Generic customer outreach is outdated. We all know that at this point. It has to go beyond inserting a first name into the beginning of an email template (even though some retailers aren’t even doing that yet).
When looking at personalization in the retail world, it is interesting how big of a focus it is, yet how little it’s executed. In a recent Mastercard Sponsored Report by Harvard Business Review on the Age of Personalization, eight in 10 respondents say personalization is important to their organization’s strategy, and more than half of which noted their personalization tactics are already an important driver of revenue and profits. Yet in a recent McKinsey survey of senior marketing leaders found that only 15 percent of CMOs believe their company is on the right track with personalization.
Similarly, taking a look at Sailthru’s Personalization Index, it states that personalized marketing results in a 6 to 10% increase in sales. Yet, according to McKinsey, retailers are investing an average of 0.7% of their revenues in personalization.
There seems to be a theme here. Personalization delivers results for companies who are utilizing it. Yet many aren’t (but are saying they are, or are starting to, or trying to start).
Of-course retailers are saying it’s a focus, because if it’s not then your brand will die right? Retail is a cold world! There are countless studies, articles, and blogs like this that talk about why you need to deliver a personalized experience, or your customers will leave you for your competition. For example, this chart from BCG below highlights the level of personalization, corresponding with the number of items purchased, the value of the average order, and net promoter scores. Everything is up and to the right, so if you’re a retailer and you see this, you put personalization high on the priority list.
There is one issue with that, which McKinsey explains in their article about the future of personalization. “Personalization is impossible if marketers don’t have the means to understand the needs of high-value customers on an ongoing basis.” Many marketers know that they need to personalize, but it is a matter of how, not why. The challenge for retailers is execution.
So how do you achieve this level of personalization? Let’s go through a few steps that can help.
Retail is a cold world out there, and personalization is the future of customer engagement. Whether it’s by starting small, partnering effectively, or understanding what customer data you have and what else you can leverage to boost engagement, there is no time like the present to start! If this is something on your 2020 agenda, we’d be happy to chat about what that could look like. If you don’t want to chat but are still interested, check out some of our resources on SessionM University!