64% Of Marketers Say a Lack of Budget Is a Barrier to Personalization

Personalization has become extremely important for brands to attract customers and have a competitive edge over the last few years. But where does marketing personalization stand today? To understand this, ClickZ and MoEngage recently conducted a study. Check out the findings from the study.

Personalization is crucial for businesses to survive, grow, and have an edge against their competitors today. About 62% of respondents of a recent Statista surveyOpens a new window said that companies delivering non-personalized content would no longer have their loyalty. Further, many consumers are willing to share their email IDs or other personal information with brands to receive more customized offers. So, where is marketing personalization headed today?

To understand the current state of personalization, ClickZ, in partnership with MoEngage, conducted a study. A key finding from the study was that only 34% of directors and marketing executives were very satisfied with their personalization efforts and results. The following are a few more insights in detail.

Businesses Are Focusing on Email and Content Personalization

The study showed that emails and content are where most businesses are focusing their personalization efforts, with 69% and 56% using these channels, respectively. These two channels are followed by web pages (35%). While only 18% said they aren’t doing any personalization, there are clear areas of improvement. For example, channels like web pages and product recommendations aren’t fully capitalized. Further, 18% of respondents not doing personalization despite benefits is an opportunity for improvement.

See more: Brands Prioritize Tech and First-party Data To Achieve Personalization

Many Are Not Satisfied With Personalization Efforts and Results

While many marketing teams do marketing personalization, the study found that 34% rated their personalization efforts and results at 4 or above on a scale of 1-5. A survey by McKinseyOpens a new window in 2019 showed similar results, with only 15% of CMOs satisfied with their personalization efforts. 

There are certain challenges marketers face in achieving personalization successfully. For example, 35.5% of respondents feel a lack of data analysis and understanding is the most significant barrier to achieving personalization. 

The inherent uncertainty also extends to the ability of the business to identify whether personalized marketing is working. The study also showed that less than 50% of respondents’ teams conducted either customer surveys or elicited feedback to determine their personalized marketing campaigns’ success.

How marketing teams assess the success of personalized marketing

Source: ClickZ and MonEngage surveyOpens a new window

However, the problem is that even such surveys don’t guarantee that usable and actionable insights will emerge, as over-optimistic managers can sometimes oversee the clearest signals of dissatisfaction. 

Marketers shouldn’t treat complaints as something different. They should be used as part of the overall customer feedback system. One way to do it is to use marketing analytics and customer insights, so marketing teams rely less on unreliable customer feedback and can hone in on what customers do instead of what they say.

Marketers Face Barriers To Progress

There are several barriers to progress marketers face regarding personalization, such as a lack of skills and knowledge. However, the three biggest obstacles are:

• A lack of budget (64%), which is probably also reflective of a lack of real interest from managers outside the department
• A lack of visibility and actionable data (42%), with particular problems over the timely availability of data to enable meaningful decisions
• The inability to move fast (41%), with organizational hierarchies ill-suited for making agile decisions. An excess of tools also tends to exacerbate challenges.

Most significant barriers to achieving successful personalization

Source: ClickZ and MonEngage surveyOpens a new window

The study showed that these challenges are persistent even among businesses starting the personalization journey.

Businesses Are Satisfied With the Customer Data Quality

While 42% of marketers feel a lack of visibility and actionable data is a barrier to progress, there is a surprisingly high level of satisfaction regarding the quality of customer data held by businesses. Almost 70% of respondents were moderately, highly, or extremely satisfied with their data quality. 

In some cases, this may be a case of not knowing what a business is missing in terms of data. For example, most companies may have basic demographic information like age, gender, or email ID. This data can sometimes be good enough. But advanced data, such as circadian rhythm, can provide information on whether a user will be more receptive to an email at a particular time.

Using marketing analytics in combination with A/B testing that helps them develop a culture of continual experimentation allows marketers to be far more proactive in their work. 

Timeliness Is Critical for Personalization

A long time ago, it was enough if data was accurate, irrespective of how long it took to produce. Now, it is also necessary that the data is timely, as this leads to the right insights. The study indicates that speed and accuracy are not happening in many companies. About 40.2% of respondents said that the inability to move fast and create personalized campaigns was the biggest barrier to successful personalization. Further, over 50% said converting data to action could take weeks or months. 

For the customer segments marketers create to be useful, they should have sufficiently timely data to reflect the reality for customers. Any lag between their lived reality and the data held with the business leads to poor customer experiences.

Investments Are Increasing in Personalization

The good news, according to the study, is that businesses are investing and intend to invest more in marketing technology and programs to improve personalization. Many marketers indicated that investments from their organizations have already increased this year compared to last year. And the level of investment would increase in 2023. 

Further, there is a clear focus on investments in automation and customer data management. But the most common form of investment remains in email marketing. According to the study, 67% of respondents currently invest in email technology. That said, only 33% invest in any form of AI-based technology.

Kinds of marketing technology companies are currently investing in

Source: ClickZ and MonEngage surveyOpens a new window

Marketers who can use AI tools and integrate their data with these tools effectively are more likely to have an edge in serving customers. 

While the personalization-specific tech was only focused on by 49.5% of respondents, a few interesting insights emerged. For example, SMS messaging, chat apps, and mobile in-app marketing score highly, indicating a clear focus on mobile as a platform to engage with customers. Despite the growth of omnichannel platforms, there is a clear sense that marketers choose to focus on a single channel at a time instead of spreading their investments broadly.

See more: 3 Things Stopping Marketers From Achieving Personalization Goals

Conclusion

It is clear the pandemic has changed consumers’ digital habits and expectations of brands. Fundamental to this is the desire for their interactions and the offerings they receive to be as personalized as possible. To make this happen, brands must utilize technology effectively to collect the necessary data to understand the customer and provide tailored offerings at the right place at the right time. This requires businesses to invest diligently in technology and tools to automate processes and assist the workforce. It is imperative that brands don’t delay their investments as consumers are increasingly becoming selective in where they buy. 

It is inevitable that brands that provide data-driven and personalized services to their customers will emerge ahead of the pack in these uncertain times.

What steps have you taken to achieve personalization as consumers’ preferences and behaviors continue to change? Let us know on FacebookOpens a new window , TwitterOpens a new window , and LinkedInOpens a new window .

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