The ROI of Personalization – Here’s How it Pays Off
The marketing industry has moved beyond questioning whether or not to personalize. I think we can all unanimously agree that not personalizing your marketing efforts is a pretty heinous crime nowadays, people (I’m looking at you, 70% of brands who think personalization is important but are still not implementing).
With rapidly innovating technology, almost any type of media can be personalized these days. From homepages to email copy, recommendations to loyalty discounts, sales funnels to personalized video, you can personalize the living daylights out of pretty much anything as long as it suits your objectives and amassed data points.
Now I know there will be a lot of you out there whose hearts sink just at the mention of the word ‘personalization’ . It means more work, more hassle and more room to mess up, right?
Wrong. Nowadays, it really doesn’t need to be. The much-heralded ‘holy grail’ of marketing is layered in terms of its complexity and capacity, and personalization efforts can be implemented to varying degrees of difficulty. The excuse we hear from most people in the field is that you simply don’t have the time or energy to allocate towards a well-executed personalization campaign.
But what you may be neglecting is the huge cost of not personalizing your efforts.
Across the customer life cycle, a savvy marketing personalization strategy will deliver an unparalleled ROI that makes a major impact on your bottom line. Consider these stats:
- In-house marketers who are personalizing their web experiences see on average a 19% uplift in sales
- Email marketing regularly sees a whopping 440% ROI when implemented effectively – or 44 dollars for every dollar spent
- Personalized Videos deliver a CTR that is higher than that of generic video by 164% as well as a 116% uplift in conversion
- Ninety-four percent of customer insights and marketing professionals across multiple industries said personalization is “important,” “very important,” or “extremely important”for meeting their current marketing objectives.
Personalization simply works: 88% of U.S. marketers reported seeing measurable improvements due to personalization — with more than half reporting a lift greater than 10%.
Customers now expect a personalized experience and consciously align their brand loyalty with the extent to which they feel ‘known’ and valued as a customer. We hear so often from marketers that they don’t personalize because it takes up too many resources. But here, my friends, is a logical fallacy. Communicating content that is not targeted to your different audiences pretty much means a wasted effort since irrelevant content generates 83% lower response rates in the average marketing campaign. If you are not personalizing, you are spending your time and effort on initiatives that DO NOT WORK. Worse still, generic non-personalized messaging can upset your customers and cause the opposite reaction than you intended.
Continuing to communicate with your customers en masse is reminiscent of the tale of a man who dropped a coin in a dark alley and was later seen searching for it under a street light a couple of blocks away. When asked why he was looking for the coin so far away from where he dropped it, he responded “well, there’s light here so I can see better”. Just because not personalizing is easier, doesn’t make it the right call.
If personalizing your customer acquisition efforts is important, personalizing your retention strategy is nothing short of critical. Your existing customers have a far higher expectation of you than those you have no relationship with. Failing to make them feel respected and valued can be catastrophic for a business. Furthermore, remember that not only can attracting a new customer cost as much as five times as much as retaining one BUT those shiny new customers are the least likely to convert. Estimates suggest the probability of selling up to new customers is in the 5–20% range, compared to 60–70% for an existing customer.
The good news is that you probably know your customers far better than you know your potential customers (and if not, there’s something very wrong going on…). So personalizing your retention strategy should be far easier than personalizing your acquisition strategy. However, it is exactly this wealth of data that sometimes adversely impacts personalization plans.
Marketers often find themselves aiming too high, in an attempt to leverage all they know about their clients. This may be right for certain use cases, industries or companies but certainly isn’t right for others. Getting personalization right doesn’t always mean personalizing as much as you can. Sometimes, a better ROI can be achieved by lighter personalization that leverages easily-accessible data and allows campaigns to launch quickly, rather than through more complex personalization projects that may never get off the ground.
Personalization doesn’t end at acquisition and retention. By 2020, 51% of consumers expect that companies will anticipate their needs and make relevant suggestions. That means you better be providing tailored recommendations that include price sensitivity in your upselling strategy.
Well-executed upselling and cross-selling techniques can lead to a boost in revenues by selling more to the same customer and the benefits extend to the customers’ experience as well. By effectively personalizing the upselling and cross-selling experience you can make sure that the customer chooses the right product for them; meaning you get a happy customer while simultaneously driving revenue.
Personalization has redefined marketing and the way we touch customers at every point of the life cycle. Personalization may sometimes be tricky to implement and requires some effort in terms of designing and executing a well-thought out strategy. However, that should not be a barrier for implementation since the ROI for personalized campaigns is unparalleled. Personalization means happy customers, more efficient and effective use of your marketing dollars and, ultimately, a major boost to your revenue. Across the board personalization of your marketing efforts should no longer be an option, but an imperative.
If you found this useful and you’d like to learn how to take advantage of the latest trends in a fast-paced and ever-evolving marketing landscape, we invite you to download a copy of our “How to stay ahead of the game in the marketing industry” guide for CMOs.