Everybody loves personalized things. From customized clothes, meals, and experiences everything is better from the consumer perspective when things are custom tailored to fit their needs. But what about the merchant or business that is providing of these personalization services. What is it that they get out of their personalization efforts? Luckily a recent survey conducted by the Harvard Business Review Analytic Services surveyed more than 600 business executives to find out.
The first question of why do personalization of at all should not come as a surprise to anyone as the survey found that 90% of all survey respondents said the customers expects organizations to know their interest and anticipate their needs. Interestingly, however, the survey also found that almost half of survey respondents say that their organizations are tailoring communications to their customers across all channels. Meaning that even with 90% of the survey respondents acknowledging that customers expect the organization to know their interest only half of them are implementing personalization tactics across all their channels.
A reason for this lack of execution could perhaps be due to the fact as the survey points out, “Organizations can find it challenging to find the people with the right skill sets to drive personalization initiatives or implement them on the front lines where organizations and their customers interact in person.” In fact, 70% of survey respondents conceded that their organizations are struggling to keep pace with digital change.
Even with personalization employment problems, there are particular tactics that the survey respondents found to be table stakes such as email marketing, print marketing, and social media to round out the top three. However, for those fortunate enough to have the resources available the survey found three main tactics that deliver a competitive advantage. Those tactics are product offerings and recommendations, pricing strategies, and individualized online experiences.
When it comes to the return-on-investment for these personalization services, the survey found that 38% of the respondents said the initiative that is giving them the highest ROI today is personalized product offerings and recommendations at 38%. This was followed closely by in-person customer experience at 34%. When looking at how much of a return on the investment regarding revenues 25% of the respondents saw a 1 to 9% increase in revenues over the past two years however 32% said that they saw no increased attribution to personalization over the past two years. There is future optimism in this survey as 31% of the respondents feel that with personalization efforts they believe by 2020 they will see revenues grow from 10 to 25%.
Personalization for many institutions is becoming as the survey points out table stakes, however, with the challenges that arise with delivering these personalization experiences some organizations will struggling to keep up while other organizations that can take advantage of delivering on the competitive advantages hope to see substantial returns on their investments shortly.