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The Consequences of Getting Marketing Personalization Wrong

Article • April 25, 2023 • Written by: Diane Keng

According to data from McKinsey, 71% of consumers expect companies to deliver personalized interactions, and 76% get frustrated when this doesn’t happen. In 2023, there’s no doubt that marketing personalization is the way to earn consumers’ attention and gain brand loyalty. But personalization done poorly is a recipe for disaster. 

How personalization goes wrong:

96% of consumers believe there is such a thing as bad personalization. There are two main patterns that consumers themselves have noticed in their interactions with brands: we’ll call them data fumbles and false starts. Fumbles use existing data poorly, while false starts act prematurely, both resulting in underwhelming personalization from a brand. 

Let’s gloss over the data fumbles by first saying that in this day and age, data fumbles should never happen. The first one is using the wrong name: 57% of consumers have seen brands get personal customer details wrong. Avoid making a rookie mistake by having a stone-clad personalization strategy in place.

The second data fumble is targeting the wrong segment: 59% of consumers have interacted with brands using out-of-date information about them. This is where it pays to make sure your data collection and personalization tools are constantly talking to each other—or perhaps make them one and the same.

Another way to fumble your data is by keeping it on the bench; that is to say, not using consumer data effectively to create a seamless experience. 36% of brands keep no record of customers’ previous purchases or interactions. Sleeping on these precious forms of information about your consumers—ones that have already shown interest by purchasing—is a surefire way to alienate your ideal consumer.

Now onto the false starts: 54% of consumers have noticed that brands make assumptions about what they want based on single interactions. Jumping the gun with personalization can alienate your consumer by making inaccurate generalizations about their behavior. 

For example, let’s say a consumer buys a fishing pole as a gift for their spouse. For the spouse, fishing is a solitary activity and the buyer actually enjoys the downtime while their partner is away. It wouldn’t be a good move to recommend a family tent as the next purchase: enjoying time in nature is only relevant to one person in the household. 

The next false start is spamming the consumer: 54% of consumers think brands send too many personalized messages. It’s one thing if a visitor shows a high intent to purchase and you remind them about their abandoned cart, but there should be only one touch to incentivize them to convert. The worst thing you can do is continuously reach out to a consumer who merely glanced at a few products and left. Let them know about a relevant promotion, but don’t reach out more than once a week if they have yet to convert. 

What can happen if personalization goes wrong:

We all have stories about personalization and targeting gone wrong. Have you ever seen an ad for a product you were texting about, but hadn’t gotten around to searching for? This is a prime example of overreaching with personalization. It’s the reason why every app you download from the iOS App Store now asks for permission to track your activity across other apps and websites.  

Here’s what can happen if marketing personalization goes wrong:

Fewer sales: A Gartner study found that 38% of consumers will stop doing business with a brand if they find its personalization efforts to be “creepy.” Avoid creeping your consumers out by ensuring that the data you act on has been collected with consent.

Adverse effect on customer loyalty: If you use data without a consumer’s consent, they are more likely to find another brand that respects their privacy. The same is true if you experience a data breach, so be sure to have a strategy for protecting your data. 

Public controversy: In this era of increased privacy laws and wariness, it’s more important than ever to take the high road and obtain consumers’ consent to use their data. If you don’t, they’ll be sure to tag you on social media with evidence of your brand crossing boundaries. This will, in turn, negatively affect your brand’s credibility and bottom line.

How to get personalization right:

Earn your consumer’s trust.

According to data from Twilio, 98% of consumers want brands to do more to guarantee the privacy of their data, as well as be more transparent about how their data is used. As the cookieless future approaches, being perceived as a trustworthy brand is becoming increasingly important. Without the trust of your consumer, your brand will have little to nothing to act on when cookies go kaput. 

Acting on the right data is crucial to the success of personalized marketing.

87% of customers find it acceptable for brands to use their data to personalize interactions and make them more relevant to the individual consumer. It should be a relief to brands that the majority of consumers understand how personalization comes into play and want marketing to be personalized. Without data, true 1:1 personalization is not possible.

However, 64% of organizations are either not collecting data, or they are storing it in siloed systems, resulting in disjointed and unpleasant experiences for customers. To avoid this, the best brands at personalization are enlisting the help of an AI recommendation engine to act on consumer data as quickly as it can collect it. A responsive, rather than reactive, approach to data collection creates seamless customer experiences that encourage repeat purchases. 

Personalization requires a lot of resources and data in order to be successful. When it’s not successful, your brand will suffer: 66% of consumers would stop shopping with a brand if their experience isn’t personalized. These pitfalls of personalization and tips for success should inspire you to achieve your marketing and revenue goals with creativity and resourcefulness.

Ready to transform your digital personalization with incredible speed?

Diane Keng

CEO & Co-Founder @ Breinify
Forbes 30 Under 30 for Enterprise Technology