SOURCE: CMO Council

March 04, 2008 09:31 ET

New CMO Council Study Finds Personalized Communication Programs Still Under-Utilized and Under-Tested

About Half of CMOs Report Having Only "Fair" to "Poor" Knowledge of Their Customers, Complicating Campaign Design and Implementation

BOSTON, MA--(Marketwire - March 4, 2008) - The Chief Marketing Officer (CMO) Council today released the findings of its new global survey, "The Power of Personalization," which shows that inadequate customer data is the key obstacle facing top marketing executives in their adoption of personalized communication techniques. The findings were announced at The ON DEMAND Exposition & Conference -- the preeminent event for commercial printers, publishers, and in-plant printing professionals, which is taking place this week at the Boston Convention and Exhibition Center.

Few respondents in "The Power of Personalization" study give their companies high marks in devising personalized communications and messaging. Indeed, many CMOs feel the process of developing individualized marketing messages is still largely under-utilized and under-tested.

The future of personalized communications, however, appears bright. This year, more than 55 percent of respondents plan to allocate 10 percent or more of their marketing budgets toward personalized communications, despite their reluctance to declare their personalization efforts successful in the past.

"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. "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."

Neale-May also noted that a surprising 38 percent of the survey respondents said they didn't even know whether personalized communications had outperformed traditional mass marketing tactics.

Neale-May will offer insights on the survey findings during the conference's keynote panel discussion, "Talking to the CMO," on Wednesday, March 5, at 11:10 a.m.

More than 700 senior marketers worldwide participated in study, which explored the various effects of customized content, collateral and personalized Web interaction on marketing effectiveness, customer acquisition, retention, and business outcomes.

The CMO Council has over 3,000 members controlling more than $70 billion in annual marketing spend worldwide. "The Power of Personalization" research initiative was co-sponsored by Xerox, Pitney Bowes, GMC Software, Valtira and MindFireInc. Each underwriter contributed perspectives to the report on personalized marketing and the opportunities presented by various personalization tools. The report can be downloaded from the CMO Council web site (www.cmocouncil.org).

The Direct Marketing Association and Print on Demand Initiative (PODi) served as fielding partners for the study, along with media partner CRM Magazine. Promotional support was provided by InfoTrends.

Additional Findings

Many of the findings from "The Power of Personalization" illustrate marketers' relatively low level of adoption of personalized communications techniques, despite their increasing interest and emphasis on personalization strategies going forward.

A large number of respondents, 43.5 percent, indicated only a "low" usage of personalized communications in their customer acquisition and relationship management programs. Another 39.4 percent of respondents said their usage was "moderate," while only 17.1 percent indicated a "high" level of usage.

"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. "InfoTrends' recent direct-mail research indicates 63 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. 'The Power of Personalization' study highlights the importance of knowing your customers and targeting their individual interests."

According to the study, 55.1 percent of respondents plan to increase their 2008 marketing budget allocations for personalized communications by more than 10 percent, with 25.3 percent allocating more than 20 percent of their marketing budgets to personalized communications. Another 21.8 percent were undecided on allocations.

In terms of gauging the success of personalized communication initiatives, top measures of program success included conversion and close rates, quality and volume of leads, customer feedback, email opening and forwarding rates and Web site traffic and page views.

Data issues are central to the challenge facing marketers that are embracing personalized communication strategies. 49.1 percent of respondents blamed "inadequate systems and infrastructure" for limiting personalized communication initiatives. "Lack of customer data and insight" and "cost and complexity" were also cited as major contributing factors by 46.2 and 43 percent of respondents, respectively.

Who "owns" the data used to develop personalized communication techniques? Respondents indicated that company divisions maintaining data used in personalized marketing initiatives included sales and customer relationship management (47.8 percent), marketing and research groups (40.4 percent), customer service and support (30.1 percent) and IT organization (28.4 percent).

Winning Strategies for Personalized Communications

Those surveyed by the CMO Council identified several key methods their companies used to better reach their target market through personalized marketing initiatives. The top methods included:

--  Individualized emails and letters (top choice -- with 66.1 percent of
    respondents utilizing)
--  Opt-in, permission-based marketing programs (46.5 percent)
--  Targeted database marketing leveraging personal profiles (43.5
    percent)
--  Personalized e-mail promotions based on timing of signup and regular
    intervals thereafter (40.1 percent)
--  Print on-demand collateral incorporating personalized content (30.5
    percent)
--  Variable Data Printing (VDP) (31.6 percent)
--  Marketers see the best personalization opportunities in email and Web
    content delivery, with 52.3 percent choosing email campaigns among their
    "top three" opportunities and 38.8 percent choosing Web content programs.
--  Respondents said the top benefits of personalization included making
    offers more relevant and meaningful to prospects, building closer
    relationships with customers and increasing the company's overall marketing
    effectiveness.
--  In creating personalized communications initiatives, respondents cited
    the customer's purchase history as their chief consideration (46.8
    percent), with value/profitability of relationship and type of customer
    (individual or business) second and third (41.7 and 40.8 percent),
    respectively.
--  While the number of respondents using personalized URLs (PURLs) only
    constituted 25.6 percent, an additional 22.1 percent claimed to have
    tested, but not incorporated, PURLs, more than any other personalized
    communications tool.
    

About CMO Council

The CMO Council is dedicated to high-level knowledge exchange, thought leadership and personal relationship building among senior marketing and brand decision-makers across a wide-range of global industries. More than 3,000 top marketing executives from 52 countries are represented on the CMO Council worldwide. These individuals control well over $70 billion in annual marketing expenditures. Visit the CMO Council website at www.cmocouncil.org to find out about programs and events produced by this Peer-Powered Network.

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