The CMO Council got Xerox, Pitney Bowes and a bunch of IT vendors to pony up cash to produce a report that documents the obvious -- personalization is good enough for those who need it and nobody has made the business case for more widespread adoption.
The reality is that businesses concerned with churn, serial or continuity sales and consumer fraud have bought and use CRM and IT tools sufficient to separate good customers from bad ones and to prevent losses. The vast majority of companies, even those who accept the premise -- that using personal data to craft offers and messages will yield faster, bigger orders over time -- have not been convinced that the cash costs and the disruptive costs of buying and installing complex CRM tools will pay off or pay out. In fact, even many advocates of greater personalization believe that the benefits of personalization in some business sectors plateau before the technology gets paid back.
When we discuss personalization we are way beyond addressing individuals by name (e.g "Dear Danny"), although that's the most common use of personalization technology. We are talking about using purchase histories, preferences, web behavior and inferred data to make pointed, customized or time sensitive offers and to allow individual behavior to trigger outbound messaging and offers designed to increase volume and/.or maintain brand or product loyalty. And while 53% of those surveyed in the report entitled "The Impact + Influence of Individualized Content Delivery" think personalization beats traditional mass market delivery, there has only been anecdotal evidence that this works and customers love it.
There has not been enough data or enough companies willing to come forward with case studies of sustained personalization tests and results to reach a critical persuasive mass. Add to that, the suspicion that even when it works, it peters out after a few shots rather than drives a compounding effect on volume, profits or loyalty. So its no real surprise that less than 10 percent of marketing budgets go to personalization or that marketers "appear fearful and intimidated by the investments required for personalized communications."
The key gating factors to widespread adoption are:
1. Management Sensibilities. Most don't get it. Those who do; don't think its worth it. And even those who think it might be worth it won't give it priority among all the other competing IT investments an enterprise might consider.
2. Cost. It costs a lot to buy and implement. It costs a lot of time, money and patience to install, train and use. It is never an easy transition and few CEOs or CFOs are willing to bear the disruption, hassle and employee pain.
3. Can't Compete for IT Priority. 47 percent of those surveyed say they can't gather or properly integrate the data needed to pull personalization off. Add to that that CRM is always last place on the CI Os hit list since he/she rarely owns it, rarely understands it and rarely is willing to take direction from the monkeys in marketing. As an IT function it doesn't excite the geeks and as business function, its ROI is unclear.
4. Not Data Ready. Most companies don't know much about their customers or can't aggregate data gathered in different business silos. The systems don't talk to each other and neither do the people running them. Layer on top of this the usual bureaucratic politics where different departments own different tools (web, direct marketing, customer service) or different customer segments (industry verticals, regions, national or global accounts) and you get a United Nations-like quagmire.
The real question is -- How do I get a bunch of high powered firms to pay me to author and shill for something that everybody already knows?.
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