What Are Personalization’s Biggest Challenges and Opportunities?

Experian-Challenges-With-Personalization-July2014Personalization is an area of growing importance, recently found to be US digital marketers’ most important future area. Yet research indicates that marketers continue to struggle with it, and many industry respondents have trouble linking data to individual customer profiles. A couple of recent studies – one from Experian Data Quality [download page] and the other commissioned by Janrain [download page] and conducted by Forrester Consulting – take a closer look at the use of personalization and its associated challenges.

Both studies find that personalization tends to be in its early stages, with some respondents still limited to a single-channel approach. According to the Janrain study, which was fielded among “190 IT and digital marketing professionals with responsibility for personalized/targeted messaging and digital customer identity and recognition” across 4 countries, problems with data management are holding back greater sophistication of marketing personalization. Asked to rate the level of complexity with various customer data management activities, respondents indicated that analysis is their most difficult, with 44% rating the activity challenging or very challenging. Data collection followed close behind, with 43% rating it challenging or very challenging.

The Experian survey – fielded among 250 US respondents from a variety of functions, all of whom have knowledge of data management practices – yielded similar conclusions. The biggest challenges with personalization cited in the study are gaining insight quickly enough (40%), having enough data (39%), and inaccurate data (38%). Interestingly, fewer respondents complained of an inability to gain insight from data, suggesting that many are able to extract relevant insights, but not as quickly as they’d desire.

One of the key problems noted in the Experian survey relates to linking information across channels. For respondents, the main challenges in achieving a single customer view are:

  • Inability to link different technologies (40%);
  • Poor data quality (34%); and
  • Lack of relevant technology (32%).

A recent study from Econsultancy and Tealium also found global marketers to have widespread difficulties achieving a single view of the customer: only 14% of respondents said they had a strong capability in this area, despite 47% agreeing that their long-term success depends on it. That study pointed to data unification initiatives as a potential solution. Those respondents with such an initiative (BI, cloud, common visitor file, etc.) were far more likely than those without one to report an ability to associate marketing activities with financial results, turn data into useful information and action, and make the most of the tools they have.

While there are numerous challenges inherent with personalization, it holds much promise across various channels and processes. Among those respondents personalizing today, per the Experian study, the most common channel is the website (80%), followed by email (76%), although email is the most popular among respondents in the marketing department. Correspondingly, respondents to the Janrain study noted that customer profile data is most important to website and email marketing functions.

Not surprisingly, customer engagement is the top reason cited for prioritizing personalization, finds Experian, with revenue generation, prospect conversion and brand integrity also important. Meanwhile, the types of processes improved by personalization range from customer prioritization (69%) to cross-sell or up-sell offers (63%) and the relevance of loyalty offers (58%).

For respondents to the Janrain study, personalization efforts have the highest impact on awareness and acquisition metrics, though they also have a significant impact on retention and loyalty metrics.

Looking forward, study participants indicated that they were most likely to have or build the following capabilities to deliver personalized and orchestrated customer experiences across channels:

  • Unified login and registration process across digital properties to recognize customers (94% implementing or planning implementation);
  • Data and analytics capabilities to mine customer data for targeted insights (also 94%); and
  • Customer profile data management capabilities to collect, store, manage, and analyze customer profile data (also 94%).

About the Data: In June 2014, Experian Data Quality commissioned a research study to look at current approaches to personalization. There were 250 respondents in the U.S. that took part in the research, produced by GMI for Experian Data Quality. Individuals in marketing, data management, customer service, IT, sales, finance, management and operations departments all took part in the survey who had knowledge of data management practices. Small to large enterprise businesses were included. These individuals came from a variety of industry sectors, including manufacturing, automotive, retail, financial services and travel responded to the survey.

In the Janrain study, Forrester conducted an online survey of 190 IT and digital marketing professionals with responsibility for personalized/targeted messaging and digital customer identity and recognition efforts in various consumer- facing organizations in France, Germany, the United Kingdom, and the United States to evaluate marketers’ current practices, attitudes, and future plans regarding marketing personalization and customer identification. Survey participants included decision-makers in digital marketing strategy or technical roles. Questions provided to the participants asked about their marketing objectives, priorities, investments, satisfaction, and perceptions as they pertain to personalization and targeting. Respondents were offered a small incentive from their survey panels as a thank you for time spent on the survey. The study began in February 2014 and was completed in May 2014.