Personalization is now the key to ROI -- especially among retailers, according to the 2019 Personalization Development Study, a report by Monetate.
Of the firms polled, 79% of retailers are deriving ROI from their personalization efforts, along with 72% of travel & hospitality firms and 70% of insurance providers.
And 68.8% of all firms have a documented personalization strategy. That includes 77% of those that exceeded their 2018 revenue expectations.
In addition, 74.2% of those that surpassed their goals have a dedicated budget for personalization, compared to 51.8% of firms that fell below expectations. And of brands enjoying high ROI -- defined as 2X or greater -- personalization receives at least 21% of their marketing budget. For 14%, the spend is over 40%.
Email is the most widely used channel for personalization, cited by 94.2%. Social is next, chosen by 82.7%. Website apps are third (73.3%), followed by mobile apps (50.8%), ad networks (45.7%) and call centers 31.7%,
Email activity also ranks high as a data source, with 88.1% of retailers using it for that purpose versus 86.3% of travel & hospitality marketers and 87.1% of insurance brands.
The only data source that tops email, if only among retailers, is purchase history.
In contrast, 37.7% of retailers use third-party data, as do 22.1% of travel firms and 14.7% of insurance suppliers.
The primary goal they measure is Increasing customer loyalty — that’s true for 44.4% of businesses with 3X ROI and 29.4% with 1X ROI.
Second is building customer lifetime value — 22.2% of the high-ROI brands do so. Another 30.9% want to increase ADV. And 19.1% want to build conversions. Only 11.1% of the leaders set a goal of reducing their bounce rate.
The biggest hurdle in both Europe and the U.S. is building a sustainable data architecture, and that’s particularly true of retailers. A very close second — in Europe — is integrating third-party data. That could be because of GDPR.
Marketers are also challenged by data quality, determining what to personalize in what channel, and creating compelling offers and content.
The study also found that 78%of firms with a full or partial personalization strategy enjoyed revenue growth, and only 1.5% suffered a loss.
In addition, 93% of those with an advanced strategy saw growth, and none reported a loss. But only 45.4% of brands without a strategy experienced growth, and 52.5% posted a loss.
Finally, 23.2% already invest in machine learning, while 48.5% plan to within a year.
Monetate surveyed 607 marketing executives.