Personalization Creates Relevance and Drives ROI

I always appreciate a handwritten card or letter. To me it seems more personal or sincere than a text or email containing the same words. I find it engages me more, I read it slower, and I remember the message longer. I appreciate the effort. It seems that consumers have a similar perception when comparing a personalized ad/communication to a generic one. In fact, according to a Yahoo study, when comparing personalized ads/communications to generic ads/communication, the study found that

  • 54% of consumers believed personalized communication was more engaging
  • 52% of consumers perceived that they were more likely to learn something new with personalized communication
  • 45 % of consumers felt personalized communication was more memorable

The fact that personalized communication creates greater perceived relevance or engagement, is important, given the growing body of evidence that consumers are developing unfavorable attitudes concerning poorly targeted or irrelevant communication.

Personalization has its risks though. One always needs to remain highly sensitive to the perception of invading a consumer’s privacy. Although, over 60% of the above survey respondents indicated that they were not opposed to having traditional marketing information collected.

According to a published Econsultancy report about 6 in 10 company marketers believed that personalized content is fundamental to their strategy. That being said, company marketers believe that the type of personal information impacts ROI .   The following chart illustrates the relative value that marketers place on specific data.

Data Type % of Companies Saying This Data Has High Impact on ROI % of Companies That Gather and Use This Data
Purchase history 74 38
User Preferences 70 45
Interactions with Brand History 65 32
Personal Data 54 65

The above chart also highlights an issue. There is a significant discount between the relative impact on ROI and the % of companies that are gathering the information believed to have the most ROI value. As an example 74% of companies believe that purchase history information significantly impacts ROI yet only 32% collect and use it. I believe this disconnect is driven by the plain fact that systematically collecting and validating this information is difficult.

How would a company collect this information? One alternative to accurately capturing this information is to start from scratch and invest in an integrated system that collects all information from various channels and at various points in the sales and marketing pipeline in a central depository and then create processes to cleanse the data. I’m unaware of a off the shelf integrated system available today that can achieve this objective. It would probably need to be a custom system and could be cost prohibitive. Over the last 15 years companies have invested in point solutions that solve an urgent pain point in the sales and marketing funnel and collects valuable data. Unfortunately point solutions create isolated data islands with limited capability to share information. It is not uncommon for companies to have numerous isolated data islands. An alternative to developing a custom system from scratch is building data bridges between the isolated data islands, hoping to create an integrated view of the consumers information. Due to architectural differences, data dictionary variations, lack of IT resources, and corporate politics on who should drive the effort, companies are struggling to effectively build the required data bridges. The cost of ownership in integrating, maintaining, and updating a system of data bridges between data islands is going to be extremely high.

An inadequate or disconnected infrastructure is risky because it will result in data integrity that is less than acceptable. Personalizing a customer communication with the wrong information is going to have a significantly negative impact on customer engagement.

A significant amount of infrastructure still needs to be developed to accurately capture and use personal information that consistently results in a high ROI. But when a company gets it right it can have a tremendous impact. An Econsultancy study of global company marketers indicated that since implementing a personalization program 32% of the companies in the survey experienced a major shift in search engine marketing conversion rates while 60% indicated a minor uplift.

When developing a personalized campaign it is imperative that the data is correct!! Once you are over the data integrity hurdle your campaign should ensure the following

  • The campaign inspires engagement or action
  • The personalization is noticeable
  • The communication is appropriately timed in the engagement cycle
  • The campaign is leveraging the consumers preferred communication channel


While hand written notes and letters may be becoming a bygone era, personalization is here to stay and in an ever more competitive world will have a significant impact on ROI and revenue growth rates. The question we all need to face is how are we going to collect, store, analyze, cleanse and use the information in a fashion that drives the highest ROI?