Consumers have little patience with brands that either do not personalize their marketing or do it badly, judging by "The value of getting personalization right — or wrong — is multiplying," a report by McKinsey.
Of the consumers polled, 71% expect personalization, and 76% get frustrated when it’s not there.
Moreover, loyalty is up for grabs, with 75% of consumers having exhibited new shopping behavior during the COVID-19 pandemic.
This wrap-up of McKinsey research shows that consumers want brands to show they know them on a personal level. That is done through actions like these, most of which can be accomplished in email:
These types of personalization can influence buying behavior throughout the entire customer life cycle, the report continues.
For instance, 78% of consumers are more likely to refer brands that personalize to friends and family. And 76% are more likely to consider purchasing and 78% to repurchase.
Who’s good at it? Digitally native brands. These firms own customer transactions and product development and use first-party data in their decision-making.
In contrast, brick-and-mortar retailers (of groceries and apparel, say) tend to own customer transactions but not product development. And first-party data is captured but mixed.
Finally, brands without direct relationships with consumers (e.g., CPGs) typically do not own customer transactions, and have limited access to first-party data.
As if it needs to be argued, McKinsey notes that personalization drives performance and better customer outcomes. Fast-growing firms derive “40% more of their revenue from personalization than their slower-growing counterpoints,” the authors write.
The authors are: