Bernard Chung, Senior Director, Global Solution Marketing, SAP Hybris, provided insights into personalization and what it takes to launch a personalized marketing strategy during a Thought Leadership Spotlight to Argyle’s CMO membership at the 2016 Chief Marketing Officer Leadership Forum: Spotlight on Retail and Consumer Goods & Services in New York on April 13. In his presentation, “Rethinking Personalization,” Chung explained why he believes marketing today “is broken.”
According to Chung, many consumers are bombarded with irrelevant messages from marketers day after day. On average, an American adult is exposed to more than 5,000 ads or brands per day. But the majority of these exposures are designed to connect with as many people as possible without delivering a personalized message.
“We need to do better as marketers to help drive growth and revenues for our organizations,” Chung said. “And the good news is that we can.”
Thanks to personalized messages, a business can engage its target audience consistently.
Personalization is powerful because it empowers a company to provide each customer with an individualized experience. Rather than send a broad message to a large group of consumers, a business that is committed to personalization can target the specific needs of an individual, work with this consumer and ensure that this consumer’s needs are met at all times.
So what is personalization exactly? The definition varies among businesses and consumers.
For example, a recent study indicated many marketers rated their ability to deliver personalized customer experiences as good or very good. On the other hand, the majority of consumers in this study disagreed and said they believed marketers failed to meet their individual needs consistently.
“There is obviously a gap between what marketers think that they are doing versus what the end consumers are currently experiencing,” Chung noted. “That gap exists not because of lack of focus on the topic of personalization.”
Personalization remains a top priority for many marketers, yet the majority of marketers lack the ability to identify customer intent and respond to this intent on a real-time basis. And for the most part, marketers fail to understand their customers beyond basic demographics, too.
“Two out of three times, your personalization is wrong.”
Instead, marketers need to rethink personalization and ensure they are able to optimize all of the resources at their disposal to provide personalized customer experiences.
“As marketers, we really need to look at the capabilities we have in house to be able to do personalization,” Chung recommended. “We need to rethink the strategies that we have in doing personalization.”
Personalization is evolving, and today, it is being done at the consumer level.
In the past, many businesses would try to personalize at the segment level, but this proved to be ineffective.
For example, Chung pointed out that segment-based personalization could result in the creation of a “minor majority” among consumers who are interested in a particular product or service. And in this scenario, only a small portion of consumers may be interested in a specific offering. Conversely, a larger majority of consumers will continue to receive targeted messages promoting this product or service, regardless of whether or not they are interested in a specific offering.
Thus, a business may fail to connect with the right consumers if it leverages a segment-based approach to personalization. It also risks alienating its consumers and driving them to rivals.
“Two out of three times, your personalization is wrong,” Chung pointed out.
Businesses need to avoid the temptation to base personalization on a customer’s past interactions.
Chung pointed out that trying to personalize an individual’s experience based on similar consumers remains ineffective as well.
“There is obviously a gap between what marketers think that they are doing versus what the end consumers are currently experiencing.”
Understanding the customer at the individual level and at the moment of engagement is paramount for today’s businesses. By doing so, a business will be able to interact and react to customers and provide them with relevant offers in real-time.
“As we engage with people, we use verbal and non-verbal cues to understand and to communicate and to engage in a conversation,” Chung said. “The concept of individualized personalization needs to be similar to that approach.”
Ultimately, businesses must be able to listen to the explicit signals from consumers as well as implicit signals that are more discreet.
Explicit signals typically provide marketers with insights based on customers’ past behaviors. Having the ability to identify these signals offers value to businesses by enabling them to understand whether consumers were interested in their products and services in the past.
Comparatively, implicit signals such as social sentiments provide insights into customer behaviors and trends. They provide substantial value to businesses, empowering them to recognize their customer needs and work toward delivering effective support.
Going forward, businesses must be able to identify both explicit and implicit signals to provide their customers with individualized personalization. And companies that can respond to their customers in real-time and offer pertinent offers to them will be able to improve their marketing efforts, both now and in the future.
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