CMOs: Personalized Communications Not Measured, Underutilized, Under-Tested

March 5, 2008

This article is included in these additional categories:

Analytics, Automated & MarTech | B2B | Data-driven | Personalization

Inadequate customer data is the key obstacle facing top marketing executives in their adoption of personalized communication techniques, according to findings from “The Power of Personalization” global survey, issued by the CMO Council.

cmo-council-personalization-key-challenges.jpg

About half of the chief marketing officers surveyed report having only “fair” to “poor” knowledge of their customers, complicating campaign design and implementation.

Moreover, a surprising 38% of survey respondents said they didn’t even know whether personalized communications had outperformed traditional mass marketing tactics.

Nevertheless, more than 55% of respondents plan to allocate 10% or more of their marketing budgets toward personalized communications in 2008, despite the reluctance to declare past personalization efforts successful.

Additional Findings

  • Despite marketers’ increasing interest in personalized communications techniques, levels of adoption are relatively low – 43.5% indicated only a “low” usage of personalized communications in their customer acquisition and relationship management programs:

cmo-council-personalization-current-extent.jpg

  • 55.1% of respondents said they plan to increase their 2008 marketing budget allocations for personalized communications by more than 10%.
    • Another 25.3% said they plan to allocated more than 20% of their marketing budgets to personalized communications.
    • Another 21.8% said they were undecided on allocations.

cmo-council-personalization-2008-budget-allocation.jpg

  • In terms of gauging the success of personalized communication initiatives, top measures of program success included conversion and close rates, quality and volume of leads, customer feedback, email opening and forwarding rates, and website traffic and pageviews.
  • Data issues are central to the challenge facing marketers that are embracing personalized communication strategies (see first chart, above):
    • 49.1% of respondents blamed “inadequate systems and infrastructure” for limiting personalized communication initiatives.
    • “Lack of customer data and insight” and “cost and complexity” were also cited as major contributing factors, by 46.2 and 43% of respondents, respectively.
  • Among the company divisions maintaining data used in personalized marketing initiatives:
    • Sales and customer relationship management (47.8%)
    • Marketing and research groups (40.4%)
    • Customer service and support (30.1%)
    • IT organization (28.4%)

Winning Strategies for Personalized Communications

  • Those surveyed by the CMO Council also identified key methods that their companies use to better reach their target market through personalized marketing initiatives:
    • Individualized emails and letters (top choice, with 66.1% of respondents saying they utilize)
    • Opt-in, permission-based marketing programs (46.5%)
    • Targeted database marketing leveraging personal profiles (43.5%)
    • Personalized email promotions based on timing of signup and regular intervals thereafter (40.1%)
    • Print on-demand collateral incorporating personalized content (30.5%)
    • Variable Data Printing (VDP) (31.6%)
  • Marketers see the best personalization opportunities in email and web content delivery, with 52.3% choosing email campaigns among their “top three” opportunities and 38.8% choosing web-content programs.
  • Respondents said the top benefits of personalization included making offers more relevant and meaningful to prospects, building closer relationships with customers and increasing the company’s overall marketing effectiveness.
  • In creating personalized communications initiatives, respondents cited the customer’s purchase history as their chief consideration (46.8%), with value/profitability of relationship and type of customer (individual or business) second and third (41.7% and 40.8%), respectively.
  • The number of respondents using personalized URLs (PURLs) only constituted 25.6%, but an additional 22.1% claimed to have tested, but not incorporated, PURLs – more than any other personalized communications tool.

About the study: More than 700 senior marketers worldwide participated in study, which explored the various effects of customized content, collateral and personalized web interaction on marketing effectiveness, customer acquisition, retention, and business outcomes. “The Power of Personalization” research initiative was cosponsored by Xerox, Pitney Bowes, GMC Software, Valtira and MindFireInc. The Direct Marketing Association and Print on Demand Initiative (PODi) served as fielding partners for the study, along with media partner CRM Magazine. Promotional support was provided by InfoTrends.

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