How to unsuck at personalization

personalizationGood news for email marketers: according to research from the Direct Marketing Association (DMA), the typical email engagement rates are going up. US open rates of house lists rose 2.6% over 2010, and click-through rates grew with 1.1% in the same period. Personalization seems to play an important role in this growth however not all is well: conversions drop. Regardless of the channels, many businesses still suck at personalization. Here’s why and how to unsuck.

Let’s get back to the DMA results. As such the numbers may seem small but then again, consumers have more channels to interact than ever before, don’t they? Marketers know that email is still doing good. In numerous reports they rank it as the channel with the highest ROI and best performance in many stages of the customer life cycle and lead management process.

US Email conversion rates 2012 - DMA via eMarketer

US Email conversion rates 2012 – DMA via eMarketer

In a review of the research, eMarketer writes that the advances in marketing automation and data segmentation over the past two years undoubtedly play a role in the fact that email open and click rates keep doing well, despite changing consumer behavior, increasing media proliferation and whatnot. Of course, there are differences depending on the recipient segments: demographics, behavior etc. all play a role.

Marketing automation and data segmentation have led to more personalized and relevant email marketing programs, eMarketer says. And this is reflected in the increased engagement rates. However, as said, it doesn’t result in higher conversions.

The trouble with conversions: a word on touchpoints

While opens and clicks have grown, conversion rates even slightly dropped in two years, the DMA found. Why this decline? eMarketer thinks it’s related to the growing number of (digital) touchpoints “with which email must share its influence”. Right. So, more personalization doesn’t lead to better conversion rates because of more touch points?

Average marketing touches per order - Source Rimm Kaufman Group

Average marketing touches per order – Source: Rimm Kaufman Group

As you probably know, the number of touchpoints on average has grown in recent years across several information gathering and buying processes, and they seem to keep growing. Recent data from Rimm Kaufman Group (PDF opens), for instance, showed the average number of marketing touches per online order was around 5.4 in Q2, up from 4.7.

I mention the research, that was done on a subset of the company’s clients, since it also shows that despite the growth of the number of touch points, the number of channels used hasn’t risen. In fact, even in a multi-channel reality, it reminds us that many customers still use just one (75%) or two channels (18%) per online order. It’s less about channels than about touchpoints. Of course, when looking beyond the online order, the number of channels and touchpoints goes up.

Personalization is channel-agnostic

So, is the theory that “consumers who once converted directly from emails now find opportunities to convert elsewhere”, as eMarketer describes it, match reality? It probably partially does. However, more importantly we might ask ourselves some other questions as well.

Such as “how well do we personalize”? The term personalization is used by marketers in a vast range of tactics with very different maturity degrees. Some marketers think they are personalizing if they mention the name of the recipient in their emails. Worse, they often think personalization is only about email. It is not and it’s not about just your website either.

An Econsultancy survey, for instance, shows that 88% of marketers that are using social graph data for personalization, say it has a high impact on both ROI and engagement (Adobe offers a free copy of the report upon registration).

Go figure, especially since only 6% of respondents are using social graphs for personalization purposes. These ways to combine data from various sources, including the ‘less obvious’ ones offer many opportunities for customer-centric – instead of channel oriented – marketers.

Personalized interactions and dynamic content, based on a broader set of segmentation and ‘targeting’ opportunities, are also still quite rare. True personalization, across all stages of the buying journey – and beyond – including consistent customer experiences and cross-touchpoint personalization is an exception.

Personalization is personal

Maybe we should even look less at what happens with the channels – in this case email – from a multi-channel perspective but at the way we personalize, engage and interact in a personal way. The truth is that many companies utterly suck at personalizing with the preferences and needs of their – prospective – customers in mind.

To unsuck at personalization, marketers need to:

  • Connect what’s disconnected.
  • Focus on all relevant touchpoints and experiences.
  • Have a holistic optimization approach.
  • Understand that personalization is not a simple gimmick (‘Dear first name’) but a way to get closer and personal.
  • Look beyond the channels.
  • Listen, act and improve in a personalized and continuous way.
  • Work across or beyond the corporate and data silos.
  • Integrate and have a more complete customer view.
  • Give a damn about people and data.
  • Realize their multi-channel mindset is not that of their customers who see brands and businesses as a whole.
  • Create an ongoing loop of listening, measuring and acting.

Don’t see personalization as a nice and easy walk in the park. Work hard to integrate and get up close and personal across touchpoints. I bet it will improve the only rate that matters in the end: conversion.