New research from personalization software firm Monetate explores success factors in how brands create more loyal and lasting customer relationships. The company’s third annual Personalization Development Study, in partnership with third-party researcher WBR Research, examines what has the greatest positive or negative impact on a brand’s ability to execute a customized marketing strategy—and why certain marketers met or fell short of revenue and growth goals.
For companies that exceeded ROI goals in 2018, the research found a direct correlation between a brand’s willingness to invest in personalization and its embedded technology and expertise within its organizational structure and culture.
Customer lifetime value drives ROI
Companies getting the highest ROI from personalization (3X or more) are twice as likely to name customer lifetime value as a primary business objective than companies getting low ROI (1X or less).
Data architecture emerges as top challenge
“Building a sustainable data architecture” overtakes “data quality” this year as the number one obstacle to performing true 1-to-1 personalization.
Higher investments equal better returns
Eighty-six percent of companies getting high ROI reported that personalization made up 21 percent or more of their marketing budget.
Formalized intentions influence outcomes
Seventy-four percent of businesses that exceeded revenue goals in 2018 have a dedicated budget for personalization, and 77 percent have a documented personalization strategy. In contrast, only half of those who missed revenue expectations had a dedicated budget or a documented strategy.
Brands that exceeded revenue expectations in 2018 set personalization-specific financial incentives nearly 50 percent more often than those that fell short of goals.
North America maintains lead…for now
North American businesses get more return from their personalization efforts than European counterparts, but the gap is closing.
“Monetate’s growth, our customers’ growth and industry research demonstrate time-after-time that brands who focus on prioritizing customer loyalty and customer lifetime value experience immediate and long-term success,” said Stephen Collins, CEO at Monetate, in a news release. “Many businesses struggle with tunnel vision, performing one-off tactics aimed to achieve short-term goals. While this may show a temporary lift in their metrics, the brands that are meeting and exceeding revenue targets are the ones that take a serious customer-centric approach to drive pervasive and persistent customer experiences.”
In this global study, Monetate surveyed 600 senior marketers in North America and Europe within retail, travel & hospitality and insurance.