Truth, Lies, and Personalization: What Keeps CMOs Up at Night
June 26, 2019
PUBLISHED BY Bryan Stolle
There has been a significant uptick in marketers’ efforts to prepare and deliver more personalized messages and experiences to targeted audiences across all channels. Forrester reports that 91% of marketers have included personalization on their 2019 roadmap. In a virtual roundtable interview with 10 leading chief marketing officers (CMOs) conducted by OneSpot, the company was able to better understand the reasons why marketers are taking this path, the capabilities they desire, and the challenges they face. The key take-aways from the CMO discussions were as follows:
Q: Are you focused on building an owned, addressable audience for marketing?
A: All the CMOs agreed on the need to build and maintain a large owned and addressable audience, to build a direct connection with their customers and users. Further, personalization was seen as a requirement to maximize those connections and build deeper more lasting relationships. All companies view personalization, and the benefit of creating a better relationship with prospects and customers, as a strategic point of difference, and one to be actively pursued.
In general, companies who work directly with customers see personalization more as “business as usual”, and are increasing their investments, especially around AI-based technologies. Companies who work through wholesalers or retailers see personalization as innovation and are well behind their direct-to-consumer counterparts. There has been a significantly increased focus in most marketers’ efforts to prepare and deliver more personalized messages and experiences across all channels.
Q: What business benefits do you expect from this?
A: A more personalized approach will lead to deeper relationships with customers, higher conversion rates, and increased sales. They also believe personalization will serve as a defensive strategy if they are competing against the likes of Amazon or other direct-to-consumer brands.
Further, they believed that the benefits will transcend marketing and be a critical input into product development and supply chain management.
Q: Why are you focusing on this now? How important is the goal vs. other priorities?
A: In an environment where marketing investments are being questioned in a slow-growth US market, personalization is seen as an appropriate response to greater accountability for that investment. The case for personalization is especially clear for brands that thrive on a passionate audience, where there are high levels of engagement. Brands like Warby Parker, YETI, Adidas, and Apple rely on customer loyalty and omnichannel content experiences to drive ongoing engagement.
Q: How are you planning to measure the success of personalization efforts in terms of driving business results?
A: Among brands that don’t sell directly to consumers, the ability to measure the ROI of personalization is hard because of challenges attributing sales to digital behavior. Existing attribution methods are either incomplete or expensive. As a first step in measuring the ROI of personalization, some are taking an incremental approach by proving the ROI of personalization in digital advertising, measuring increases in engagement, or focusing on building loyalty programs that can measure cross-selling across a portfolio of products.
Q: What marketing capabilities are you hoping to achieve?
A: CMOs are seeking a much richer understanding of their customer segments. They hope to develop and proliferate much more fine-grained segments. They want to better understand who the true “friends” or fans of the brand are, and who are merely “acquaintances” or justfriends of the true brand friends. This more nuanced understanding of brand affinity or loyalty will be used to better target the appropriate messages, content and offers.
Q: What organizational capabilities do you need to make personalization successful?
A: The CMOs clearly understood they need first-party data to build and better interact with their owned audience. The understanding of what it really takes to achieve personalization was less clear. They cited a range of requirements from technology, content, people, processes, and new employee incentive programs to create a re-engineered way of working to deliver personalization and ultimately a more relevant experience for their customers.
For those companies who have traditionally not had to manage customer relationships directly, the need for new technology infrastructure is clear, but daunting. The realists understand this is a multi-year journey, at least 3 years, and it will take many phases of designing, building, and scaling to find success. Personalization is not a quick project, it’s a journey. The realists also need to convince internal naysayers concerned about (a) the expense and complexity of the project or (b) that scale may be hard to achieve.
In short, for many, it’s seen as a mindset shift, albeit one necessary for survival.
Q: So how do you get started on this journey?
A: CMOs re-iterated that there are many personalization challenges across infrastructure, resources, regulatory, content, processes, and the ability to measure ROI. To manage the complexity and organizational inertia, most are pursuing narrow-scoped personalization projects for their most valuable prospects and customers. They expect returns to be quicker that way and to be able to build confidence internally in the benefits of personalization.
There was a shared understanding and agreement that content operations would need to grow to meet the different needs of customer segments or individuals (i.e.: more specialized content), and that there are few external agency partners who are ready to help. That probably explains why many marketers are now building and growing their in-house content creation teams.
Q: What other considerations are important in launching a personalization project?
A: For global companies, the different regulatory frameworks around data and personalization create a layer of complexity that needs attention and understanding, with the growing risk that U.S. marketers get limited or restricted first-party data, making it harder to identify and better understand their audiences, and making it more imperative to develop owned “opted-in” audiences.
In short, owned audiences and more targeted authentic personalization with clear attribution and ROI are seen as a growing imperative as marketing budgets come under pressure and the demand for accountability from the C-suite increases. Most CMO’s are approaching the challenge with focused programs to develop organizational skills and “muscle-memory” before rolling personalization out across all marketing efforts and channels.
Read the original article on Forbes here.