The age of personalization: How to prepare when nobody’s prepared by Optimizely

Marketing personalization has never been more important, yet companies are struggling to implement the right strategies.

Welcome to the age of personalization: A time where customers are simultaneously expecting you to know everything about them before they land on your site, while still being extremely cautious about how their data is being collected and stored.

Marketers have been walking this tight rope for nearly two decades at this point, but we’ve finally reached an inflection point; companies who don’t provide a personalized experience will fall behind those that do.

With over 75% of consumers more likely to consider buying products from brands that personalize (and an equal number of consumers who admit to becoming frustrated when they’re not greeted with a personalized experience), personalization strategies have never been more prescient.

And yet top senior executives across marketing, ecommerce, IT are struggling to rev their personalization engines, never mind scaling their personalization strategies. In a recent survey, 64% of executives said their teams have only just begun implementing real-time personalization strategies.

So, what’s holding them back? Well…

• 44% say complicated or fragmented data is a top challenge. 
• 43% say a lack of effective analytics holds them up.
• 40% say they have difficulty scaling their program.
• 39% say they struggle to implement the program in real-time.
• 36% say disjointed workflows are holding them back.

The current state of personalization

Implementing a personalization strategy and building a personalization engine that operates on all cylinders is much easier said than done. Modern consumers are interacting with your brand with the expectation that the experience will be tailored to their individual preferences and characteristics before the landing page is done loading or the app is done opening.

It’s no wonder 86% of executives reported they’re in need of more advanced personalization than what they’re currently capable of delivering. It’s also no surprise that 62% of executives increased their personalization budgets in 2024 from 2023, a clear indication of how dire the situation is for organizations.

Personalization can’t really be that difficult, can it?

It can.

In fact, just 26% of executives report having a unified definition of personalization throughout their organization.

If you’re asking yourself, “how can an organization provide a personalized web experience if they don’t even know what personalization means to them,” it’s because they can’t.

Of the executives that do have a personalization strategy, they’re looking to three key categories to measure their ROI: 

• Sales per customer (49%)
• Time spent on site/page engagement (45%)
• Customer retention (44%)

What’s telling is that not a single metric breaks the 50% mark, which speaks to the general uncertainty of how to track success.

The truth is that many companies are flying blind when it comes to personalization, with 43% of respondents expressing concerns that ineffective personalization campaigns will result in reduced budgets in the future.

Making personalization easier

Personalization requires careful coordination. Organizations typically rely on cross-functional teams spanning marketing, product, engineering and sales to build a personalization infrastructure, which also relies on data systems and martech tools.

What could go wrong? Well…

• Disparate systems of software haplessly strewn together, overcomplicating personalization and adding unnecessary layers of complexity.
• Messy data management systems (and, let’s face it, this probably applies to you), will make it impossible to create personalized experiences.
• Mountains of data that will require more resources to organize than you could possibly hope to recoup from utilizing that data to its fullest potential.
• Poor workflows resulting in nobody really knowing what they should be doing and when they should do it.
• You never figured out how to measure success or what ROI looks like.

If any of these scenarios sound familiar, you’re in good company; only 9 percent of executives noted that their personalization strategy is fully operational.

Here are some ways to ease the burden of getting started with personalization so you can minimize friction:

Perform an audit of your personalization tools for strong audience management capabilities

Having an abundance of tools at your disposal might make you feel powerful, but the reality is that it’s likely slowing you down, resulting in fragmented systems and disjointed workflows. Unless your tools are intelligently weaved together, the data flow will become isolated and unreliable.

This fragmentation usually results in work about work.

Ensure your personalization platform has strong integrations with the tools and platforms where your data is stored. Also, make sure the platform enables a holistic view of the customer and allows you to efficiently manage your audiences.

Start small

Walk before you run, run before you scale and stick with your most reliable data points while focusing on relevant business outcomes.

If you don’t have a ton of data or it’s spotty, focus on the data you do have, and what you can most accurately measure.

Personalization will only lead to new business opportunities when it’s nearly fully operational. If you’re struggling to get your personalization off the ground, focusing on your most trusted data and tried-and-true segments will help you build a solid foundation for the future.

Keep an eye on content

You won’t get very far with personalization if you don’t have a large inventory of content or products. 

All of the workflows you’ll design, strategies you’ll implement, and data you’ll collect will all be done with one clear goal; to deliver the right content to the right customer at the right time.

The problem is that you’ll need a ton of content or products to effectively enable personalization. Your customers won’t really need a nudge in any direction if you only have 5 pieces of content on your site or a handful of products.

At some point, if you want to succeed with personalization, you’ll need a scalable content strategy that provides a diversity of content assets to customers at various stages of the customer journey.

Start experimenting

If you’ve already begun personalization but it’s not going well, consider how experimentation can help. Multi-armed bandits, which refer to a type of A/B testing that uses machine learning algorithms to dynamically allocate traffic to variations that are performing well, while allocating less traffic to variations that are underperforming, are effective since they show the best-performing option in real-time and automatically direct traffic to the best experience. This approach not only optimizes engagement but also continually refines your strategy to ensure your campaigns are always aligned with user preferences. 

In fact, executives are already recognizing that experimentation provides benefits including:

• Identifying mistakes (40%).
• Allowing for data-driven decisions (40%).
• Testing strategies before they run them (39%).
• Personalizing customer experiences (39%).
• Discovering which personalization strategies work (39%).

Organize your data

Earlier, we mentioned 44% of executives noted omplicated or fragmented data is a top challenge, while about the same amount noted a lack of effective analytics holds them up.

One way to guarantee data won’t be an issue is with a powerful customer data platform (CDP).

Instead of tearing everything down and starting from scratch with your data that’s strewn about countless data warehouses and data clouds, leverage a CDP to keep track of constantly accumulating data. This is especially important for personalization, as you want to ensure you’re surfacing the right data at the right time to the right customers. 

Ever hear of AI?

Do you need AI to execute personalization? Well, no, but it would make things a whole lot easier.

• Scalability – AI will dynamically adjust workflows and route users towards personalized experiences instantly.
• Enhanced user experience – Adaptability and real-time personalization are also much more attainable with an AI engine steering the ship.
• Content recommendations – Manually surfacing content will take an extraordinary amount of resources. At some point, the juice won’t be worth the squeeze. Allowing AI to scan your content repository to surface relevant content will drastically save time.

Recap

Personalization isn’t just some fancy buzzword or corporate jargon. It’s changing the way organizations are connecting with customers. As companies continue to step up their personalization game, those who successfully navigate these challenges will be better positioned to meet rising consumer expectations, build stronger customer relationships, and deliver personalized experiences.

Optimizely Personalization is a purpose-built solution that empowers organizations to create 1:1 personalized experiences. With Optimizely Personalization, brands can create targeted experiences that drive conversions, deliver high-performing experiences in real-time, measure ROI, and plan and ideate, all from a single platform.

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