CMOs Getting Personal with Consumers

Discussion
Mar 05, 2008

By George Anderson

Chief marketing officers (CMOs) are increasingly looking to create more personalized communications with consumers and are directing a greater portion of their budgets to this type of approach.

According to a new study from the Chief Marketing Officer Council, The Power of Personalization, more than 55 percent of CMOs said that they would spend more than 10 percent of their budgets on customized communications. One in four said they would allocate more than 20 percent of their marketing dollars to this type of messaging.

“Clearly, CMOs are gaining more confidence in the process of personalization and are increasingly willing to direct more of their marketing budgets to personalized communication tactics,” said Donovan Neale-May, executive director of the CMO Council, in a press release. “Nevertheless, many marketers’ programs have been deemed unsuccessful because of a lack of actionable customer data used in campaign planning – as well as because of inadequate analytics used in assessing post-campaign effectiveness.”

Based on the responses of 700 CMOs, personalized communications are still in the infancy stage. Nearly 44 percent of respondents said their usage of personalized communications was “low” while just under 40 percent said it was “moderate.” The remainder indicated a “high” level of customized messages going to consumers.

“Today’s consumers are drowning in a sea of unrelated marketing campaigns, and marketers’ dollars are being wasted as a result,” said Barbara A. Pellow, group leader at InfoTrends. “Sixty-three percent of consumers prefer highly personalized and unique offers. More investment in personalized marketing is vital to the success of marketing campaigns and, to some extent, business results as a whole.”

According to the CMO Council, data issues are a major challenge for marketers looking to get more personal with consumers. Nearly half said “inadequate systems and infrastructure” limited what they could do with customized messages while a “lack of customer data and insight” (26.2 percent) and “cost and complexity” (43 percent) also figured prominently in the concerns expressed by CMOs.

Discussion Questions: How would you rate the typical marketers “personalized communication” program? How great is the opportunity for personalized marketing communications to drive sales and profitability at retail? What are the keys to developing truly customized messages?

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8 Comments on "CMOs Getting Personal with Consumers"


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Mark Hunter
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Mark Hunter
14 years 2 months ago

CMOs have a long way to go before they get the personalization process down. First off, the connection has to be both ways, just because I get messages targeted to me and my needs from a company doesn’t mean anything unless I feel a connection back to the company. In terms of personalization one of the few companies that do get it is Starbucks, the Starbucks I visit have baristas that are willing to engage in a conversation with me in a way that is not threatening or pushy. The connection with the barista in turn leads me to have a personal sense of connection with them. It’s ironic how this runs counter to the belief that the best way to create a personalized interaction is through the web, a tactic far too many companies are trying to do with me. It’s for these companies that I’ve developed a personal relationship with another web feature…”Spam Block.”

Mark Lilien
Guest
14 years 2 months ago

The CMO Council should’ve used this headline: “38% of Chief Marketing Officers Don’t Know Whether Personalized Communication Outperforms Traditional Marketing.” This statistic is appalling. Every marketing tool’s effectiveness should always be measured. No exceptions. If you can’t measure the results, why spend the money? This headline would’ve meant: “38% of Chief Marketing Officers Aren’t Qualified To Perform Their Jobs.”

Andrew Gaffney
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Andrew Gaffney
14 years 2 months ago

Another related trend that is proving successful for some marketers is building customer personas. By establishing profiles of targeted customers, marketers can build more relevant campaigns and offers.

Personalization may be too big a hill to climb for some retailers, but building more intimate relationships with top tier customer is an absolute necessity for retailers in today’s cross-channel world.

Doron Levy
Guest
Doron Levy
14 years 2 months ago

Personalized marketing campaigns go a long way in building long term relationships with customers. Using buying patterns as a building block, CMOs can tailor marketing messages to the customer.

Personalizing the message goes a step further by showing the customer that you truly value their business. I see a lot of personalization through loyalty programs which is the best way to capture that shopper loyalty.

W. Frank Dell II, CMC
Guest
14 years 2 months ago

This is the future and is a direct result of the mass market decline. The real problem is that it is a new area. We are still learning just how to sell on the internet (with 90% of the shopping carts abandoned).

When we seen political campaigns raising millions and millions of dollars in small donations from people who never gave before, we can see the potential. Getting it right without invading the consumers space will be the trick.

Susan Rider
Guest
Susan Rider
14 years 2 months ago

Personalized marketing is the trend of the future. One only needs to look at the success of blogs to see the involvement and interest of consumers. Many marketing people have not really wrapped their minds around the personalized marketing idea and how to execute it. Others are doing a great job, such as Amazon.

When you put something in your cart at Amazon you get a message that says others who have bought this product ordered the attached also…sometimes it is so unrelated but many times it works. Later, you get an email when a companion product comes out and the message says oh, you liked the XY widget now we have Z.

The personalized marketing that does not work is the kind that is mass-auto generated and just has a space for your name, like the horrid direct mail pieces that come in bundles.

Max Goldberg
Guest
14 years 2 months ago

It’s interesting how this topic is linked to the first topic of the day, retail loyalty programs. The data is there–retailers and marketers have yet to fully mine it.

With the average job-life span of a CMO at less than 2 years, it’s a wonder that any CMO can undertake, yet alone launch, an effective one-on-one communication program with consumers.

Nikki Baird
Guest
Nikki Baird
14 years 2 months ago
This will never work until consumers can “train” the algorithms by providing feedback. I’ll give you 2 personal examples. First, there was a time when I was traveling to Boston very often and staying at the same hotel each time. On my second stay, the only room available was a handicapped room, which would have been perfectly fine except for the fact that the shower head only went halfway up the shower wall. I practically had to sit on the floor to take a shower. The next time I came, same thing–the only room “left” was the handicapped room. I learned my lesson and started making reservations way out in advance. The fourth time, they put me in the handicapped room AGAIN! I complained, and they said “Well, based on your stay patterns, our system put that as a preference.” Um, no. Definitely not my preference. But it sure was “personalized.” Second example: I’m (as you probably know by now) a big Target shopper. I get “clipless coupons” in the mail. They’re great–very personalized. I… Read more »
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