The power of personalisation and how to deliver at scale - Mark Abraham, BCG
Jan 15, 2025
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Mark Abraham, who leads the Marketing, Sales & Pricing practice at Boston Consulting Group and co-authored the book on personalization, dives deep into the power of personalization in the age of AI. He discusses why 2025 is pivotal for personalized marketing and the $2 trillion opportunity it presents. Abraham shares insights on companies excelling at personalization, the challenges they face, and how AI is revolutionizing customer engagement. He emphasizes the importance of leveraging data responsibly to create tailored customer experiences and boost business outcomes.
Mark Abraham highlights that personalization at scale requires integrating traditional data-driven methods with advancements in AI technology for effective customer experiences.
Despite the demand for personalized marketing, many brands struggle with execution, resulting in customer dissatisfaction due to misapplied data and outdated profiles.
Successful personalization strategies demand cross-departmental collaboration and a unified approach, addressing organizational silos to fully realize their potential and financial benefits.
Deep dives
The Evolution of Personalization and AI Integration
Personalization in marketing has evolved significantly over the past few decades, notably with advancements in data and AI technology. Mark Abraham emphasizes the importance of combining traditional data-driven approaches with generative AI to truly achieve personalization at scale. The pivotal shift occurred approximately ten years ago, coinciding with the establishment of dedicated personalization teams and the emergence of AI capabilities, which subsequently enabled brands to tailor customer experiences effectively. This integration is projected to revolutionize how companies interact with customers, ultimately making relevant and personalized communications feasible.
Challenges of Misleading Personalization
Despite the growing demand for personalized experiences, many companies are still getting it wrong, leading to customer dissatisfaction. Common issues arise when brands misapply data or fail to update their customer profiles accurately, resulting in irrelevant communications. The example provided highlighting an individual receiving recommendations for yoga pants after gifting them illustrates the broader challenge of misidentifying customer needs. Surveys reveal that around two-thirds of customers report negative experiences with personalization efforts, underscoring the need for companies to improve their strategies significantly.
Consumer Willingness and Expectations Around Data Usage
While consumers express a desire for personalized experiences, there lies a delicate balance between leveraging data and maintaining trust. Research indicates that when brands provide transparency and clarity about how customer data will be utilized for personalized experiences, consumer willingness to share increased dramatically. However, brands must ensure that the personalization aligns with customer expectations and genuinely enhances their experience; otherwise, they risk appearing invasive. This demonstrates that effective personalization hinges on meaningful customer data exchanges, rather than mere collection.
The Financial Impact of Effective Personalization
The business case for effective personalization reveals substantial financial opportunities for brands that can execute it well, with estimates suggesting a potential $2 trillion growth over five years. Personalization leaders consistently outperform their competitors, achieving 10% faster revenue growth annually. This differentiation is attributed to their ability to leverage customer insights effectively and use data-driven strategies that resonate with their audience. Furthermore, personalization not only influences top-line growth but also significantly impacts shareholder value, reinforcing the importance of adopting robust personalization strategies.
Barriers to Implementation and Organizational Alignment
Implementing personalization strategies is fraught with challenges, particularly due to organizational silos and misalignment among various departments. Successful personalization requires cooperation beyond marketing, involving collaboration with data, technology, and finance teams to create a unified approach. Mark Abraham emphasizes the importance of a clear roadmap that includes input from all stakeholders, fostering alignment and accountability throughout the organization. Ultimately, the willingness to test, learn, and adapt will be crucial for companies to overcome these barriers and unlock the full potential of personalization initiatives.
Mark Abraham leads Boston Consulting Group’s Marketing, Sales & Pricing practice in North America. He also launched and leads the firm’s personalization capability. He has built some of the firm’s largest ventures and AI platforms, including Fabriq Personalization AI by BCG X, a personalization platform that accelerates personalization.
Mark coauthored the book Personalized: Customer Strategy in the Age of AI, which helps executives learn how to put personalization at the center of their strategy, accelerate growth, and capture their share of the $2 trillion personalization prize.
Timestamps
00:00 - Intro 00:49 - Why 2025 is the year of personalisation at scale 01:38 - When personalisation goes wrong 06:04 - Consumer data on our openness to personalisation 07:48 - The $2 trillion opportunity 10:08 - Who is doing personalisation well 14:27 - The competitive advantage of speed and scale 15:50 - How AI is driving personalisation forward 24:15 - The 5 areas to build the framework for personalisation 26:49 - How do you get information about your customer 31:53 - What is the most useful intelligence to gather 37:43 - How to make mass campaigns more targeted 42:36 - Some of the barriers to personalisation 50:19 - Why companies need to embrace AI 53:25 - Parting advice to people on implementing personalisation
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