Achieving personalization at scale is increasingly being recognized as the “holy grail” of marketing. However, far too many CMOs are delegating the quest to their direct response teams, divorcing personalization from larger efforts to build a company’s brand. This approach is misguided and fails to leverage personalization as a tool for building brand equity while driving revenue.
Personalization is not just an initiative for mid-level marketing managers or product people anymore. The executive team can’t afford to take a hands-off approach as too many fundamental pillars of the business are at stake. A personalized consumer experience affects so many touch points across platforms that it needs to be a C-suite priority for online retailers, publishers, and travel brands.
A largely understated challenge for executives across industries is working on initiatives that directly connect them to consumers while having the scale to merit executive suite attention. Overseeing a robust personalization strategy is a rare opportunity for the CMO to be sure her brand connects with users on a person-to-person level, thousands of times per day.
With scale in mind, here are four reasons why the C-suite must take an active interest in personalization:
1. Personalization is one of the only initiatives that affects every customer, prospect and visitor to your web site. Buying a CRM will affect your sales process. Purchasing advertising will impact some users. But personalization affects every customer, prospect and visitor. Few initiatives you take part in across the company will come close to impacting the number of consumer touch points that personalization does. Why would the CMO take a back seat to something that is so central to her business?
2. Data unlocked from personalization informs strategic decisions. As a CMO, much of your time is spent trying to make positive yield decisions amidst great uncertainty. Where to invest your company’s limited resources — that is the question! (And it’s one that is easier to answer than Hamlet’s decision about whether or not to slough off this mortal coil.) Personalization is a vital tool in making these judgements.
For example, many leading retailers are seeing a “Super Pareto” principle emerge where fewer than 5% of users are driving more than 90% of revenue. These “power users” are your e-Commerce MVPs and you want to do everything in your power to identify this cohort and personalize experiences for them. Collecting and analyzing data from your “super buyers” yields a treasure trove of insights on how your best customers are engaging with your web site and point to where and how to improve the buying journey and experience for them.
Analyzing data from personalized transactions can inspire the creation of entirely new marketing campaigns geared towards customers that bring in most of your revenue or new marketplace positioning based on how visitors engage with your brand.
3. Effective personalization directly increases revenue. Personalization is not merely a cost center to bolster marketing or an investment in better UI. According to McKinsey & Company, personalization can reduce acquisition costs by 50%, lift revenues by 5% to 15%, and increase the efficiency of marketing spend by up to 30%.
In a nutshell, deploying a personalization platform has been proven to directly increase the bottom line, driving millions of dollars in additional revenue for many leading retailers.
4. Failure to personalize may end up costing your brand. Poor customer experience due to lack of personalization and trust are sending customers for the hills, already attributing $2.5 trillion in lost retail and brand sales globally just this past year. The hard truth is that consumers don’t want impersonal, and businesses can no longer take a back seat to relationship building. One-to-one personalization isn’t a mere key differentiator anymore, it’s what CMOs need to consider when looking to future proof the business.
Five years ago, personalization was a nascent and experimental technology that could be relegated to forward-thinking directors of e-Commerce to test and optimize. But that’s no longer the case. Today’s consumers demand personalized experiences, and executives who lead online-based business must directly involve themselves in delivering them.
Most companies are not an army of one. A CMO must delegate when necessary. But when it comes to personalization, there’s too much at stake for the CMO to not make it, well, personal.
Mukund Ramachandran is the Chief Marketing Officer at Dynamic Yield and is responsible for all go-to-market and marketing functions including brand and corporate marketing, demand generation, product marketing & sales enablement. He has over 15+ years of experience in senior marketing positions in high-growth companies such as Krux, DataXu, Tremor Video and Yahoo!. Ramachandran holds an MBA from the Thunderbird School of International Management, and a degree from the School of Hard Knocks as a professional stand-up comedian.