The Pitfalls of Over-Personalization with CX

From a CX perspective, organizations can address personalization & optimization through a variety of approaches. These can range from using very little personalized data, such as simply capturing anonymized browsing data of all users to determine the types of products or services of interest, or by deploying a more personalized approach using zero-party data, which is information voluntarily supplied by a user in exchange for a more customized experience.

Personalization is viewed as a key element of creating deeper relationships between an organization and its customers. Recent statistics from an October survey of 15,000 global respondents published in the Salesforce State of the Connected Customer highlight the importance and value of creating a deeper level of customer engagement:

  • 66% of customers expect companies to understand their unique needs and expectations.
  • That same report found that 52% of customers expect offers to always be personalized—up from 49% in 2019.
  • Only 27% of consumers completely understand how companies use their personal information.

These statistics highlight the challenges faced by organizations to balance the need to provide truly personalized and integrated experiences, while keeping customers apprised of how they are using that information.

While consumers appreciate the benefits of personalization & optimization, the line between personalized and creepy can be hard to ascertain. Research conducted by Periscope by McKinsey in 2019 with 2,590 consumers in the US, the UK, France, and Germany found that unsolicited communications from companies they do not know was a top issue for US consumers (41%), followed by the unsettling eeriness of location tracking messages (40%).

Additionally, receiving a follow-on message within seconds of making a purchase or completing an online search was named as the second-most-likely cause for concern by US shoppers (38%). Across each region, the survey found that women were more likely than men to feel that receiving location-based messages were intrusive and unsettling.

Fears about what is considered intrusive versus personalized can dampen enthusiasm for personalizing experiences, for fear of upsetting customers. Furthermore, if customers do feel that their experience is too personal or intrusive, the backlash can be swift, damaging the brand and potentially causing customers to flee to other competitors.

Efforts to provide more personalized experiences across the CX landscape are continuing to drive the CX software market. According to Dash Research, the market for personalization & optimization enabling software will reach $11.6 billion by 2026, increasing from $8.1 billion in 2019, and reflecting a compound annual growth rate (CAGR) of 5.2%.

Personalization & Optimization Software and Services Revenue by Region, World Markets: 2019-2026

(Source: Dash Research)

An overuse of personalization can negatively impact the CX if customers are questioning how certain personal information was captured, and whether its use feels overly intrusive or even creepy. Data security and data privacy issues also need to be evaluated and considered, along with proper disclosures on how data is used. But when used appropriately, personalization can improve customer loyalty and retention, and decrease levels of effort for both the customer and the company. Additional market drivers, barriers, and insights into the use of personalization can be found in Dash Research’s CX Personalization and Optimization report, which also contains business-to-consumer (B2C) and business-to-business (B2B) personalization case studies, as well as recommendations for deploying personalization programs that meet the needs of organizations, while retaining customers’ trust. Global market forecasts for personalization & optimization CX software are included, covering the 2019 to 2026 time period, with segmentations by geographic region, segment, product offering, and industry.

Author Information

Keith Kirkpatrick is Research Director, Enterprise Software & Digital Workflows for The Futurum Group. Keith has over 25 years of experience in research, marketing, and consulting-based fields.

He has authored in-depth reports and market forecast studies covering artificial intelligence, biometrics, data analytics, robotics, high performance computing, and quantum computing, with a specific focus on the use of these technologies within large enterprise organizations and SMBs. He has also established strong working relationships with the international technology vendor community and is a frequent speaker at industry conferences and events.

In his career as a financial and technology journalist he has written for national and trade publications, including BusinessWeek, CNBC.com, Investment Dealers’ Digest, The Red Herring, The Communications of the ACM, and Mobile Computing & Communications, among others.

He is a member of the Association of Independent Information Professionals (AIIP).

Keith holds dual Bachelor of Arts degrees in Magazine Journalism and Sociology from Syracuse University.

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