The proliferation of devices, content formats, digital touchpoints, and connected experiences has resulted in a shift in consumer expectations. Armed with information and technology, consumers now count on brands and organizations to deliver on-demand, frictionless, and relevant interactions at every step along their journey. More than ever, the balance of power has shifted into the hands (or more appropriately, fingertips) of consumers.
For their part, marketers understand the power of personalization. A 2018 survey from Verndale revealed that 90% of senior-level US marketers said personalizing the customer experience is critical for business success.
In the financial services sector, for example, companies that prioritize and excel in customer experience are better equipped to win the battle for consumer loyalty. Younger consumers want more customized and personalized offers, as well as easy access to information and research to make decisions. According to a recent TransUnion study on consumer loyalty in the Consumer First Era, nearly half of Gen Z consumers said relevant offers were important, signaling a growing need for customization as this audience becomes credit eligible.
Marketers’ Challenge with Personalization
And despite these consumer expectations, 84% of marketers in the Verndale survey agreed that they have not realized the potential for personalization across digital marketing and advertising executions.
One potential reason for this is that the majority of marketers across industries (63% as surveyed by Ascend2) view executing data-driven personalization as a challenge. In a sense, they are not wrong. A personalization strategy is not a trivial undertaking; it requires dedicated time, resources, budget – and of course, data.
Foundationally, a robust understanding of consumers and consumer data is the key to success in personalization. Given the amount of data available in the marketplace, determining where to start and what is signal versus noise can be highly complex.
If marketers have incomplete or inaccurate data, their picture of consumers can be distorted. In the best case scenario, brands miss an opportunity to connect or send the right message on the consumer journey. In the worst case, they waste impressions and dollars on the wrong audiences and risk turning off potential customers with intrusive and irrelevant content or offers.
Balancing the Power of Data with Consumer Privacy
Further complicating things is increased regulations around customer data usage – from the EU's General Data Protection Regulation (GDPR) to the California Consumer Privacy Act (CCPA). While financial services brands are no strangers to compliance, these new regulations have all organizations re-evaluating practices in data collection, activation and more.
To prioritize a data-driven and Consumer First approach, marketers must understand how to strike the right balance between relevancy and utility in advertising, while ensuring safeguards for consumer data.
As a preliminary step in this process, brands and organizations will need to rethink the value, accuracy, and security of their current data and determine any gaps limiting them from seeing the full picture of customers. With a comprehensive and accurate view of audiences in place, brands can translate a customer-centric strategy into the execution of more personalized, 1:1 communications and targeting across touchpoints to drive higher response rates, better marketing performance, and stronger customer relationships.