An international study, commissioned by TRACK and conducted by Forrester Consulting, shows:
- Companies who deploy a high degree of personalization are almost twice as likely to achieve a double-digit growth in sales.
- 85% of the companies surveyed struggle with consistent customer-oriented personalization
- Germany is lagging behind – with only 5 out of 61 top performers
Hamburg 21 July, 2022 – Everyone is talking about the value of personalization. But does it really make a company more successful? Findings from a recent study certainly paint a clearer picture. Companies deploying a high level of personalization are twice as likely to achieve a double-digit growth in sales. A consistent, personalized brand experience across all channels plays a decisive role. Most companies, however, are not really set up to do this. And they are still sending out mass communications via individually addressable channels. The resulting communication is largely irrelevant to the customers, and it tends to have a negative effect. Indeed, 78% of the companies surveyed thought they had already lost customers due to a lack of personalization.
These are the core findings of an international study conducted by Forrester Consulting on behalf of TRACK. 459 executives from different industrial sectors were surveyed – including finance, FMCG, retail, IT, healthcare, travel and telecommunications.
The results in detail
Everyone knows …
When business shifts to digital channels, there is no longer the direct and personal contact with sellers. Now it’s the job of marketing to take on this role. Customers get to experience this with the best companies, and it becomes integral to their expectations. The companies surveyed are very aware of this and 97 percent see personalization as a crucial factor to achieve their main business goals and for improving the customer experience.
… but they find it difficult to implement
One of the greatest challenges faced by 85 percent of those surveyed is addressing customers consistently across all channels. 41 percent of companies implement personalization but only in specific channels – and their efforts are effectively siloed. Over 80 percent either have too much and/or too little data, and they lack the analytical resources to evaluate it and/or the creativity to implement personalization in a manner that’s relevant to their customers.
How is Germany doing?
When it comes to personalized marketing activities, an international comparison suggests that German companies are still lagging behind. Ten of the 69 companies with insufficiently personalized marketing activities are from Germany. By contrast, only five German companies are in the group of 61 top personalization performers. To keep pace with international competition, Germany must recognize the need to catch up.
The customer perspective separates the wheat from the chaff
It’s not just data and technology, however. When it comes to personalization, it’s clear which companies have really established an approach that’s fully focused on their customers. While there are those who continue to plod along with a vague mix of traditional marketing activities and campaign metrics. For companies deploying a high degree of personalization, the decisive criterion for success is customer lifetime value. Above all, these companies understand that effective personalization depends on consumers’ needs and the context in which it takes place.
Phillip Schilling, CEO of the TRACK agency (in Germany), is in no doubt:
“Personalization in the interaction between brand and consumer is much more than just greeting the person by name and the Next Best Offer. It may be individualized, but it’s not customer centric. There is certainly the right moment to make an offer in the customer journey, but effective personalization recognizes that context and has the empathic ability to address the consumer’s need in other moments as well. These skills will become essential for all companies with a direct customer relationship in the future.”
He is also critical of the current understanding of personalization.
“It’s not enough just to invest in and implement a platform. Almost everyone has some kind of automation tool these days, but anyone who equates that with personalization still has not grasped the expectations of consumers. Good salespeople know, of course, what they can sell to customers. Above all, they know how to adapt to them. And personalisation has to meet these high standards.”
The study design
In March 2022, 459 executives representing international corporations (more than US$ 500 million in sales per year) from eleven countries were surveyed. These included Germany, Australia, France, Canada, New Zealand, the UK, and the USA. They came from different industries such as finance, FMCG, retail, IT, healthcare, travel and telecommunications.