How Does Personalization Impact the Bottom Line?

customer personalization marketing

Almost 6 in 10 marketers agree that personalizing content is crucial to their online marketing strategies. This is according to a recent report by Econsultancy, which also examined the types of data used to personalize consumer experiences and their impact on ROI.

Survey respondents say that the types of personal data in which ROI is the highest are:

  • Purchase History (74%)
  • User preferences (70%)
  • Website behavior (68%)
  • Brand interactions, such as (email opens and clicks (65%)

personalization marketing data

Incorporating purchase history into personalized experiences has the greatest impact on ROI, but only about 4 in 10 respondents are using this data, which indicates a huge untapped opportunity for marketers to boost ROI.

Personalization: The New Standard

Many marketers use some form of personalization in their strategies, such as first name or location. However, marketers must move beyond this basic information to deliver hyper-personalized experiences. Consumers expect brands and companies to know them – not just by their first name, but by the products they prefer to purchase, their interests, and lifestyle. Marketers who are able to relate to consumers on a more personal level can significantly improve the customer experiences and create more brand loyal advocates. Which in turn, boosts the bottom line.

In fact, according to a recent report by Infosys1, 59% of shoppers who have experienced personalization believe that it has had a noticeable influence on their purchasing. The majority of consumers report that personalization has some impact on their purchasing decisions. Unfortunately, companies have not always done a great job at providing personalized experiences for its consumers. At least one-third of consumers still wish their shopping experience was more personalized than it currently is and one-fifth of consumers have never even experienced any kind of personalized offers based on their previous purchases.

As consumers get more sophisticated and expect more, personalized experiences have become a key competitive differentiator. Personalizing the customer experience begins with a solid foundation of data. Data from all consumer touch points must be integrated into a marketing database. Once all sources have been integrated and cleansed, marketers can begin analyzing the 360-degree customer view to determine which messages and offers consumers are most apt to respond.

Customer-Value Based Personalization

For example,  by analyzing consumers based on transactional history, such as average spend, products purchased and frequency of purchase, companies can devote more resources and create best-in-class offers for their most profitable customers. A bank may want to increase the credit card limit for high-spend, high-value customers. Or an on-line retailer may offer free shipping to profitable customer segments.  

Buying Frequency Personalization

Creating a segmentation based on buying frequency is good for targeted marketing campaigns, such as re-engaging past customers or rewarding frequent shoppers. For example, by creating a segment of customers who have not purchased in the past six months, a special incentive can be sent to this group.

In the following example, a regional retailer has identified three segments and the marketing strategy for each

.propensity model, business intelligence model

Propensity to Purchase Modeling

This refers to the likelihood of a customer to purchase a particular product. By better understanding a customer’s purchase propensity, companies are more likely to up-sell or cross-sell these customers. Types of data that are often included in this type of model include purchase behavior in the last 12 months, amount of spend, frequency, and other actions such as increased clicks on a website. By understanding a customer’s likelihood to buy, consumers in the market can be targeted with the right offers at the right time.

The study found that the leading metric for analyzing the benefits of personalization is conversion (65%), followed by customer acquisition and customer retention.

How is personalization impacting your company's bottom line?

To better understand your customers and learn how to analyze their purchase behavior to create more personalized customer experiences, download our free Right Time Marketing Data Solution Guide.

Right Time Marketing Data Solution Guide


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