If you’re a marketer (or a marketing technology vendor) banking on personalization strategies for acquiring new customers and retaining existing customers, recent numbers and research findings can be scary:
- 80% of marketers will abandon personalization by 2025 because of lack of ROI and/or the perils of customer data management.
- Only 5% of brands fully curate home pages based on the individual browser.
- The most common challenge with Account-Based Marketing is delivering a personalized experience.
- Only 16% of organizations are actually deriving benefits from personalization.
Doom and Gloom for Personalized Marketing?
So is the old marketing personalization engine burnt out? Not exactly. It still exists today, but some feel there are better ways than others to go about it.
Evan Bakker, principal analyst on the Digital Performance Benchmarks team for Gartner, thinks where the story gets interesting is that very few CMOs cite personalization as a top priority. He cited the Gartner CMO Spend Survey 2020 which found that only 14% of respondents reported personalization and testing among their top-three capabilities. “Brands are still continuing to harness the power of customer data in some way, shape or form. The takeaway for us is that the ROI of personalization is definitely under question. And every organization is going to have different successes with that,” he said.
Gartner isn’t suggesting marketers throw in the towel on personalization. It has some ideas around how to approach marketing personalization, and it has to do with capturing meaningful data at sign-up, gathering and utilizing explicit data after login, personalizing at scale with implicit data and leveraging account data to target via email.
Related Article: 6 Marketing Personalization Strategies for 2020
What’s Bigger Than Personalization?
But first, some more context on the latest marketing personalization data. So nearly 90% of CMOs don’t put personalization/testing in the top three. Where are they focusing? Brand strategy (33%), market analytics (29%), marketing operations (28%), digital commerce (26%) and market research and competitive insights (25%) were the top five marketing capabilities listed as a top-three priority among CMOs.
It’s not smart to say one marketing capability or strategy should trump all for all marketers and brands. And take this one Gartner report for what it's worth: it's one report. Other reports find personalization as a priority: HubSpot’s State of Marketing 2020 found message personalization is the number one tactic used by email marketers to improve performance, for instance.
Priority or not, marketing personalization is at least a definite side dish for the marketing main course for brands for the foreseeable future.
Marketing Personalization: It Can Be Done
However, Gartner’s finding that 80% of marketers invested into personalization will abandon their efforts due to lack of ROI, the perils of customer data management or both by 2025 is a “missed opportunity,” said Eric Jan C. van Putten, vice president of marketing for Dynamicweb, which offers digital marketing software. “Practically all studies agree that we need to offer the best customer experience as possible. How can web and ecommerce personalization not be part of this?” (More on why Gartner made the call on marketers abandoning personalization).
Personalization is often perceived as hard to do, according to van Putten. It's also perceived, he said, as very hard from which to measure results. “From a technology point of view personalization is easy. Measuring vanity and actionable metrics are also not hard to do with the right marketing technology stack,” he added.
Some leading Digital Experience Platform (DXP) vendors share that IP-based personalization is dead and that you can only rely on explicit or implicit behavior for personalization.
“I disagree with this for B2B,” van Putten added. “A hybrid model would be the perfect model. Applying IP-based personalization to offer the right message on the first page visit will deliver a better customer experience in the first critical seconds. From there implicit behavior personalization can take it over for the next page visits.”
Related Article: 1-to-1 Marketing Personalization: Myth or Reality?
Here’s Looking at You, First-Party Data
Gartner’s Bakker suggests the approach to marketing personalization is what’s ultimately critical. He noted that 79% of CMOs are primarily relying on existing markets to fuel growth. That means doubling down on first-party data, or the data collected directly from their own audience.
“Yes, personalization has always been under question,” Bakker told CMSWire. “But I think another overarching objective is to try and extract or draw as much value out of your existing customers as possible, as opposed to eating up a lot of budget on the acquisition side: acquiring new customers who you're not sure whether or not they'll stay. It’s really all about doubling down on your known customers.”
Mary Meeker has his back on this one. In her 2019 Internet Trends report, Meeker reported a reality that Customer Acquisition Costs (CAC) can’t exceed Lifetime Value (LTV) for very long.
Specifically, Bakker's research found marketers would benefit if they focus on:
- Explicit First-Party Data: Which Gartner defines as data “actively entered by the user, e.g., gender, phone number, birthday, on brand sites.”
- Implicit First-Party Data: Data “captured based on session behavior and location by the brand on site.”
It’s about specifically activating the data that you already have about your customers, according to Bakker. “Some customers will only have browsing history with you, and they won't have an account,” Bakker said. “Other people will actually have some type of account under your brand. And in either case, you can use that data to create a better experience and theory. You can increase engagement and retention.”
Where Personalization Has Gone in B2B
Because we’ve become a transaction-focused society that prioritizes speed and simplicity, it’s becoming more and more complex to offer a personalized experience, according to Mike Hicks, chief marketing officer at digital workplace provider Beezy. “We’ve seen this with things like form field reductions for several years and restrictions in display network targeting, so the trends Gartner is highlighting are certainly in full effect,” Hicks added.
How is this playing out in the B2B world, particularly? In those high-value sales or complex solutions scenarios, the need to qualify a prospect’s fit against the ideal customer profile is critical, Hicks said. “Without it, you risk wasting the time of your highly-valuable sales resources,” he said. “As a marketer, many initial interactions with a prospect are now just an email address and potentially a company name.”
Historic B2B marketing was so skewed toward what the company wanted, that brands essentially required the prospect to disclose their full life history just to get access to something as simple as a white paper, Hicks added. Now, the tables are turned, he said, and it’s a much more cohesive give/get relationship that is based on uncovering a mutual understanding of need and fit.
A Mix of Technology and Common Sense
Beezy is responding to the personalization trends through a mix of "technology and common sense," Hicks said. “We are continually looking at the information we capture and ensuring it is aligned with the value equation of what we are providing,” he said. “Low-value interactions like a white paper or access to a webinar have a low-information threshold. A higher-value action like a demo request has a much higher threshold due to the investment of our time as well as the need to align our demo toward solving a business challenge of the prospect.”
This means investing in tools and technology that append additional information like job title and company size based on an email address and interaction tracking across email and web properties. They also need to predict business need to enable more intelligent conversations and more targeted automated messages with relevant content based on buyer stage.
“All of this is much easier to do when the ideal customer profile and the use cases your product solve are explicitly defined,” Hicks said. “This is because the entire marketing infrastructure can be built to ensure those that fit get the right level of high-value triage and those that fall outside of that ideal customer profile still have a positive and meaningful brand experience.”