Why do Most Businesses Struggle with Personalization?

Modern consumers are sophisticated and empowered with knowledge. They know what they want and what they don’t. They don’t want to be treated like just another customer. They don’t want to visit a company’s website and see it is all about the company. 

Consumers want things tailored to their tastes. In fact, research from Forrester found that “77% of consumers will choose, recommend, or pay more for brands that provide personalized services or experience”. 

Personalization is at the heart of every successful marketing. But very few brands actually succeed at it. According to a study by Seismic, only one in five organizations is effective at personalizing content at scale.

So why the struggle is real for businesses trying to personalize? There is a number of reasons why personalization remains to be a marketing buzzword with very few marketers actually succeeding at it. 

Lack of enough resources 

Personalization is a huge undertaking that involves many touchpoints. Most marketers feel under-equipped. A recent McKinsey survey of senior marketing leaders finds that only 15 percent of CMOs believe their company is on the right track with personalization.

The privacy paradox 

The key to personalization is getting enough behavioral data from a person. But consumers are not always happy with that. They would like to get personalized information from a company but at the same time are reluctant to let that company have too much of their data. This hampers a business effort to personalize its messaging.

Not having a clearly defined audience

As the saying goes, a business that is for everyone is a business for no one. The key step to personalization is having customers’ behavioral data from which you will listen and respond. But with an undefined or complex audience, you will not have enough data to drive meaningful personalized interactions. 

Too many data points within the company

Personalization sounds promising on paper but it is a nightmare for data engineers. According to Chris Bergh, CEO of DataKitchen, Inc. a data engineer would need to “get the ERP, MRP, CRM, marketing automation, web analytics, call center platforms and other IT-controlled systems all talking to each other, and then integrate predictive AI”. These systems are not always interoperable and they come from different databases and different software providers.

Human nature

Humans by nature are unpredictable. As the marketing genius, Rory Sutherland put it, “human perception is leaky”. Data uses logic and sometimes logic could be the wrong approach to go with humans. So businesses find it challenging to personalize their messaging because at one point they thought they knew their customers well and then those customers have found new interests or adopted new behavior. To tackle the unpredictability of human behavior, businesses need to consistently optimize.

Organizational challenge

According to Mckinsey, the challenge to implementing personalization is not entirely on technology. Most companies already have plenty of tools. The real challenge is to transform the marketing organization’s processes and practices to achieve the full potential of personalization. If the sales and marketing team is not organized, it may lead to customer confusion along the decision journey.

The promise of personalization is not fully here yet. But with advances in data and analytics, businesses will soon create a personal and more human experience at every touchpoint of a buyer’s journey.