This consumer trend, combined with technological development in advertising, presents to marketers exciting opportunities in personalization that help increase relevance and develop deeper connections with consumers. By tailoring products, communications and experiences, companies can boost brand preference among audiences and create greater marketing impact.
The Pitfalls Of (Too Much) Personalization
While personalization clearly benefits marketing efforts, tailoring products, messaging and campaigns for multiple consumer segments often also means experiencing incremental costs. Therefore, it is essential that companies find their personalization sweet spot that works with their brand goals by becoming aware of the trade-offs involved.
Over-personalization is an issue that the industry has yet to fully understand, with very few brands having designed an optimal personalization strategy. As many marketers have learned over time, personalization can lead to suboptimal results and loss of ROI if not done correctly. A recent McKinsey survey of senior marketing leaders found that only 15% of CMOs believe their company is on the right track with personalization.2
Based on our industry learnings, we have created a framework to help marketers develop their personalization strategies and achieve optimal ROI for their unique brands.
Identifying Your Brand’s Personalization Needs
A common belief is that personalization means providing completely different offerings to each consumer, but this doesn’t always create the most desirable impact for a brand.
We are currently witnessing brands that have built hugely successful businesses over decades on the back of mass marketing suddenly pivot towards extreme personalization for small niches of consumers, only to see disappointing returns. Industry buzzwords such as “1:1 marketing” are contributing to the assumption that this is the way to go for all brands – which is far from the truth.
In reality, each brand’s personalization need falls on a spectrum that ranges from “same offerings for all” to “tailored offering for each individual” and it is important to locate where they stand before designing a personalization strategy.