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Why is customer personalization still tone-deaf?

While companies say they want to deepen relationships with their customers and prospects, tone-deaf personalization efforts are keeping relations strained.

While companies want to get closer to their constituencies, customer personalization efforts are still falling flat. As a result, customers have become disenchanted with these tone-deaf marketing efforts and often see little value in them.

Customer personalization efforts include marketing messages that attempt to show a consumer that a company "knows" that person via his or her demographics and preferences. The company then provides messages or deals based on this customer data.

But companies are often so basic in their personalization tactics that consumers see these efforts as disingenuous and unsuccessful, according to recent research by Ernan Roman, founder and principal at ERDM Corp., author of Voice of Customer research, and a guest in this SearchCRM podcast.

During the course of 15,000 hours of telephone research with B2B executives and consumers, Roman said, there is a major gap between expectations of these savvy consumers and executives and the unsophisticated marketing that companies deliver.

Moreover, companies often barrage customers with messages, alerts and other communication without providing them with information they care about or discounts in exchange for opting in to these marketing email lists.

"There is across-the-board dissatisfaction with personalization efforts," Roman said. "Listen to these quotes [from our interviews] because they say it succinctly and pretty damningly. Here's a consumer insight: 'I want more than just buying history-based emails. With today's technology, I expect the offers, the communications to reflect my individual interest and preferences.'"

While companies are using marketing automation software and CRM systems to make the process of marketing more efficient, in fact it may be doing more damage than good, Roman said. Companies are "putting lipstick on tired old-fashioned transactional emails then blasting them through the newest models of expensive CRM technology," he said. "It's doing more brand damage than ever before."

"If I bought the blue Ferragamo shoes and now you're telling me about the red Ferragamo shoes, you've got to be kidding me. Marketers are kidding themselves when they say they're doing personalization," he said.

There is a way out of this downward spiral, though, Roman noted. Customer personalization works when companies use reciprocity with customers or B2B companies. "In spite of privacy concerns," Roman said, consumers will give a company a great deal of personal information "in exchange -- and this is the pivotal part -- for more personalized communications, offers or education. We call this the reciprocity of value equation."

For more, check out the podcast above and also check out ERDM Voice of the Customer research.

Next Steps

Customer engagement: The path to building customer loyalty

How can companies get a 360-degree view of customers?

Personalization is key to closing sales

This was last published in February 2016

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