The ROI of Personalization: Real Numbers for How It Pays Off
The ROI of Personalization: Real Numbers for How It Pays Off

The ROI of Personalization – Here’s How It Pays Off

The marketing industry has moved beyond questioning whether or not to personalize. I think we can all unanimously agree that not personalizing your marketing efforts is a pretty serious oversight.

The numbers don’t lie. Not only do 71% of consumers now expect companies to deliver personalized interactions but 76% actually get frustrated when it doesn’t happen. Clearly, there’s a major opportunity for brands to rise above the competition by delivering exactly what customers want.

Modern technology lets you personalize at scale, so 1:1 digital communications can reach millions of customers.

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With rapidly innovating technology, almost any type of media can be personalized. From homepages to email copy, recommendations to loyalty discounts, sales funnels to Personalized Videos, you can personalize the living daylights out of pretty much anything as long as you have the data and it fits your goals.

A lot of you may start to worry when you hear the word “personalization.” It means more work, more hassle and more room to mess up, right?

Wrong.

Modern technology lets you personalize at scale, so 1:1 digital communications can reach millions of customers. Personalization is layered in terms of its complexity and capacity, and personalization efforts can be implemented to varying degrees, depending on what you’re looking to get out of it.

The excuse we hear from most marketers is that you simply don’t have the time or energy to allocate toward a well-executed personalization campaign. But what you may be missing is the huge cost of not personalizing your efforts. Let’s take a look at the numbers and the real ROI of personalization.

The Return on Personalization

savvy marketing personalization strategy delivers unparalleled ROI

Across the customer life cycle, a savvy marketing personalization strategy delivers unparalleled ROI that makes a major impact on your bottom line.

From personalized email campaigns and landing pages to tailored sales and customer service interactions, personalization leverages user data to turn generic touchpoints into unique, relevant experiences that customers keep coming back for more. Research has shown that:

  • A large majority of consumers are more likely to purchase from (76%), repurchase from (78%) and recommend (78%) brands that personalize.
  • Personalization can lift revenue by 5% to 25%.
  • Companies that excel at personalization generate 40% more revenue than average players.

Plus, the demand for personalization is only growing stronger, especially as generations like Gen Z gain purchasing power. Younger consumers are expecting this level of tailored interaction as a standard. In fact, a whopping 81% of Gen Z are willing to share their data with brands in exchange for a more personalized experience.

People want brands to know them, to not treat them as walking dollar signs but as individuals with unique needs and demands — and they’re willing to reward companies that do so. When customers feel like a brand “gets” them, they’re more likely to stick around and engage at every stage of the life cycle, from awareness to advocacy.

So not only does personalization have a direct impact on revenue but it also strengthens your relationships with customers, ensuring they’re more likely to come back and recommend your brand to others.

Adding Video to the Mix (Plus ROI Numbers)

The numbers get even better when personalization is combined with the engaging format of video. Take American Express, for instance. The brand took a truly innovative approach in promoting its Business Gold Card to business owners by adding video to its direct mail campaign. With a scan of a QR code, owners were presented with a dynamic Personalized and Interactive Video that took them through a tour of the card’s benefits and rewards.

The result? A 10x uplift in responses compared to the control group, proving the power of Next Generation Video. Check out the campaign for yourself below.

One of the best things about Next Gen Video is how versatile it is. You can use data-driven video throughout the customer journey, from customer acquisition, like in the campaign above, to retention through customer onboarding, loyalty and even customer service campaigns.

Personalized Interactive Video works across industries, as well. Companies and organizations in all kinds of sectors have enjoyed dramatic results when they’ve leveraged videos personalized for the individual viewer. Take a look at the numbers:

The takeaway? Adding Personalized Video to your marketing mix can amplify your ROI across industries and touchpoints. Whether you’re using video to onboard new customers, upsell loyal ones or re-engage those who’ve gone quiet, the combination of personalization and video creates powerful experiences that resonate.

Scaling Up: Getting the Most Out of Personalization

Customers now expect a personalized experience and align their brand loyalty with how “known” and valued they feel as individual customers.

We hear so often from marketers that they don’t personalize because it takes up too many resources. But that’s not the case. A data-driven video platform allows you to reach customers 1:1 at scale, even when you have millions of customers around the world, like Ubisoft did in the campaign below.

Rather than manually creating, from start to finish, a new video for each customer, you use data and automation to piece together relevant scenes, info, audio and more to create a truly one-of-a-kind experience. You can even use generative AI to streamline the process even more, cutting costs and saving time.

In other words, there are now virtually no barriers to entry to creating personalized content. Meanwhile, the cost of not personalizing is high. Communicating content that isn’t targeted to your different audiences pretty much means a wasted effort.

If you’re not leveraging marketing personalization, you’re spending your time and effort on initiatives that, simply put, don’t work. Worse still, generic non-personalized messaging can upset your customers and cause the opposite reaction than you intended: churn.

Personalization and Customer Retention

If personalizing your customer acquisition efforts is important, personalizing your retention strategy is nothing short of critical. Your existing customers have a far higher expectation of you than those you have no relationship with. Failing to make them feel respected and valued can be catastrophic for a business.

Remember that not only can attracting a new customer cost up to 7x as much as retaining one, but those shiny new customers are also the least likely to convert. In retail, for example, we know that loyal customers spend 67% more on an average purchase than new customers do.

Everything you need to know about creating Personalized Videos

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Everything you need to know about creating Personalized Videos

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So what does all this mean for the bottom line? Well, increasing customer retention rates by just 5% could increase profits by anywhere from 25% to 95%. That’s a lot of potential revenue you could lose out on if you don’t make churn prevention and customer retention a priority.

For a real-world example, take a look at adidas. Personalization helped them gain a staggering 1,189% increase in sales driven by an email that included Personalized Video. The video featured personal race data and even footage of individual runners in the Boston Marathon, so runners received their own, bespoke (and highly shareable) highlights reel. The campaign also drove over 80,000 visitors to the company’s web properties and immense social buzz.

By focusing on personalization, adidas was able to achieve a much greater return on investment than if it had sent a generic email to runners.

Personal details can also be leveraged to improve routine communications with your customers, which should be a key goal in any retention strategy. When sending billing information, for example, American Water made sure their message was filled with useful information that was personally relevant for each viewer.

Ultimately, you probably know your current customers far better than you know your potential customers (and if not, there’s something very wrong going on…), so personalizing your retention strategy should be far easier than personalizing your acquisition strategy. However, it is exactly this wealth of data that can be overwhelming.

Marketers often find themselves aiming too high in an attempt to leverage all they know about their clients. This may be right for certain use cases, industries or companies but certainly isn’t right for all.

Getting personalization right doesn’t always mean personalizing as much as you can. Sometimes, a better ROI can be achieved by lighter personalization that leverages easily accessible data and allows campaigns to launch quickly, rather than through more complex personalization projects that may never get off the ground.

Boost Revenue With Personalized Upselling and Cross-Selling

Personalization doesn’t end at acquisition and retention. As we mentioned, it extends into the entire customer journey, including upselling and cross-selling opportunities. Personalizing these touchpoints not only enhances the customer experience but also drives higher revenue.

According to a recent survey, more than half of consumers (63%) expect personalization as a standard of service and believe they are recognized as individuals when sent special offers. That means you better be providing tailored recommendations and personalized offers in your upselling strategy or you risk missing out on major opportunities to improve your sales performance.

Strategic upselling and cross-selling techniques can lead to a boost in revenues by selling more to the same customer while also improving the customer’s experience. After all, when you recommend products based on past behavior or preferences, customers are more likely to feel that the offer is relevant to them and respond positively.

Take Vodafone’s upgrade campaign below, for example. Rather than sending out generic advertisements for the new iPhone, the brand created Personalized Videos that addressed each viewer by name and outlined the specific benefits they’d get if they upgraded.

Video personalization is a strategy other telecommunication companies are adopting too. Just from our own clients, we’ve seen results like a 3x uplift in sales and 16 additional NPS points.

By effectively personalizing the upselling and cross-selling experience, you can make sure that the customer chooses the right product for them. And that means you get a happier customer while driving revenue.

Getting Ahead With Personalization

Personalization has redefined marketing and the way we reach customers at every point of the lifecycle. Personalization may sometimes be tricky to implement, but technology makes it easier. For example, our Next Generation Video Platform lets you launch Personalized Video campaigns in a matter of days, and our clients have seen impressive ROI simply by making personalization more engaging through the immersive, visual medium of video.

In short, personalization means happy customers, more efficient and effective use of your marketing dollars and, ultimately, a major boost to your revenue. Across the board personalization of your marketing efforts should no longer be an option, but an imperative.

If you found this useful and want to learn more about how to make personalization work for you in this fast-paced and ever-evolving marketing landscape, check out our guide on the 9 ways to personalize video content. If you prefer to talk one-on-one with a Next Gen Video pro, we’re here for you. Reach out anytime to schedule a call.

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