The Money's On Personalization: Brands Are Spending On It, But Face Hurdles: Forrester

Almost a third of consumer brands say personalization is a top priority this year. And another third will start initiatives over the next 12 months. 

But they face many hurdles, including inaccurate data and concerns about privacy, according to a study titled Put Identity Marketing In The Center Of Your Personalization Initiative. The study by Forrester Consulting was commissioned by identity marketing firm SheerID.

Only 31% of the firms surveyed are now fully compliant with GDPR and CCPA. But 31% are rolling out a privacy plan, and 34% have a strategy they have not yet implemented.

Moreover, 85% want to be leaders in establishing customer trust. Yet 82% say consumer privacy concerns are affecting the results of their personalization campaigns. That has not stopping them from trying. 

Forrester surveyed 210 B2C marketers in the retail, travel and hospitality, software and subscription and retail banking industries in the U.S. Of this sample, 41% are now investing in personalized email messaging, and 18% plan to use personalized email messaging.



But more dollars are flowing into other marketing activities. For instance, 52% are spending on personalized offers/coupons/promotions (some of which must be delivered by email). 

In addition, 45% are putting resources into personalized web/mobile experiences an 44% into personalized product recommendations. Only 25% are betting on in-person/face to face experiences.

Looking forward, 41% plan to allocate money for personalized loyalty programs, 40% for personalized pricing and 39% for personalized value propositions such as free shipping and exclusive local events. 

The most common way to acquire customer data -- cited by 47% -- is through product preference data from mobile apps. And even more -- 53% -- rate this as critically useful.

In another finding, 51% say information from self-attested data preference centers is critically important. However, only 28% use it.

Third-party email lists are used by 36%, and 35% see them as critical.

At the same time, firms are unsure of the accuracy and utility of their customer data. They are very confident that:

  • Customer data is secure — 49%
  • The data that they collect is meaningful to the customer — 43%
  • The data they are collecting about their customer is accurate and a true representation of the customer — 39%
  • Their data collection/intelligence practices are privacy-friendly and build trust with the consumer — 36%
  • They have a deep understanding of who their customers are and can connect the identification of the customer to their needs — 31%
  • They do not have any duplicate records in their customer data — 28%
  • Their customer data is complete — 19% 

Forrester warns that consumers “do not define themselves by elements such as age, gender, and zip code. Seeing their name on an email or home page won’t cut it either." And it recommends that companies: 

  • Redefine what constitutes defining customer attributes
  • Establish and execute privacy policies and practices that serve both consumers and the company
  • Establish trust by taking action on data that consumers serve up willingly
  • Institute relevant identity marketing strategies to resonate with target markets
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