Personalized Marketing (The Power of )

Groundbreaking research study designed to gain greater insights into the relevance and value of customized content, collateral and communication, and how this can influence and impact marketing effectiveness, customer receptivity and business outcomes. Over 700 senior executives ranging from CEO, CMO, SVP and VPs of Marketing from across technology, Internet, telecommunications, media, professional services, banking/ finance, retail, consumer goods and manufacturing took part in this aggregation of in-depth insights into the relevance, value and adoption of personalized communications by global marketers.

While a survey is a snapshot in time, The Power of Personalization provides an illuminating, global picture of what’s working – and what’s not working – as marketers continue to explore, define and apply personalized communication strategies. This report highlights the technologies, practices and solutions such as new on-demand personalization technologies, customized content creation and digital print systems, one-to-one delivery and interaction channels, and the emergence of new applications such as trans promo documents that combine transaction and marketing communications.

One thing is clear. Marketing executives are actively exploring customized communications in light of new complexities and costs of e-mail campaigns, search marketing, and online lead generation, as well as questionable returns on direct response advertising and mail order marketing. The new emphasis and importance of individualized lifecycle marketing techniques is escalating as companies see the impact, differentiation, loyalty and word-of-mouth results of customized communication.

Consider the following statistics:

• Spending on direct-mail advertising (an integral part of personalized communication applications)
  shows no sign of abating; investments by marketers totaled $58.4 billion in 2007, and that figure is
  expected to increase to more than $70 billion by 2011 (source: Winterberry Group).

• More than $3 billion was spent in the U.S. alone on e-mail marketing (source: EmailInsider).

• Yet, an overwhelming 56 percent of marketers believe personal communications out-performs traditional mass market delivery; digital, database-driven channels (email, web, contact centers) reportedly offer the most upside potential for engaging in customized communications (source: The Power of Personalization)

Key questions still remain:

Will companies continue to devote the majority of their budget to mass marketing campaigns in an era where consumers clearly prefer to receive offers that are delivered to them at the right time, in the right way and in the right context or environment. Will green-minded consumers shun brands that cannot reach them in an eco-friendly manner? Are marketers finally going to use and apply customer analytics to extracting greater value and revenue from customer interactions and communications?

At its core, The Power of Personalization aims to identify best practices. It does so by drilling down into the impact of personalized communications on customer acquisition, retention and business outcomes. Additionally, it is designed to help educate marketers on the application and value of new on-demand personalization technologies, customized content creation and digital print systems, individualized lifecycle marketing, one-to-one delivery and interaction channels, and the emergence of new applications such as “trans-promo” statements that combine transaction and promotional marketing communications.

The Power of Personalization delivers timely guidance on the application of customer analytics, database profiling, personalized web content and collateral, and individualized communication (e-mail, direct-mail) – as well as more tailored one-to-one web interaction and content delivery, as well as point of sale merchandising.

As business, small and large, discover the value of personalized communications, there will likely be greater budgetary resources devoted to individualized messaging techniques. Importantly, this study yields actionable insights that will help marketers improve their efforts in this area as they strive to attain a time-honored objective: employing more effective communications techniques to maximize the value and ROI of their customer acquisition and development initiatives.

Quantitative Research:

• Improving customer retention and loyalty is the primary driver of personalization strategies; while there is high-perceived value of customized communications, usage is still very low despite many years of experience.

• Over 56 percent of marketers believe personalized communications out-perform traditional mass market delivery; digital, database-driven channels (e-mail, Web, contact centers) reportedly offer the most upside potential for engaging in customized communications. (Those in technology/Internet related fields and professional services rated their personalized initiatives even higher at 63.4 and 61.7 percent approval over mass-market delivery, respectively.) What’s more intriguing, however, is that 38 percent of marketers don’t know whether their personalized communications have outperformed their traditional Marcom techniques.

• Nearly 50 percent of marketers report having fair to poor or little knowledge of customers, and almost 47 percent rate their company’s data integration capabilities as being deficient or needing improvement. For respondents in professional services, these numbers were more encouraging, as 56.2 percent rated their customer data as “extremely good” or “reasonably reliable.”

• Inadequate systems, data, resources and budgets challenge marketers to do more personalization; almost 10 percent of respondents rate the accuracy and reliability of their customer data as extremely good.

• Chief marketing executives are seen as the primary champions and owners of personalized marketing initiatives. Interestingly, however, sales and customer relationship management groups most frequently maintain control of the data that provides the foundational input for these campaigns.

• Many marketers currently spend less than 10 percent of their budgets on personalized communications; looking ahead, 55 percent say they will spend more than 10 percent.