are expensive and getting harder to find, and you’re already outpaced anyway.

Wouldn’t it be more effective and efficient to use something built for the speed of commerce today?

Shifting Marketing Mindsets

Shifting to modern platforms to drive your personalization strategy isn’t enough on its own: It also requires an evolution in the ways that marketing teams think and work, and you should leave your baggage behind.

As both the structure and timely availability of data are increased by these solutions, so do the opportunities for marketers to evolve their strategy and processes.

According to Gartner, “Only 40% of marketers report having a clear personalization strategy and roadmap,” Gartner recommends that marketers “take a step back to refocus on segments and test tailored recommendations to see what drives results.”  

I agree those are highly important, but those are final steps—not where marketers should start. Personalization in 2020 goes far beyond dynamic content and product recommendations. Marketers first have to consider such factors as personalization by channel, device, send time, frequency, loyalty, content, product and context…just to name a few. 
Modern platforms inherently provide programmatic capabilities for these factors and give back to marketers the time and resources to focus on building and refining their strategy, rather than the manual execution of campaigns. 

Having channels synchronized in a single platform, sharing access and insights to real-time data, means previously siloed teams can unify their programs and deliver an automated, timely experience, one that is refined by holistic testing across the entire ecosystem.

Committing to Change

Too often, organizations simply throw technology products or “solutions” at their challenges and expect them to make magic. It takes more than that:

  • First, decide that it’s necessary.
  • Second, make a firm commitment to do it.
  • Third, from the CMO down to the campaign specialists, get everyone on board and involved (philosophical change comes from above, procedural change happens below).
  • Fourth, innovate and test everything—from the production process to program performance—to find what works, what works best consistently, and why.
  • Lastly, stay the course. The performance and value of personalization should be measured with a long yardstick, rather than on a campaign-by-campaign basis.

Look at quarterly or annual performance for indications of health. Revenue-related metrics are certainly the most important, but also look for increases in non-attributable acquisition, NPS and customer satisfaction. 

When determining the value or ROI of personalization, factors of attrition should also be considered, such as unsubscribes, complaints, lapsed engagement, app-uninstalls or un-follows.
If 80% of marketers are ready to abandon personalization by 2025, then it just means they are using the wrong technology, using it the wrong way…or both. The good news is they have five years to fix it.  

The clock is ticking. Don’t be late.

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