Marketing: It's Nothing Personal

A report from the CMO Council reveals that personalization is a marketing force that isn't being fully utilized -- yet.

by Marshall Lager

The good news in the world of marketing is that more than more than half of all respondents in a recent Chief Marketing Officer (CMO) Council study plan to allocate 10 percent or more of their marketing budgets toward personalized communications, with a quarter of respondents allocating at least 20 percent. The bad news is that only a handful of respondents felt their previous personalization efforts had been successful, and 38 percent said they didn't even know whether personalized communications had outperformed traditional mass-marketing tactics.

"The Power of Personalization," a study of 700 senior marketers worldwide, reveals flaws in past attempts to get closer to the customer, while simultaneously preserving hope for a better tomorrow. "Clearly, CMOs are gaining more confidence in the process of personalization and are increasingly willing to direct more of their marketing budgets to personalized communication tactics," said Donovan Neale-May, executive director of the CMO Council, in a statement. "Nevertheless, many marketers' programs have been deemed unsuccessful because of a lack of actionable customer data used in campaign planning -- as well as because of inadequate analytics used in assessing post-campaign effectiveness."

In a follow-up interview with destinationCRM, Neale-May adds that a disconnect exists between available capabilities and the willingness to use them. "The deficiency we're seeing in marketing organizations is a lack of intelligence, intimacy, and understanding regarding the customer," he says. "It's frustrating to see, because this isn't a new issue."

Neale-May attributes much of the personalization gap to inertia. "Tools -- and, increasingly, services -- exist to access individual-level customer data," he says. "They can predict which toothpaste brands might [fail], and which customers are likely to defect, but who's extracting and using the data for more targeted campaigns? Procter & Gamble is still doing mass marketing because its agency is pushing for it." In the study, 44 percent of respondents claimed low usage of personalized communications in their programs for customer acquisition and customer relationship management.

Still, marketers understand the value of personalization even if they aren't using it yet. "Personalization strategies and programs will be very important to maintaining customer relationships," Neale-May says. "A lot of marketers recognize the value of cross-channel communication."

More than advertising and special deals, personalization provides marketing communications with the means to deliver real value to customers. "Look at texting -- it's a very powerful channel for notifying customers," Neale-May says. "Chemical companies can notify farmers when the ideal time is to spray crops based on weather and other factors; drug companies can text people to remind them they need prescription refills."

The CMO Council study proposes a long list of winning strategies in personalized marketing communications, including:
  • Individualized emails and letters;
  • Opt-in, permission-based marketing programs;
  • Targeted database marketing leveraging personal profiles;
  • Personalized email promotions based on timing of sign-up and regular intervals thereafter;
  • Print-on-demand collateral incorporating personalized content; and
  • Variable Data Printing (VDP).

Neale-May says he's hopeful that better marketing practices will become mainstream in the near future. "Close to 50 percent of the CMOs we represent are hired to fix broken marketing organizations," he says. "If we can grow customer-analysis competencies in marketing organizations, this can make marketing spend more effective."