Embrace meaningfulpersonalization to maximize growth.
New research on the value of personalized CX.
July 2022

It’s time to make it personal.
“From now on, leading-edge companies—whether they sell to consumers or businesses—
will find that the next competitive battleground lies in staging experiences.”
If that sounds like something you’ve heard
before, there’s a reason: It’s a quote from a
Harvard Business Review article by B. Joseph
Pine II and James H. Gilmore, published way
back in 1998. In the article, “Welcome to theexperience economy,”1 Pine and Gilmore
argued that experiences were the next
frontier of differentiation and pricing
power for businesses.
Today, virtually all marketing leaders haveembraced the premise and promise of theexperience economy. They’re mapping
customer journeys across touch points
and channels, segregating audiences andhouseholds into ever-more-discrete groups,
optimizing messaging and campaigns, tracking
engagement through closed-loop attribution
models and more. Those are all moves in theright direction.
Yet customers themselves say they wantsomething at once bigger and more basic:
They want to be treated as individual, uniquepeople. They want to be heard, understood,
respected. They don’t care about yourcustomer experience—they care about theirown, personal, human experience.
The importance of experience personalization
isn’t lost on today’s brand leaders. Our new
research revealed that 71% of business-toconsumer leaders say personalization has asignificant or very significant impact on theirbrands’ customer strategies, and 58% ofcompanies plan to increase their spend on
personalization in 2022.
But we found a disconnect between whatbrands deliver and what customers actually2

want. Moreover, there’s a wide range ofcapabilities—and of results—among brands
when it comes to personalization. Some arejust getting started in one or a few tactics
and channels, while others are connecting
personalized experiences across channels andtouch points.

69%

2X

Across industries, the brands most
focused on personalization are also thebrands that are winning new customers,
stronger loyalty and increased revenues.
They’re standing out from the crowd andgaining pricing power—while creating valuable,
memorable experiences for customers.

of consumers said they’re more
likely to purchase from a brand that
personalizes experiences.

Personalization leaders were nearly twice as likely tohave exceeded revenue goals in 2021 compared tobrands with low personalization capabilities.

What distinguishes today’s personalization leaders?
Great personalization is about meeting customers in the right moment and context, withthe right experiences to build human, empathetic, one-to-one connections. Getting there
requires advanced data and automation capabilities, collaborative teams and a curated
ecosystem of partners and platforms—all focused on understanding and serving thepersonalized experiences that are valuable to leads and customers.
In early 2022, we surveyed business leaders who are responsible for personalizing
the customer experience at 600 US business-to-consumer companies, plus 1,000 US
adult consumers. From this research we developed a maturity model based on key
personalization capabilities. This report reveals what leaders in experience personalization
are doing right—and how you can apply those lessons to your own business. For more
about the survey methodology and maturity model, see page 14.

68% of consumers
say personalization
increases brandsatisfaction significantly.

3See me, know me.
Consumer expectations are growing every day.
It’s no longer enough for brands to offer great
products and services at fair prices. Those aretable stakes in every industry now. Consumers
now expect brands to show a multifacetedunderstanding of who they are as individuals.
They want to be met and engaged in the rightmoments and their preferred channels, withexactly what they are looking for. And they
demand trustworthiness regarding the ways thatbrands collect and act upon their personal data.

about the capabilities that are most usefulwhen navigating a website or a mobile app, thetop preferences of consumers all depend on
linking past engagement with current activities:functions such as favorites, wish lists or “saved
for later” lists; recommendations based on
past purchases and “purchase again” options;and “most recently viewed” tools.

In recent years, consumer brands have
tried to meet these expectations throughtactics such as retargeting. While that can beeffective when well implemented, too often it
is overutilized and fails to focus on the needs
and preferences of the individual customer. As
a result, instead of feeling engaged, customers
often feel stalked—by ads that follow themeverywhere they go on the internet, or by
daily texts and emails from a brand theybarely know. As a result, more than 50% ofconsumers said personalization tends tofeel off-target and doesn’t meet their needs,interests or preferences.

and other durable details every time they visit
your website. Instead of being treated as arandom shopper, they want to be recognized
as a valued friend—while also having theirpreferences respected regarding where,
how often and why you engage. Toward
those ends, surveyed consumers say theyhighly appreciate personalization of profileand preference options; customization of
products and/or services; recognition basedon their phone number, email or social handle;
and personalization of product and service
descriptions.

So what actually constitutes valuable
personalization to consumers? It starts withthe ability to connect experiences over time
and touch points. For example, when asked

Consumers don’t want to have to remind
you who they are, what sizes and colors they
prefer, what they’ve purchased in the past

When it comes to the specific personalization
capabilities that are most important,surveyed consumers said they most value
personalization of product delivery (fromorder confirmation through status updates

and delivery), pricing and quoting options,and being able to tag or add a favorite item
to a wish list. Notably, most brands fall shortin their ability to support these specificcapabilities—by an average of 22 percentage
points. (See box below.)
It’s important to note that some of the mosteffective forms of personalization can gounnoticed by consumers. While surveyed
brands said they personalize an average of
56% of customer experiences, consumers
only recognize that 38% of experiences are
personalized by the brands they do businesswith. This gap isn’t surprising; we all probably
know someone who thinks “my search results
are the same as your search results.” Similarly,
many consumers don’t recognize when brands
adjust website content, navigation, productdescriptions, pricing or ads to reflect what thebrand knows (or thinks it knows) about thecustomer.
And that’s actually fine.
Great personalization isn’t about telling
consumers, “Hey, I’m looking at you.”
What’s important is that the customer
feels seen—even when the tactics that
support that empathetic connection aren’t
clearly evident.

Brands fall short in personalization capabilities most desired by consumers.
Personalized
product delivery
Consumers:
73% want it

Brands:40% candeliver it

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Personalized
pricing and quoting
Consumers:
61% want it
Brands:42% candeliver it

Ability to tag a favorite, likean item or add to wish list

Consumers:
52% want it
Brands:39% candeliver itPersonalization leaders saw
a 1.5x greater increase
in revenue per customer
and loyalty metrics
compared to brands withlow personalization maturity.

5Connect topersonalize.
What does great personalization look like?
It’s a lot more than just adding a customer’sname to an email. It’s about connecting theright message to the right moment in the rightcontext, based on what you know about theindividual.
Here’s what that looks like for one customer,
Brittany, as she engages with her favorite
clothing retailer.

1. RIGHT MESSAGE:

2. RIGHT PERSON:

3. RIGHT CONTENT:

Brittany receives an email that begins,“Brittany, here are some ideas on how you
can freshen up your wardrobe this season
for all your occasions.” The email includes animage of a skirt and shirt that she purchasedlast year, plus links to several garments thatwould combine nicely with what she alreadypurchased.

Brittany is instantly recognized when she
visits the brand’s website and her experienceis tailored based on a multidimensional
understanding of her passion for traveling,
the climate in her hometown and other known
details.

The website homepage is customized withcurated outfits based on Brittany’s past
purchases as well as combinations for events
coming up in her life: a birthday ensemble, askirt for a night on the town, etc. With a single
click she can “favorite” clothing items thatcatch her eye.

4. RIGHT OFFER:

5. RIGHT CHANNEL:

6. RIGHT MOMENT:As she is browsing, Brittany receives an offer
for free two-day shipping on styles curated
for her, which appeals to her desire for instantgratification. She adds a few favorites to her
cart and completes the purchase.

A week after her shipment arrives Brittany
receives a notification on her phone about
an in-app tool that allows her to take aphoto of any item of clothing and receive
recommendations for matching accessories.
She tests the tool and adds a few items to her
favorites.

Three months later Brittany receives an emailthat includes recommendations on how
to adapt a dress she previously purchased
for the fall and winter seasons by adding a
new jacket and tights. She clicks through… and continues her journey of deepening
engagement.

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2 in 5 consumers said theypurchased more froma brand as the result of
personalization, and 37% said
they recommended thebrand to friends or family.

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What’s good for customers
is great for your brand.
Our research shows that when personalized
experiences are delivered by brands, customers
reward them with greater value and frequencyof purchases, durable loyalty and a willingness
to recommend the brand to others.
These benefits are significantly more
pronounced for personalization leaders—brands with strong capabilities in customer
data management, AI and machine learningfor prediction and dynamic optimization;
real-time omnichannel engagement; and crossfunctional collaboration. A strong majority of
those companies reported improvements incustomer loyalty, lifetime value, engagement,satisfaction and revenue per customer.
By contrast, less than half of low-maturity
companies reported those improvements fromtheir personalization efforts. (See box below.)

And the degrees of the improvements
themselves were significant. Companies withhigh personalization maturity reported nearly
2x the improvement in customer engagement,
more than 1.5x the improvement in customer
loyalty, and more than 1.5x the improvement
in revenue per customer compared to brands
with low personalization maturity.

Young consumers in particular said they arelikely to take action when experiences are
personalized. Gen Z and millennial consumers
are more likely to spend more time engaging
on a brand’s social channels or website,
recommend the brand to friends and family,
and spend more money with a brand that
personalizes experiences.

Consumers themselves reported that they not
only prefer but also take action in response topersonalization. For example, 2 in 3 consumers
said that when they feel a brand experienceis personalized it increases their overallsatisfaction with the brand significantly; and,2 in 5 consumers said that they purchased
more products or services as a result of
personalization. Nearly as many (37%) said
they recommended a brand to friends or family
as a result of personalization.

All of this adds up to accelerated
growth for brands that personalize
experiences effectively. Nearly
half (47%) of personalization leaders
exceeded their revenue goals in 2021—
compared to just 24% of brands with low
personalization maturity. And while only 4%of personalization leaders fell short of theirgoals, 16% of low-maturity brands—4x as
many—came up short.

Brands that deliver personalized experiences are rewarded
with greater value by their customers.
Improved customer
loyalty or higher customer
lifetime value
Personalization leaders69%

Low-maturity
organizations

48%

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Increased customer
engagement

Personalization leaders65%

Low-maturity
organizations

39%

Improved customer
satisfaction or
Net Promoter Score
Personalization leaders63%

Low-maturity
organizations

45%

Personalization leaders saw
a nearly 2x increase incustomer engagementcompared to brands with low
personalization maturity.

9Personalization in practice:
Lessons from the leaders.
Our research found that personalization
leaders are separating from the pack byfocusing on what matters and delivering
personalized, right-moment, right-message,
right-channel experiences at scale.
It all starts at the top—with strategy,
leadership and budget aligned aroundpersonalized experiences. Forty-three
percent of executives at brands withhigh personalization maturity said that
personalization has a very significant impact
on their overall customer strategy—comparedto just 7% of leaders at brands with low
personalization maturity. On average,
personalization leaders reported spending
52% of their total marketing budgets on
personalization—compared to 34% devoted
to personalization by low-maturity companies.
Companies with the highest percentage ofmarketing spend devoted to personalization10

also reported the strongest culture of
personalization driven by leadership andfundamental to the company’s values.
These high-maturity companies are
personalizing significantly more experiences
across more channels, utilizing moreadvanced capabilities. For example, whilemost companies of all maturity levels are
personalizing email, high-maturity companies
are much more likely to personalize advertisingin social media, display advertising, websites
and in-app ads. To do so they’re leveraging
customer data, propensity-to-purchasemodels and real-time decisioning engines toshow customers the messaging, offers andcontent that’s most likely to drive engagement
and action—sending one person a valuesfocused brand ad while sending another atime-sensitive offer for a special price on afavorited product.

Personalization leaders are also much
more likely than low-maturity companies topersonalize the experiences that matter mostto consumers, such as product delivery, theability to tag or like a favorite item, and more.
Going forward, the gap in CX personalization
maturity among brands is likely to grow wider.
Personalization leaders reported they expect
a 44% increase in marketing budgets devoted
to personalization in 2022, compared to just an
11% increase for low-maturity companies. With
that added budget leaders are growing theirinvestments in advanced features including
augmented and virtual reality (e.g., virtual
try-ons), recognition of customers’ emotions
based on audio and visual cues, threedimensional product images, and interactive
product manuals.

All brands face challenges on
the path to personalization.
The successes of today’s personalization
leaders come despite persistent gaps in skills
and capabilities faced by all companies. In our
research we found that organizations of all
maturity levels and industries struggle
with the same talent challenges—mostnotably shortages of people skilled in
artificial intelligence, advanced analytics andvisualization, software development andpersonalized content production. More thana third of companies reported gaps in at least
one of these specific disciplines. And overall,
3 in 4 companies said they lacked the fullrange of in-house talent needed for effective
experience personalization at scale.
Data accessibility and actionability is alsoa challenge for most companies. When data
isn’t updated for a day or more, it makes realtime personalization essentially impossible.
Many people have had the experience ofbuying something online—and then beingchased across the open web by ads for thatsame product. Experiences that are out ofsync with a customer’s needs, preferences andcontext are likely to erode rather than build
trust and loyalty.
Personalization leaders aren’t letting thesechallenges stand in their way. They’re taming
complexity through smart strategy, focused
effort and targeted spend. They’re focusing
on the experiences that matter. And they’rereaping significant rewards as a result.

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74%

of brands said they lacked the fullrange of in-house skills and staff
needed for effective personalization.

82%of brands said they experience
data lags in real-time interactions
with customers.

Personalization leaders are
increasing budgets devoted topersonalization 4x faster than lowmaturity companies, with a focus on
leading-edge capabilities including
augmented reality, virtual reality andfacial recognition.

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Success in the era of
personalized brand experiences.
So what does it take for your brand todeliver personalized, human experiences?
It’s about looking beyond “the customer” tosee real people and the real motives thatdrive them. It’s about prioritizing trust andengagement over transactions and targeting.
It’s about fostering a culture of creativity
and adaptability fueled by customer insights
and framed by shared values. And it’s about
leveraging the best of humans with machines
to deliver the most relevant messages andexperiences, automatically.
None of that happens by accident.
Today’s leading brands are making smart
investments and growing budgets in order tooperationalize human experiences. They’restrengthening governance, integratingteams and connecting a smart ecosystem ofplatforms, tools and partners to help ensurethat they know their customers intuitively,
predict their behaviors accurately, andserve their needs instantly while respecting
personal boundaries
around privacy.
That’s a lot to get right. But brands are
getting there. And in the process, they’regetting ahead of the competition, building
durable trust and authentic engagementthat translates into sustainable growth.

Get in touch
Leala Shah Crawford
Managing Director
Deloitte Consulting LLP
lscrawford@deloitte.com

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Here are some questions to ask yourself as
you accelerate your brand on the journey
toward CX personalization mastery:• Does everyone at your organization understand personalizationand its potential revenue impact? If not, what information will
best illustrate it for them?
• Which (if any) of your team’s metrics goals are reliant on
accelerating personalization?
• What is your action plan to create more meaningful connections
and increase customer engagement?
• Where do your CX capability levels sit in terms of delivering realtime solutions for customers? In what ways will AI and machinelearning enhancements make this easier for your team?
• How can different departments at your organization become
more connected to deliver truly omnichannel, personalized
experiences?
• After meeting with your colleagues, what quantitative andqualitative results of customer connection—and therefore
personalization—do you agree are most meaningful for yourbrand’s long-term growth and identity?

Methodology.
B2C leader survey:
Between February 1 to March 15, 2022,
we conducted a blind survey of 600 leaders
responsible for personalizing the customer
experience at US-based business-to-consumer
companies with 500 or more employees.
Respondents by industry:
Automotive: 8%
Banking and Financial Services: 8%
Consumer Goods: 9%
Education: 4%
Energy and Utilities: 1%
Health Care: 8%
Hospitality: 8%
Insurance: 2%Life Sciences (medical device, pharmaceutical): 1%
Media, Entertainment and Publishing: 9%
Professional and Technical Services: 10%
Retail: 8%
Recreation and Sports: 1%
Technology (hardware, software): 8%
Telecommunications: 2%
Transportation: 3%
Travel: 9%
Respondents by primary sale model:

Consumer survey:
A maturity model was developed basedon survey findings, quantifying a company’s
personalization capabilities based on four
key categories:• Data capabilities• Automation and real-time decisioning

Between February 2 to March 15, 2022, we
conducted a blind survey of 1,000 consumers age 18
and older who had engaged digitally with a consumer
brand and had purchased a product or service froma brand online or using a mobile app in the past 60
days.

• Delivery

Respondents by generation:• Organization

Gen Z: 11%
Millennial: 32%
Gen X: 24%
Boomer: 30%
Silent: 3%

Maturity breakdown:
Personalization maturity model
50%

Respondents by gender identity:

52%

Female: 51%
Male: 48%
Nonbinary or other: 1%

40%
30%

Respondents by race / ethnicity:

25%

20%

23%

10%
0%

Bricks-and-mortar locations: 12%
Direct to consumer: E-commerce (website owned
and operated by your organization): 64%
Direct to consumer: Social commerce: 10%
Direct to consumer: Other: 2%
Direct salesforce: 3%
Third-party marketplaces: 10%

Lowmaturity

Mediummaturity

Personalization
leaders

White: 75%
Black: 10%
Hispanic or Latino: 8%
Asian: 3%
American Indian or Alaskan Native: 1%
Native Hawaiian or Pacific Islander: 0%
Other: 1%
Two or more races: 2%
Prefer not to answer: 0%

Sources1.

B. Joseph Pine II and James H. Gilmore, “Welcome to theExperience Economy,” Harvard Business Review, July 1998,
https://hbr.org/1998/07/welcome-to-the-experience-economy.

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