The opportunity cost associated with forgoing your personalization plans
Failing to adapt to increasing consumer expectations comes at the expense of data, knowledge, technology, teams, customers, and most all of all, revenue.
Over the past few years, we’ve seen once big-time brands such as Blockbuster, Sears, and Toys R Us all shutter operations, unable to keep up with innovative competitors better prepared to address the needs of a growing digital-first world.
Failing to adapt to the changing behavior of consumers, Blockbuster’s iconic movie rental business succumbed to the superior experience of video streaming, and big-box retailers proved unsuccessful in matching the convenience and novelty of online shopping.
Sustainability in today’s consumer landscape means rethinking outdated approaches to the customer journey and continuously iterating upon them. Because as expectations rise, businesses can’t afford to maintain the status quo – it’s all about delivering on tomorrow, when people have already come to normalize today’s offering. A harsh reality not guaranteed to even the most successful disruptors of our time.
It’s why we’re seeing giants like Netflix and Amazon not simply resting on their laurels, but rather turning to strategies like personalization in order to better meet the unique needs of their customers.
Not your grandma’s marketing
Consumers, now increasingly reliant on technology, value relevance, efficiency, and joy above all else, severing ties with brands whom once they shared a loyalty to in the face of unmet demands. An entirely new battleground, according to Gartner, 81% of marketers expect to be competing solely on the basis of customer experiences in the coming years. With its ability to deliver on all three promises, personalization has subsequently increased in importance, ascending the throne as a top strategic priority within the larger business strategy.
Those who ignore the current world order do so at their own peril, as poor or lacking personalization efforts reportedly led to 41% of consumers switching companies, costing organizations $756 billion in 2017. Leaving money on the table is no longer the argument for a tailored customer journey; it’s about the shallowing of pockets, which is why it’s so imperative personalization plans get underway as soon as possible among late-stage-adopters.
The window of opportunity is closing
The marketing technology space has become so oversaturated, often making it difficult for decision-makers to discern the hype from the must-haves when it comes to prioritizing and applying new strategies.
Using Gartner’s Hype Cycle for Digital Marketing and Advertising in 2018, businesses can easily visualize the most effective timeframe for personalization adoption. Currently plotted entering the Slope of Enlightenment, personalization is at its greatest point of potential. This window of time is marked by early stages of mass adoption whereby businesses who wait not only lose their competitive advantage but also fall further behind the pack.
Personalization has already achieved significant validation in industries such as eCommerce, travel, gaming, and now financial services. And it will keep gaining commercial viability.
The repercussions of waiting
Given what we know about the future of personalization, the more time passes, the greater the cost of not having committed – the impact of which can have serious repercussions. Here are a few areas where brands will end up paying, which will steadily compound over time.
When contemplating whether to invest in personalization, it’s easy to let the cost of entry overshadow the benefits that come with adoption – continuing to produce at the same rate reduces the amount of unknown risk. However, given how personalization has proven to lower acquisition costs by as much as 50%, generate revenue uplifts of 5-15%, and increase the efficiency of marketing spend by 10-30%, the payoffs of a more individualized approach are not uncertain. The tradeoff of not personalizing experiences, therefore, increases the cost of doing business, with foregone profits resulting in unnecessary overhead and missed opportunities to innovate. And as competition in the field grows, these potential profits will soon begin to erode, reducing the gains associated with early adoption.
With every moment spent not innovating and revamping strategies from the top down, businesses leave space for other organizations to step up and take the reigns. As competitors integrate personalization more deeply into their workflows, the potential for positive results increases. They will have the ability to test, perform, fail, learn, and iterate, constantly improving experiences and witnessing the impact of their efforts in real time. And with each successful experiment, they will relentlessly lunge forward, leaving you in the dust. However, choosing to capitalize on this moment will allow organizations to close the competitive gap and regain their respective market share.
As with most investments, deferring contributions will only force you to make payments at a higher rate later in the game in an attempt to catch up. Even despite a massive investment, you can’t make up lost time and the learnings that come with it. A steeper learning curve will still create greater barriers to entry. However, choosing to invest in personalization before competitors enter the mainstream will give an organization the time and space for experimentation, from which you can then derive learnings that shape and mold a stronger overall strategy.
Delaying investments in personalization will only steepen the learning curve, increasing the likelihood for error and requiring more time, effort, and resources as time goes on.
Businesses who are just beginning to tailor experiences are likely being met with some frustration upon realizing the baseline for customer expectations continue to rise despite their sincere efforts to modernize. And those already delivering an amazing CX know that in order to satiate a customer who grows more demanding by the minute, the innovation never ends. While implementing these experiences can’t happen overnight, the faster brands move, the faster they’ll be able to reduce the number of consumers exposed to generic, underwhelming, and dissatisfactory experiences with your brand. Even marginal improvements can have a significant influence on the customer journey.
Costs dig deeper than just into your pockets
While the cost of forgoing personalization can be detrimental to economic profit, businesses pay consequences that extend far beyond revenue; the negative effects trickle down to the tech stack, data, team, and your customers.
Choosing to not personalize perpetuates the delivery of fragmented experiences. One of the biggest benefits afforded by a unified personalization platform is its ability to create a cohesive customer journey based on all available data. Without an omnichannel vantage point, businesses will have to accept poor customer engagement and even the loss of once-loyal customers.
With more touchpoints than ever, these days, businesses sit atop mountains of data. But the difference between executing average versus stellar experiences is the ability to effectively use this data. Without a personalization platform to leverage it in real time, campaigns built to target audiences become less and less relevant as consumer behavior evolves, producing low-yielding results while driving up acquisition and retention costs.
A breakdown of the various levels of digital maturity and how you can level up no matter where you are on your journey with personalization
For many, the tech stack includes an abundance of point solutions. These are often black boxes, rendering data (entirely) useless in improving the customer experience, a major challenge marketers face in their day-to-day. A disjointed marketing stack can also create silos among teams, creating inefficiencies in workflows, making it nearly impossible to launch new campaigns and initiatives or experiment with different personalization examples. However, investment in the right personalization solution can help organizations more easily control the customer experience with a more cohesive and nimble tech stack.
In a highly competitive market, acquiring and retaining new customers has become all-the-more difficult. Without the power of personalization, eCommerce teams are put under increasing pressure to hit goals – turning to other, less impactful strategies for achieving results. Met with underwhelming performance, not only does team morale drop, but also the ability to forecast a bright future. A fresh digital strategy not only helps invigorate current employees, but it can also attract new, high-quality talent to the mission of winning and nurturing customers. Plus, training a team on the latest in marketing tech can lead to long term benefits, including the ability to spot other emerging opportunities to take the business to the next level.
Don’t march backward into the future
Businesses need to learn how to adapt if they hope to sustain success, and that simply can’t happen if they aren’t able or refuse to see what’s right in front of them. The personalization opportunity of today will soon become a requirement for tomorrow, which is why it is so important to get started, now. As not doing so comes at the expense of so much – data, knowledge, edge, technology, teams, customers, and most all of all, revenue.