03 Dec Personalization, a key for growth
Whiplash Team, 3rd December 2021
Personalization, a key for growth
Personalization is emerging as the great growth engine for companies according to the “Next in Personalization 2021 Report” published by consultancy firm McKinsey, which points out that 71% of consumers expect a personalized interaction with brands and that 76% of them get frustrated when this does not happen.
Of course, personalization is not a new concept. However, since the beginning of the pandemic of Covid-19, in March 2020, it has become one of the main growth tools for those companies that manage to implement successful personalization strategies, that is, those that deliver the right experience to the right people at the right moment. That is the main finding revealed by the “Next in Personalization 2021 Report”, published by McKinsey.
One of the factors that has driven personalization as a key element for users is that, during the pandemic and confinement their level of digital interaction increased and, therefore, were exposed to the personalized experiences offered by e-commerce leaders. Thus, for consumers, personalization has become “the default standard” for commitment to a brand or company.
According to the study, having personalized interactions with brands is essential for 71% of consumers, and 76% of these get frustrated when it does not happen.
In an environment in which changing brands or suppliers is increasingly simple, for companies it is increasingly important to be successful with their personalization strategies. Especially when 72% of respondents indicate that they expect companies/brands to recognize them as individuals and know their tastes and interests.
As for what is “personalization”, users point out that they associate it with positive experiences that have made them feel special. Thus, for customers it is important to perceive that their brands are interested in building a relationship with them, and not just in the economic transaction. How? By, for example, establishing contact after a purchase to inquire how was the experience, or by sending a how-to-use video of the acquired product.
“Personalization is especially effective in promoting the commitment and loyalty in the long term,” says the report that emphasizes that it is a determining factor both for the creation of value for the client and for a better performance of the brand. In this sense, it reveals that 78% of consumers are more prone to repurchase a brand that offers a personalized experience; the same percentage would be willing to recommend it to their friends and family.
The study shows that personalization can lead to an increase of between 10% and 15% in revenues, depending on the specific sector and the company’s ability of execution.
The study, which analyses why some companies achieve better results than others, notes that the main difference is how they address personalization. Instead of assuming that it is a matter of marketing or data analysis, they see it as an opportunity for the whole organization, and “rather than focusing solely on short-term wins, they look for long-term drivers of growth and emphasize customer lifetime value”.
In addition, the report points out five main reasons for extraordinary performance in terms of personalization:
- To rely on in data analytics to identify opportunities.
- Invest in rapid activation capabilities driven by advanced data analytics.
- Invest in Martech (the fusion of marketing and technology) and in fit-for-purpose data.
- Committing to an agile operating model.
- Invest in talent and training to refine skills and knowledge.