Study: 93% of companies with a personalization strategy boost revenue
Ninety-three percent of businesses with advanced personalization strategies increased their revenue last year, according to a new study from personalization software company Monetate and WBR Research.
The study, based on a survey of 600 senior marketers in North America and Europe from the retail, travel and hospitality, and insurance sectors, also found that 77% of businesses that exceeded their revenue goals in 2018 have a documented personalization strategy, while 74% have a dedicated budget for it.
In addition, brands that exceeded their revenue goals created personalization-specific financial incentives for their organizations almost 50% more often than those that did not realize their 2018 revenue expectations.
Retail was just one of several industry segments mentioned in this study, but the findings indicate that retailers and brands that dedicate resources to personalization strategies are more likely to see a payoff on marketing programs where personalization is key. Further proof is found in the detail that 86% of the companies that achieved higher return on investment themselves said that personalization activities accounted for 21% or more of their marketing budgets.
Among other findings, companies reporting the highest ROI from personalization programs were shown to be twice as likely to name customer lifetime value as a primary business objective than those who achieved lower ROI. This suggests that viewing personalization as a long-term, ongoing goal is more productive than viewing it as the means to making a sale, or as a one-off opportunity to increase revenue from a specific product.
Retailers may be among those taking the long-term view, as many of them over the last year have started to upgrade their customer loyalty programs to make them more benefit-packed programs, closer to the membership model of something like Amazon Prime.
As companies continue to pursue personalization, a major challenge remains — the need to build sustainable data architectures, the study found. Companies are starting to understand the value of collecting quality data on their customers, but may still have trouble creating the structures for processing, analyzing and reporting the insights from that data.