Personalizing customer communications can be quite the profitable practice. That doesn’t mean adding “Dear NAME” greetings will suddenly spike your marketing performance. What it does mean is that weaving personalization into the fabric of your marketing—and marketing operations—improves marketing ROI.

Consider the results from Monetate’s “2017 Personalization Development” study. It’s based on a survey of 131 senior marketers, comparing those who reported that their company exceeded revenue expectations over the past 12 months against those whose company met or missed revenue goals. According to the study, most respondents whose company exceeded revenue expectations have a documented personalization strategy and a measurement system in place, and tie financial incentives to the results of personalization efforts. Conversely, the minority of respondents from companies that met or missed their revenue goals take those actions.

Respondents whose company exceeded revenue goals that have

79% – A documented personalization strategy

88% – A personalization measurement system

83% – Financial incentives tied to personalization goals

Respondents whose company met revenue goals that have

31% – A documented personalization strategy

47% – A personalization measurement system

23% – Financial incentives tied to personalization goals

Respondents whose company missed revenue goals that have

8% – A documented personalization strategy

42% – A personalization measurement system

17% – Financial incentives tied to personalization goals

Not surprisingly, 88% of respondents whose company exceeded revenue goals are planning to increase their personalization budget this year. Only 26% and 19% of marketers whose companies that met or missed their revenue goals, respectively, are planning to increase their personalization budget in 2017.

“You can see a correlation between company results and the actions [its marketers] were taking,” says Maribeth Ross, Monetate’s SVP of marketing. “The marketers who rated themselves as more advanced with personalization were also more profitable.”

One element that nearly half of the high-performing companies lack is a dedicated resource—one person whose job it is to focus on personalization. The reason? These companies take an integrated approach, Ross explains. “Rather than one person handling personalization, it becomes part of what the company does,” she says, adding that the most successful companies build in personalization to support all areas of their business. Doing so creates consistency in the way the companies handle personalization. It also avoids internal conflicts and customer confusion that could arise from different teams taking different approaches to personalization.

“When you have competing initiatives at play in a matrixed organization, it makes it hard to be successful,” Ross says, “because the easy choices are to make everyone happy or to avoid making a decision at all. Both options lead to what we call ‘compromised experiences.’ These are missed opportunities to provide the best customer experiences. Personalization that’s handled consistently throughout a company helps it give every customer the best possible experience.”

Ross’s recommendations for companies looking to have personalization permeate their customer interactions include:

> Set up the marketing organization and related functional areas in a way that enables the teams to be nimble and make decisions quickly so they can provide the optimal experience for each customer.

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> Measure the impact of personalization on the business; this will help to ensure budget for it going forward.

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> Have a documented personalization strategy that the marketing team and related functional areas such as customer service can use as a guide.

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> Link variable compensation to the results of personalization efforts. “This is a linchpin,” Ross says.

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> Aggregate as much information about customers as possible and use it to guide interactions with them; the more marketers do this the better they’ll be at interacting with their customers.

About the Author

Ginger Conlon, chief editor and marketing alchemist at MKTGinsight, catalyzes change in marketing organizations. She is a frequent speaker on marketing and customer experience, and serves in advisory or leadership roles for several industry organizations. Ginger was honored with a Silver Apple lifetime achievement award for her contributions to the marketing industry.​

Find her at @customeralchemy and on LinkedIn.