1. Part I: Getting Personal with Your Customers —
Fighting Marketing Fatigue
Part one of a two-part series on automated interactive one-to-one
personalization
AUGUST 2010

2. How relevant are your marketing campaigns?
Mass mailing, mass emails or SMS blasts — ask any business to consumer
(B2C) marketing professional what they think of them and they will probably
tell you there’s been a shift away from such indiscriminate approaches in favor
of more targeted campaigns. And they’ll tell you that the main reason for this
shift is that customers are more demanding; asking to be recognized as
individuals and expecting communications to be relevant to their unique
lifestyles, wants and needs.
“Consumers are
Accordingly, in a 2008 survey conducted by the Aberdeen Group, 96 percent
taking ever more of marketers said they thought One-to-One personalization would improve
response rates1.
direct action to avoid
But despite marketers being positive about the concept of personalizing
communications campaigns, evidence suggests that in reality, marketers are not going far
enough to actually make their campaigns relevant to individual consumers.
from companies Consequently, response rates to campaigns are inexorably declining and direct
marketing effectiveness is waning.
pushing irrelevancy.” CEOs are — quite rightly — putting their marketing directors under pressure
to deliver more value from marketing investments and initiatives.
Marketing fatigue
There’s a growing body of evidence to show that the cause of the decline in
response rates is that consumers are simply fed up with being bombarded
incessantly by overwhelming quantities of irrelevant marketing material.
Research quoted by analysts Forrester Research Inc., is sobering:
2
• “Say they receive too much marketing. Two-thirds of U.S. consumers (66%)
say there is too much advertising today. Sixty-two percent say they get too
much direct mail, 66% say they get too much email marketing, and 67% get
too much telemarketing.” (see Figure [2] ).
• “View marketing as irrelevant. Only 14% of U.S. consumers agree that the
ads they see are relevant to their wants and needs, and even fewer agree
that the direct mail (10%) and email marketing (7%) that they receive is
relevant.” (See Figure [1] ).
“Indicate how much you agree or disagree with following statements regarding
advertisements over.”
Strongly agree [5] [4] [3] [2] Strongly disagree [1] N=
The ads I see are
relevant to my
personal wants 5% 9% 40% 30% 17% 4,545
and needs
The direct mail I receive
is relevant to my want 3% 7% 26% 30% 35% 4,609
and needs
The marketing emails I
receive are relevant to 2% 5% 19% 26% 48% 4,506
my wants and needs
Base: US adults
(percentages may not total 100 because of rounding)
Source: North American Technographics® Media, Marketing, Consumer Technology, Healthcare, And Automative
Benchmark Survey, Q3 2008
53621 Source:Forrester Research, Inc.
Figure 1: Consumers Don’t Believe That Marketing Is Relevant
2 AUGUST 2010

3. These results suggest that people are suffering from ‘marketing fatigue’ as a
result of the incessant and too often irrelevant product campaigns blasted at
them.
The consumer’s first reaction is — no reaction! They simply don’t pay attention
to communications from companies that have not won their trust through
always being relevant, and they don’t buy the products promoted. Consumers
are taking ever more direct action to avoid communications from companies
“One-to-One pushing irrelevancy. They opt out and register with do-not-call lists. In the case
of marketing emails, they block them as SPAM. At worst, when their patience
campaigns target runs out, consumers may reject not just a brand’s direct marketing, but the
brand itself.
the customer’s
If marketers really are attempting to personalize campaign communications, then
current situation, the only conclusion to draw is that what they are doing really isn’t working.
Evidence suggests that quite typically when marketers talk of personalization,
their expressed what they mean is ‘segmentation-based personalization,’ meaning that all the
customers belonging to a segment selected by the marketer will receive the
and implied wants same message and offer. Sure, the customer’s own name might appear at the
top, but that’s all that is truly individualized. In the 21st century, customers are
and needs.” savvy and expect a lot more before being prompted to engage.
Marketers who do not pay heed to the voice of the customer and simply
continue to target them with irrelevant messages and campaigns, do so at
their peril. Such campaigns are counterproductive and unlikely to pay back.
Pushy sales pitches turn customers off; but personally relevant and interactive
conversations switch them on.
The One-to-One Personalization Era Starts Today
One-to-One personalization has long been held up as a kind of marketing
nirvana — an idyllic state where the brand can hold personal relationships with
potentially millions of customers. Here, well considered offers are presented as
a part of natural customer marketing conversations. One-to-One campaigns
target the customer’s current situation, their expressed and implied wants and
needs. Messages are timely and relevant for the customer and they deliver the
desired results for the marketer. But just how far away are marketers from this
holy grail?
Levels of personalization
There is evidence that five degrees of personalization exist today within
marketing organizations:
• Mass emailing, where one message is sent to all.
• Name based personalization (or light personalization) is superficial. The
customer’s name is typically placed at the top of what is otherwise the
same message sent to all recipients. Customers can see through this and
quickly tire of opening messages that are still no more relevant in content.
• Segment based personalization (or medium personalization), goes one step
further. It hinges on selecting often very large target groups, then creating
one message for each group. All of the people in each target segment
receive the same message. Even though each customer is an individual and
has their own relationship with the company — their own preferences, and
interaction history — none of that is referred to in the communication they
receive.
3 AUGUST 2010

4. • One-to-One personalization (or heavy personalization), comprises content
that is specific and relevant to the individual customer. It’s drawn from a
detailed and living profile of the customer, their profile, behavior, needs,
wants. Name and address, offer content, partner offers, branding and layout
can all be adjusted to provide a best fit for every individual customer.
Communication channel used and frequency of contact is respectful of
customer preferences as well. Increasingly marketers are willing to shift to
One-to-One personalization.
“Pushy sales
• Interactive One-to-One personalization. This applies the One-to-One concept
pitches turn to interactive channels, enabling content delivered through web pages and
online assistants (avatars), for example, to be personalized in real-time
customers off; while being consistent with messages delivered through other channels
but personally Aberdeen has observed the proportions of organizations practicing these
various degrees of personalization:
relevant and Level of Personalization Percentage Currently Using
interactive Mass emailing 43%
conversations Light personalization 63%
switch them on.” Medium personalization 33%
Heavy personalization 16%
Figure 2: Personalization Trends in emails (Source: Aberdeen 2008)
The reality is that when marketers say they are practicing personalization,
they are usually referring to ‘light’ or ‘medium’ personalization. i.e. name or
segmented personalization. Only 16% of marketers are actually using One-to-
One personalization (Heavy personalization) to tailor their messages to
customers’ needs.
Does One-to-One Personalization work?
There is evidence to support the concept that as personalization increases,
marketing fatigue falls and conversion rates increase to a model approximated
by the following diagram:
Conversion
Rates
Value ROMI
Interactive
One
-To-
One One
-To-
One
Segment
Name
None
Maturity Fatigue
Timeline
Personaliztion Sophistication/Maturity
Figure 3 (Source: Neolane, Inc)
4 AUGUST 2010

5. The evidence for this concept comes both through market research and
through empirical observation.
Market research evidence
According to a survey reported in Print Week3:
• 70 percent of UK adults say they are 5-10 times more likely to respond to
‘properly personalized marketing’ compared to superficially personalized
Conversion rates direct mail.
improve by • 66 percent of UK adults say they are more likely to respond to direct
marketing that reaches them at the right time.
22 percent when An independent analyst firm4 has also conducted research that suggests that a
move from segmentation-based marketing to One-to-One personalization can
shifting from makes a tangible difference. The findings suggest that:
segmentation based • Conversion rates improve by 22 percent when shifting from segmentation
based personalization to One-to-One.
personalization to
• Customer retention rates improve by 60 percent when shifting from
One-to-One.” segmentation based personalization to One-to-One.
Empirical evidence
There is an increasing amount of experiential evidence from companies that
have made the switch:
• Accor Hotels: The world’s fourth largest hotel group increased online
revenue by $200 million. A survey of customers revealed that 35 percent of
newsletter subscribers were directly influenced in booking a room by the
personalized communications they had received.
• EMI Music (France): In 18 months, EMI improved it’s digital revenue and
tripled its customer database size when it personalized the content of artist-
to-fan communications via email, mobile and social.
• Sephora: The beauty chain with 500+ stores worldwide doubled response
rates when it switched to personalized-content direct mail.
• Bales Worldwide: The luxury travel operator conducted a champion/
challenger campaign comparing segmentation versus One-to-One based
personalized emails. It measured an increase in conversion of 100 percent
and a tripling of brochure mailing responses. The firm credits campaign
personalization with delivering a five percent revenue growth.
• AXA Bank: Personalized approaches raised opening rates of loyalty emails
to 60-80 percent and achieved a 5-10 percent conversion rate.
• DigitalGlobe: The satellite imagery provider improved email opening rates
by up to 15 percent and reduced opt-outs to 0.33 percent.
5 AUGUST 2010

6. The way ahead
To reach customers in ways that they accept and prompt positive responses,
campaigns must be relevant. Content and timing must be individualized to
each customer’s circumstances and it must be consistent and coherent across
all channels — direct mail, email, mobile messaging, call center, Web and
social media. There is an increasing body of survey and case study evidence to
prove that One-to-One personalization is the answer: evidence that conversion
rates leap as relevancy is improved.
Companies must get more personal with their customers and marketing
technology now provides the answer.
We invite you to learn more about how Neolane can help your organization
fight marketing fatigue. Contact Neolane at +1 617 467-6760 or visit
www.neolane.com. Please look for the second installment of our series,
“Getting Personal with Your Customers – Beyond Segmentation,”
available soon.
About Neolane
Neolane provides the only enterprise marketing software specifically designed to
manage, automate and optimize programs across traditional and emerging
channels including direct mail, email and mobile. With Neolane’s cross-channel
marketing and lead management solutions, marketers can manage campaigns,
resources, customer data and analytics from a single platform to dramatically
improve effectiveness and ROI. Built by marketers for marketers, Neolane is used
by more than 240 of the world’s leading companies including Accor Hotels,
Alcatel-Lucent, Orange, and Sephora.
1 “Email Marketing — Get Personal with your Customers,” Aberdeen Group, June, 2008
2 “Marketers: Stop the Abuse! Adopt Preference Management,” Forrester Research, Inc., July 2009
3 Print Week: GI Direct survey: Properly personalized direct mail boosts business, March 2009
4 Aberdeen 2008 — ‘Email Marketing: Get personal with your customers’
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7 AUGUST 2010