The State of Personalization Maturity – Q4 2021

Pandemic’s acceleration of digital synchronous with advancements in personalization

Executive Summary

During an era already marked by connectivity, McKinsey predicts COVID-19 has propelled the digitization of business and consumer interactions forward by several years.1 Forced to transform operations to not only meet the increased demands that followed, but also keep a wave of fresh competition at bay, companies are prioritizing the customer experience at an unprecedented rate.

Given the need to quickly adapt to new and constantly changing shifts in consumer behavior, it’s no wonder personalization would become an integral part of this work. In fact, Gartner found 32% of marketing leaders expressed it was among their top three digital objectives for 2021.2

To better understand the impact of this acceleration on personalization, Dynamic Yield conducted its annual maturity survey across roles and sectors in the Americas (AMER), Europe and the Middle East (EMEA), and the Asia-Pacific (APAC) regions. This marks the fourth consecutive year publishing our research, which includes more than 450 responses from individuals in the C-Suite, Marketing, Merchandising, CX, Product, and IT.

Findings:

  • Consistent over the last four years, most organizations believe in the value and benefits of personalization (93%).
  • The majority have also made personalization a top priority within the company, and more plan to invest further in it than in 2020.
  • To capitalize on the perceived value of personalization, additional resources have been made available that were not seen in previous years.
  • This has inspired a more structured approach to tailoring digital interactions, with adequate processes and teams now in place to manage campaigns.
  • With greater collaboration and efficiencies, companies have been able to make more data-driven personalization decisions.
  • Which has resulted in heightened instances of personalization on the site, and quantitative success stories to back up their impact.
  • All leading to a greater level of maturity, the industry has moved from Basic to Advanced for the first time in years, signaling increased adoption amid COVID-19’s digital awakening.
  • However, one major area of opportunity persists around the need for personalization unification across the stack, currently limiting the delivery of cohesive, cross-channel experiences.
All of the findings are presented in detail below

Global Snapshot

Culture
7%
23%
42%
28%
Leadership
8%
32%
50%
10%
Resources
13%
33%
39%
15%
Processes
14%
29%
42%
15%
Technology
22%
46%
15%
17%
Data
6%
36%
45%
13%
User-Centricity
26%
29%
31%
14%
Impact
22%
20%
35%
23%
Absent
Basic
Advanced
Pioneer

The 8 Signals of Personalization Maturity

Based on criteria such as internal commitment to personalization, allocation of resources, process implementation, access to data, technology stack integration, and more, we identified 8 signals to help measure a company’s personalization maturity. Companies are then bucketed into 4 levels of maturity: Absent, Basic, Advanced, and Pioneer.

Here’s a bit more on each signal:

SIGNAL 1 – Culture
The organization believes in the value of personalization

Those who stand to gain the most out of personalization don’t simply see the benefit of personalization and understand its impact on the large business strategy, but have gone so far as to make it core to how they influence the customer journey.

SIGNAL 2 – Leadership
Personalization is prioritized as a company-wide strategic initiative

Requiring buy-in from key stakeholders in marketing, IT, product, and analytics, an effective personalization program is one in which the proper investments are continually made to unlock resources and foster cross-departmental collaboration for its ongoing development and bettering.

SIGNAL 3 – Resources
The right resources are in place to run personalization

Leadership then needs to appoint the right business and technical talent, prioritizing personalization orchestration among other departmental programs or activities, allowing for the timely and coordinated delivery of campaigns across key digital channels.

SIGNAL 4 – Processes
A centralized team aligned on processes drives personalization

Effective personalization is a truly coordinated effort, made increasingly possible by the designation of dedicated owners within business, technical, and creative functions as well as the creation of one unified methodology and vision to operate against.

SIGNAL 5 – Technology
Personalization technology is deeply integrated within the tech stack

Built on the premise of delivering relevant, cohesive experiences, personalization must be incorporated into existing marketing solutions to create a unified approach. Doing so will also allow for the optimization of campaigns by machine learning and AI based on all available sources, not just channel-specific data.

SIGNAL 6 – Data
Data-driven decision-making is effective across marketing initiatives

Personalization requires data to be accessible, easily activated, and ideally available in real-time to reflect the most up-to-date information about a user. Additionally, all experiments should be informed by proprietary empirical data or prior test learnings, increasing the likelihood of high-impact results as well as incrementality.

SIGNAL 7 – User-Centricity
The organization is able to personalize customer experiences

With no such thing as the “average visitor,” anymore, an organization must be able to identify its high-impact segments and cater to their distinct needs, which necessitates joining up data and experiences from one channel to another for a 360 degree view.

SIGNAL 8 – Impact
The organization can share personalization success stories

The initial acceptance and long-term sustainability of a program hinges on communicating the business impact of personalization through quantifiable KPIs that are documented and trackable within dashboards and reports – this creates alignment among all stakeholders involved, executive- and practitioner alike.

SIGNAL 1

Culture

Belief in the value of personalization has not wavered over the last four years

This year, 93% of global companies shared that they either believe in the value personalization, understand its benefits to the larger business strategy, or have made it the core to their CX operations. Reflective of a consistent trend we’ve seen since the inception of our research in 2018, the market remains Advanced in its level of maturity as it relates to Culture.

  • 28% of organizations globally cite personalization is core to how they impact the customer journey, nearly identical to our findings in 2020, with APAC slightly ahead in this regard (31%), compared to AMER (29%) and EMEA (24%).
  • The majority of respondents (42%) shared that a personalized approach to the customer experience can positively impact the larger business strategy.
  • And only 7% globally communicated an overall disinterest in the idea of personalization, with the lowest reported numbers among those within APAC (3%).
Does your organization believe in the value of personalization?
Global
7%
23%
42%
28%
AMER
7%
20%
44%
29%
APAC
3%
29%
37%
31%
EMEA
10%
24%
42%
24%
No
Somewhat
Yes
Absolutely
Our take on the findings
Popularized as the new holy grail of marketing only a few short years ago, the benefits of personalization have only continued to crystalize and become more widely understood. And with the lion’s share of experiences moving online post-pandemic, the value derived from tailoring the customer experience to each individual’s in-the-moment needs is now intrinsic to most brands.
SIGNAL 2

Leadership

Personalization makes progress in the way of strategic prioritization

Up from 39% in 2020, this year, half of organizations reported personalization is a top business priority. Additionally, merely 8% of respondents shared personalization is not a strategic initiative for their company – 5% less than last year. Despite the positive changes, the market hasn’t yet made it to Pioneer, but it did reach an Advanced level of maturity for the Leadership signal in 2021.
  • Nearly identical to the last three years, only 10% of respondents globally claim personalization is already part of their DNA.
  • Although APAC reports the lowest in terms of making personalization a top priority (44% compared to 52% in AMER and 48% in EMEA), 12% state it is already part of their DNA, putting it just ahead of the other regions.
  • AMER is making solid inroads, with 16% more reporting they plan to invest in personalization than the 36% in 2020, versus +4% in APAC and +8% in EMEA.
  • While down 7% YoY, 32% of global companies have discussed personalization but not not allocated resources to it yet.
Has your organization prioritized personalization as a company-wide strategic initiative?
Global
8%
32%
50%
10%
AMER
7%
30%
52%
11%
APAC
11%
33%
44%
12%
EMEA
8%
35%
48%
9%
No
Somewhat
It's a Top Priority
It’s Part of our DNA
Our take on the findings
Following the onset of the pandemic, organizations continued to see why personalization should hold its place as a top marketing priority, helping to better position and future-proof the business as more and more commerce went digital. The real test is whether companies have made good on their word to invest in the proper resources to prove that value internally.
SIGNAL 3

Resources

Capitalization on personalization’s value opens door for additional resources

For the first time in 4 years, organizations have scored Advanced when it comes to Resources, with 39% sharing that support is available on-demand when a business case is made for it (up 15% from 2020). And though 33% of personalization efforts are still heavily reliant on openings in the development team’s roadmap, this response was 12% less than the previous year.

Further, just 13% of companies reported they completely lack the resources for running personalization, a notable decrease from 22% in 2020.

  • 15% of respondents across the globe shared they have wholly devoted resources in place to successfully launch personalization campaigns across channels, a small but positive 6% increase YoY.
  • Despite 17% of respondents in AMER citing they have a dedicated team in place for personalization (compared to 15% in APAC and 12% in EMEA), more in this region also reported lacking ample time and money than any other region (15% versus 12% in APAC and 10% in EMEA).
  • Up 19% from last year, EMEA made big strides in their ability to deploy campaigns, with 42% now citing access to a small, channel- specific team.
  • This year, EMEA (42%) and APAC (40%) both nearly doubled the reported amount of access they have to on-demand resources when a business case is made.
Do you have the resources you need to run personalization in your organization?
Global
13%
33%
39%
15%
AMER
15%
32%
36%
17%
APAC
12%
33%
40%
15%
EMEA
10%
36%
42%
12%
No Resources
Limited
Yes, On-Demand
Absolutely, Dedicated
Our take on the findings
Recognizing that valuing personalization and actualizing its benefits are two separate things, especially in an increasingly saturated marketplace, companies have finally started to commit to embedding the practice more deeply into their operations, carving out the people, time, and resources for proper orchestration.
SIGNAL 4

Processes

From ad-hoc to small teams now responsible for the majority of implementation

Almost half of respondents (42%) now have at least a small team and some level of defined processes in place to launch personalization campaigns for specific channels. This 20% uptick from last year has bumped the market to an Advanced level of maturity in the area of Processes for 2021.

However, a fair amount of companies (29%) still come up with ad-hoc processes to serve in-the-moment needs, an unchanged trend since last year.

  • Only 14% of companies globally don’t have any people or processes to support personalization, a major development from the 37% of respondents that reported the same in 2020.
  • At 19%, AMER reports the most instances of cross-functional teams for the consistent personalization of various channels, a 6% increase compared to 2020.
  • Up 19% from last year, EMEA made big strides in their ability to deploy campaigns, with 42% now citing access to a small, channel- specific team.
  • Down 23% from 44% last year, 21% of those in APAC shared they still don’t have anyone to drive personalization (compared to 13% in AMER and 12% in EMEA).
Do you have a centralized team that drives personalization?
Global
14%
29%
42%
15%
AMER
13%
24%
44%
19%
APAC
20%
29%
37%
14%
EMEA
12%
37%
42%
9%
No
Ad Hoc
Yes, Channel-Specific
Yes, Cross-Functional
Our take on the findings
Beyond resource allocation, organizations are putting the necessary processes in place to create alignment and establish cooperation between key stakeholders, which can often be more easily achieved by funneling efforts under one dedicated cross-functional team or smaller ones oriented towards specific channels.
SIGNAL 5

Technology

Channel-specific deployment persists, impeding on unified approach to personalization

The only signal to remain Basic this year has to do with Technology, with the largest majority of respondents, 46%, claiming personalization is integrated piecemeal via different channel-specific solutions. This makes critical data unification for personalization essentially impossible, representing one of the biggest inhibitors to program success for organizations today.

However, this year we saw 13% less in the way of organizations citing personalization was completely absent from their marketing stacks (35% in 2020 vs. 22% in 2021).

  • Even better, at 17%, nearly double the number of marketers reported personalization is at the core of their tech stack this year compared to 2020 responses, with increases seen across regions (+8% in AMER, +7% in APAC, and +7% in EMEA).
  • 15% of companies globally declared personalization technology is somewhat integrated with other elements of the stack, a number highest among those in EMEA, at 18%, compared to 15% in APAC and 13% in AMER.
  • Organizations in AMER have seen the largest decrease in Absent-level responses, with 17% stating personalization is not a part of the stack (down 19% from 36% last year). EMEA saw a 15% dip, and APAC, just 2%, with about 1/3 of this region making up a large majority of these responses.
How deeply is personalization technology integrated within your tech stack?
Global
22%
46%
15%
17%
AMER
17%
52%
13%
18%
APAC
33%
36%
15%
16%
EMEA
23%
43%
18%
16%
It’s Not
It’s Channel-Specific
Somewhat
Deeply
Our take on the findings
While companies have made significant investments in people and processes, without unifying personalization across the stack, they will continue to miss the mark with experiences that don’t resonate with the user’s current needs. Some may have opted for lower priced point solutions to serve channel-specific needs, but managing vendor bloat actually increases the total cost of ownership. A unified or open architecture solution is much easier to operate and can eliminate silos in activity for cohesive personalization.
SIGNAL 6

Data

Newfound collaboration sparks more effective use of data in decision-making

Jumping from Basic to Advanced in the area of Data, 45% of global companies reported theirs is now available in real time to inform marketing activities, a 17% uptick from 28% in 2020. Breaking down these same responses regionally, we saw a 26% increase in AMER, 22% uplift in EMEA, and an 8% decrease in APAC.

  • Additionally, the amount of respondents who shared that data is available but requires time and resources to act on it has dropped from 52% to 36% this year, most notably in AMER (-25%) and EMEA (-18%), with APAC up +3%.
  • While still small, the number of companies able to use data masterfully for predicting and discovering business opportunities with machine learning and AI has now doubled to 13%.
  • Inversely, only 6% of companies globally cited their data is not yet fully accessible or comprehensive enough to utilize (more so in APAC, at 12%, and EMEA, at 8%), a number which has gone down 7% globally from 14% in 2020.
How effective is your data-driven decision-making across marketing initiatives?
Global
6%
36%
45%
13%
AMER
4%
34%
47%
15%
APAC
12%
40%
36%
12%
EMEA
8%
38%
45%
9%
Not At All
Somewhat
Very Effective
Masterful
Our take on the findings
In recent years, companies either didn’t have enough data or there was too much of it to make sense of, creating difficulties in knowing where to start and how to master it. But as more teams have put processes in place to identify, tailor, and analyze against key user behavior, the better they’ve become at using data to inform future decisions. And once personalization technology is integrated in a unified way, they stand to be able to predict and automatically discover additional opportunities through machine learning and AI.
SIGNAL 7

User-Centricity

Combined overall efforts translate into greater ability to tailor experiences

Historically Basic, 2021 marks the first year global organizations scored an Advanced level of User-Centricity. Up from merely 10% last year, 31% of respondents shared that they are now able to personalize most digital interactions, a huge positive signal, even if they don’t join up those experiences with other devices.

Trailing closely behind, 29% still deploy basic on-site personalization and have yet to truly and consistently plan, execute, and analyze tests at the audience level.

  • Globally, 14% of companies have achieved a single view of the customer to allow for each channel to affect how the other is personalized, up 6% from 2020.
  • From a regional point of view, 1/3 of those in AMER know who their users are (+25% YoY), followed by 32% in EMEA (+23% YoY) and 19% in APAC (+5% YoY).
  • 1/3 of companies in APAC treat all users the same across channels, a struggle consistent with last year (37%). Additionally, another 1/3 in this region only personalize with limited segmentation, which is seen less in AMER (24%) and EMEA (26%).
How well are you able to personalize your customer’s experiences?
Global
26%
29%
31%
14%
AMER
24%
27%
33%
16%
APAC
33%
33%
19%
15%
EMEA
26%
31%
32%
11%
We Can’t
Somewhat
Well Enough
Very Well
Our take on the findings
Companies are finding that you don’t just plug in personalization and instantly witness results. Technology is the means through which the right methodologies and segmentation principles can be executed. However, we can see the limitations of channel-specific solutions in that most instances of personalization do not currently extend beyond the web, reinforcing the need for unification yet again. This would ultimately unlock the ability to create a single view of the customer, allowing for true journey cohesion.
SIGNAL 8

Impact

Businesses are
reaping what they sow, corroborated by positive success stories

A dramatic change from the 37% of companies that were unable to produce any positive accounts of personalization in 2020, this year, just about the same amount (35%) can now tie their work to quantitative results. This marks a leap from an Absent level of maturity to Advanced for the Impact signal.

Even more promising, 23% of companies globally reported their stories documented and backed by big numbers (vs. a meager 6% last year).

  • 22% of respondents claimed their personalization success stories are non-existent, down 15% year-over-year, even more so in EMEA (-20%), followed by -14% in AMER, and -7% in APAC.
  • Organizations in AMER and EMEA witness similar levels of success, with roughly 1/4 of marketers in both regions able to share inspiring stories of personalization.
  • 20% described anecdotal stories of small improvements with little to no substance, the greatest majority in EMEA (26%), then APAC (23%) and AMER (16%).
Your organization’s personalization success stories are...
Global
22%
20%
35%
23%
AMER
22%
16%
37%
25%
APAC
32%
23%
26%
19%
EMEA
17%
26%
35%
22%
Non-Existent
Anecdotal
Quantitative
Inspiring
Our take on the findings
Setting more personalization campaigns live doesn’t guarantee success. It’s clear that putting a rigorous framework in place to ensure each test has a clear hypothesis, data or evidence to support it, a strong implementation plan, and the right KPIs for measurement does. Most companies have also come to understand that even negative test results can yield valuable insights which can be used for optimization, all leading to greater instances of documented wins.

Keeping a foot on the gas pedal of maturity

Our 2021 report supports that the global market has matured in its personalization efforts as a direct result of the digital acceleration brought on by COVID-19. Companies that once simply valued the idea of personalization have finally started to actualize its benefits, pumping sufficient resources into the people and processes required to turn data into scalable strategies that are leaving a tangible impact on their bottom line.

Per the Organization for Economic Cooperation and Development (OECD), the pandemic has created a “swell of digitally enabled economic and social activity” that they believe is likely to remain high even as the pandemic dies down. This means an organization’s work in personalization is never done, as the stakes around digital access and engagement are higher than ever before – and with no signs of slowing down.

Looking to 2022, teams must champion for deeper integration of personalization within their technology stack. In doing so, they can not only unify their efforts but also automate and optimize the delivery of campaigns based on all available data. The output of this has the potential to improve the level of maturity across all other signals, from Resources to Processes, Data, User-Centricity, and Impact all the way through to Leadership and Culture.