Marketers Now Taking ROI Personally: CMO Council
With better tools at their disposal, marketers are shifting their ROI analysis away from campaign metrics and toward how personalization actually moves the needle for the company, according to “Making Personalization Possible,” a new report from the CMO Council.
Personalization is maturing into a measurable business tool for marketers, though one in four said they are still struggling to tie the effectiveness of their efforts to business results, according to “Making Personalization Possible,” a new report from the CMO Council.
Indeed, the research found, as personalization becomes table stakes for marketers, practices and measures of success are evolving fast. With better tools at their disposal, marketers are shifting their ROI analysis away from campaign metrics and toward how personalization actually moves the needle for the company, stated the report, based on an audit of more than 170 senior marketers carried out in late 2015.
This marks the first time surveyed marketers said they are relying more on business results, such as acquisition rates, over clicks, views, and other similar traffic-based metrics to judge the effectiveness of their personalization efforts, said Liz Miller, the Council’s senior VP of marketing.
“We’ve all been saying for years that we have to be tying everything we do in marketing to business value, but the No. 1 way we did that is campaign metrics,” Miller said. The survey found that 69% of marketers link personalized engagement to retention-rate improvements—a very satisfying result, she said.
While measures of digital engagement, such as open rates, are still being used by 59% of marketers studied, and campaign satisfaction surveys are still popular with 52%, the CMO Council found more business-connect measures are gaining ground as gauges of campaign effectiveness. Measurements of acquisition-rate improvements (mentioned by 62%) and retention-rate improvements (69%) help tie better to business impact, as do measures of revenue-per-transaction increases (49%), customer life time value (53%), and upsell and cross-sell engagements (53%).
“We’ve been talking about personalization for decades. … Personalization as a concept and, frankly, personalization as an expectation of our customers has been there for many years,” Miller said. “The challenge we have is, how do we personalize beyond a single channel or experience? How do we expand the definition of personalization?”
Marketers said they are less confident that they can personalize the experience across the entire customer journey. Only 14% are confident they can leverage data and predictive analytics to follow the customer path along the entire journey, 36% said they are able to personalize in select channels, while a promising 21% said they are able to personalize experiences both online and offline.
The differences may be due to marketers’ different approaches to personalization strategies. While 37% said successful personalization draws on a single view of the customer, drawn from data across the company, another 29% prefer an omnichannel approach that engages the consumer with content for each channel independently.
Personalization has many nuances, mainly in the handling of data, Miller said. The single-view model pieces together the data from silos, but in trying to engage the customer, marketers overextend themselves by trying to be in every channel a consumer could be in at any given time. The results is “a patchwork quilt of random acts of marketing,” Miller said.
The new omnichannel approach leverages data with predictive analytics to add context and match channel and message at the right time, Miller said. Instead of a marketing-centric data system, it incorporates other departments, including finance, sales, and operations. That gives a better view of the customer journey and how marketing effects the end result.
“That information can’t be marketing-centric, and that’s where a lot of organizations are today,” Miller said. “It can’t just be a CRM view: ‘Whatever is in my CRM system is the truth.’”
Improved measurements are leading marketers to feel more optimistic about their ability to justify their spend, but the process is still evolving, with 26% of marketers focused on campaign ROI or struggling to even quantify their results, according to the report. Forty percent of marketers are still working on improving the ability to measure the impact of their spending on personalization, while another 34% said they felt they were doing moderately or extremely well in their efforts.
The marketers most confident in their ability to personalize the journey had several best practices in common, according to the study. They chose an omnichannel approach and were more likely to view customer retention as a measure of success than their peers. They also were more likely to consider budgetary factors, such as reduced overhead and increased revenue per transaction, as relevant markers of impact. In addition, these marketers said they were ready to move to the next stage of analytics with new tools, such as life-cycle management and journey mapping, to enrich their use of data, according to the study.
“Marketers are really looking to get smarter faster about their customers,” Miller said. In the next year, developments such as the Internet of Things and the application of machine learning and predictive analytics will add new tools and data to marketers’ kits, which will lead to another evolution, she added. As much as social media transformed engagement, IoT is bound to do the same, Miller said.
“We’re right at the lip, when IoT is going to become a map of reality,” she said. “We’re going to get smacked around a bit, but we’re going to learn.”
See what the Twitterverse is saying about personalization: