Are You Getting Personal? Data-Driven Personalization Delivers 5 to 8 Times the ROI on Marketing Spend
Most marketers are using some type of personalization in their marketing strategies. At this point, we understand that personalization improves experiences and increases engagement. Your customer or prospect will appreciate an email much more that starts off with “Hello Tom” instead of “Hello Valued Customer.” (Provided of course that you have the accurate data and your customer’s name is actually Tom). Regardless, an effectively executed and personalized campaign has the potential to drive ROI, revenue, customer acquisition and brand loyalty to new heights.
Personalization Drives Big Results: The Facts and Figures
Delivering a highly personalized experience to today’s consumers is the standard most marketers strive for. And when we succeed, the results are pretty impressive. Here’s a look at the facts and figures which prove that personalization drives results.
- 86% of consumers say personalization plays a role in their purchasing decisions (Infosys)
- 73% of consumers prefer to do business with brands that use personal information to make their shopping experiences more relevant (Digital Trends)
- 45% of online shoppers are more likely to shop on a site that offers personalized recommendations (Invesp)
- 40% of consumers buy more from retailers who personalize the shopping experience across channels (Monetate)
- 80% of consumers like when retail emails contain recommended products based on previous purchases (Listrak)
- McKinsey research reveals that personalization can deliver five to eight times the ROI on marketing spend and lift sales 10% or more
- Personalization leads to a 67% transaction value, 300% conversion rate, and 7% annual revenue increase (SmartFocus)
- Marketers see an average increase of 20% in sales when using personalized web experiences and 42% higher conversion rates with personalized CTAs (calls to action) (SmartFocus)
Data Drives Personalized Marketing Strategies
Many marketers struggle to develop the capabilities to execute truly successful 1:1 personalized strategies. According to a PWC and Forbes Insight report, email and social media are the easiest touchpoints in which to personalize the customer experience. Among marketers worldwide, 80% said they used email to deliver personalized content with 42% personalizing social media interactions, according to VB Insight. Web pages, ecommerce channels and mobile applications remain the most difficult. To improve their personalization efforts, 58% of companies are focusing on building better data collection and analytics capabilities.
According to the 2015 VB Insight study, the types of historical data that marketers most frequently use for personalization include:
- 43% – On-Site activity (such as product page views, downloads)
- 41% – Search activity
- 39% – Social activity (such as Facebook likes and Twitter follows)
- 38% – Communication activity (such as email opens and clickthrough rates)
Leverage Both First Party and Third-Party Data for Deeper Insights
A brand’s first party data provides the foundation for any marketing initiative and is vitally important to develop to understanding customer preferences. This is all the data that is collected from each customer engagement, such as email addresses, billing addresses, purchase history, interaction with email campaigns, downloads, and so forth.
While some of this data is used frequently, such as email addresses and engagement metric in email campaigns, much of this data has probably not been activated because it is sitting in different marketing systems. In research by Econsultancy, 74% of those surveyed said first-party data gives great insights into their customers. To fully leverage these insights, the data that is housed in each of these marketing systems must be standardized and integrated to create one holistic customer view.
By taking these first party insights and leveraging third-party data assets, a company now has the means to deliver truly rich and relevant offers to their target audience. Third-party data can be used to fill in missing contact details, such as email addresses and phone numbers. Or just as importantly, third-party data can be used to verify and correct inaccurate contact details. Consider adding demographic selects to your customer and prospect records based on your brand’s target audience. Any number of selects can be appended such as gender, age, occupation, lifestyle, interests, presence of children, estimated income, and more.
The types of identity data sources that are currently being used for personalization include:
- 57% – Email Address
- 45% – Name
- 41% – Location
- 40% – Demographics
Want Types of Personalization do Consumers Expect From Brands?
Data from MyBuys’ seventh annual Personalization Consumer Survey reveals that 53% of consumers say it’s important that brands recognize them as the same person across all channels and devices that they use to shop. Moreover, 48% recognize that they purchase more from retailers that leverage shopper interests and buying behavior to personalize the customer experience across channels.
Additional study findings include:
- 53% of consumers spend more time with brands that make website product recommendations based on browsing or buying behavior
- 52% spend more time when brands target them with online ads based on shopping behavior
- 48% spend more time with brands that send personalized emails
The Negative Impacts of Impersonal Communications
There is obviously huge uplift when personalizing consumer interactions, but marketers are often unaware of the negative impacts of sending impersonal messaging. A recent survey revealed that 67% of consumers have unsubscribed from an email list when sent irrelevant information. An additional 43% ignored future communications from the company, and 32% stopped visiting the company’s website or mobile app.
Personalized marketing isn’t a new idea but brands need to remember just how much of an impact a personalized experience can have on revenue, brand loyalty, and customer acquisition and retention. This is where the future is headed – brands will compete and win based on who delivers the most relevant and personalized customer experiences.
To learn more about data driven practices can improve your customer experiences download our free customer experience marketing success kit.