Email Is A Top Personalization Tool, But ROI Is Hard To Prove: Study

Brands are aggressively using email as a personalization tool, especially in North America. But contrary to other reports, email ranks only sixth in delivering ROI with personalization, although that may be because the metric is difficult to measure, according to The Age of Personalization, a survey by Harvard Business Review Analytic Services, sponsored by Mastercard. 

North American companies lead the way, with 56% using email for personalization, compared with 47% in Europe and 42% in Asia-Pacific.

The second most popular tactic is product offerings and recommendations, utilized by 54% in North America, 56% in Europe and 44% in Asia-Pacific.

Social media is fourth, just behind the in-person customer experience. Among North American firms, 46% use social platforms, compared with 50% in Europe and 39% in Asia-Pacific.

However, only 21% say email delivers the highest ROI on personalization, and 12% expect it to do so by 2010. It is tied on current ROI with pricing strategies (e.g., dynamic pricing online) and social media. But those tactics beat email on ROI expectations for 2020. 



In contrast, 39% say product offerings and recommendations now deliver high ROI. And that is followed by in-person customer experience (34%) and online customer experience (22%).

Email’s poor showing on ROI may be because a small minority can “calculate return on investment for specific personalization tactics,” the study notes.

Specifically, “about a third say they can do so or the in-person customer experience, product offerings and recommendations, and pricing strategies,” the study states. “Only about a quarter or less can do it in most other areas, including marketing via email print, and events.”

Of those polled, 56% say they are at the table stakes stage, or starting point, “whether they’ve personalized their own activities in that area or not.” But emails tops all other channels, including print media and social media, with 47% apiece.

In addition, 49% say email marketing is a top personalization focus today, second only to product offerings and recommendations (52%). However, a mere 26% say email delivers a competitive advantage, vs. 35% for social media.

At 47% apiece, technology and healthcare companies are the sectors most likely to deploy email for personalization, and financial services slightly less so. But those groups are more prone to use product offerings and recommendation as a personalization tactic, followed by the in-person customer experience 

Of the firms surveyed, 25% say personalization has increased their revenue from 7% to 10%, while 13% report it has risen by 10% to 24% and 6% say it has risen by more than 24%. But 32% have seen no increase.

The survey also found:

  • 90% say customers expect them to know their interests and anticipate their needs
  • 80% say personalization is key to their corporate strategy 
  • Over 50% feel personalization is an important contributor to revenue and profits, and 81% say it will be so in 2020
  • 54% say their firms place high priority on investing in personalization.

HBR surveyed 625 respondents from its readership pool.



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