Consumers want personalized experiences. We all know it. But delivering on this mandate is a challenge—to say the least. It requires knowing each customer (and potential customer) holistically so you can identify and accurately reach real people across devices and interactions over time with relevant messages.
It’s easy to talk about the importance of identity in marketing, but according to new research, it’s proving much harder to implement in practice.
We commissioned Forrester Consulting to conduct a study to understand the current state of identity resolution in brand marketing. Forrester surveyed more than 200 brand marketers on their identity resolution strategies and how they apply to their marketing efforts.
Unfortunately, the results aren’t great—and it’s important to understand why. What’s holding marketers back?
Most marketers are struggling with identity
While 66% of brands have had an identity program in place for at least 12 months, only half of marketers say they are fully capable of fundamental identity resolution capabilities.
The report explains:
“More than half of respondents said their brands struggle determining the right audiences for online campaigns, resulting in wasted marketing spend. More than half also struggle to prove the performance and measurement of customer marketing, and half said their brands struggle with optimizing online campaigns…”
It turns out that most of these problems can be explained by four key deficiencies:
- A limited scope of identifiers
- Inconsistent connection to measurement
- Failure to tie programs to performance
- Lack of awareness and coordination
1. Limited scope of identifiers
The findings show that most brands’ identity resolution programs rely on identifiers like email, IP addresses or login data. These identifiers, particularly email, are very important for identifying people online, but those alone don’t give you a complete picture of an individual. Even with email, brands are only getting an understanding of their customer through interactions with their own brand as opposed to a more holistic understanding of who the customer is, where else they shop, what they buy, etc.
Many marketers are leaving out other valuable identifiers that contribute to a robust identity. Forrester’s report explains that “Over half of brands’ identity resolution programs ignore several important sources of valuable data and insights.”
There is one particularly useful identifier that’s highly underleveraged: transactional data. Only 40% of marketers incorporate online transactional data into their programs—and that number drops to only 31% for offline transactional data. Yet it’s this transactional data that offers the gold standard for identifying people. Why? Because you always use your real name and address when you buy something.
Learn more about why transactional data is so important to identity from Dave Scrim, our SVP of product management, in this video.
2. Inconsistent connection to measurement.
The Forrester research indicates that brands are more likely to use identity programs for things like customer preference management and profile development than for measuring online and offline performance or attribution.
This approach allows brands to make sure they know each and every person they reach and measure that person’s transactions with the brand—consistently quantifying real ROI. On the flip side, poor identity connections start a ripple effect of poor performance, creating drop-offs in ongoing conversations and offering no way to judge the true impact of marketing efforts over time.
Hear more about measuring reach in this video with Sara Stevens, VP of product management.
When it comes down to it, identity resolution should be considered the first step in end-to-end measurement. Setting this expectation up front allows you to learn more about your known and unknown contacts while also optimizing the full marketing execution.
3. Failure to tie programs to performance.
Many identity resolution programs fail to support marketers because they aren’t tied to primary marketing objectives—like reducing waste and increasing revenue. For example, only 29% of respondents said that their firms receive excellent support from identity resolution programs for reducing marketing waste.
How should an identity program reduce waste, you may ask? If you’re connecting with real people—and the right people—from the start, your marketing will reach only your best audiences. You won’t be wasting marketing spend on a more general swath of people that could be right for your brand. It’s the perfect tool to optimize spend.
Forrester’s research also found that only 42% of respondents said they receive excellent support with their identity resolution programs for helping increase revenue per customer, and only 33% for decreasing customer attrition.
Yet a high-functioning identity resolution program solves for these challenges, too. The more a brand knows about each individual as they evolve over time, the more personalized offers and recommendations the brand can provide, increasing lifetime value and improving retention.
For example, let’s say Jen has been a retail brand’s regular customer, buying women’s clothing throughout the year. However, her transactions indicate that she often buys high-end girl’s items in June and around the December holidays (for Jen’s daughter’s birthday and for Christmas, respectively). The retailer can use this knowledge to personalize offers for girls’ clothing and accessories in May and November—even changing out the offers each year as her daughter gets older.
Good identity is the underpinning of all marketing success. Don’t underestimate the contribution identity resolution can make to improving a brand’s performance across the board.
4. Lack of awareness and coordination.
The final reason so many identity programs are failing is a lack of C-suite awareness. In our research with Forrester, executives consistently overrated the performance of their identity resolution programs, compared to director-level respondents with more day-to-day visibility.
Executives in our study were:
- 25 percentage points more likely to be extremely confident in their customer ID profiles’ completeness and accuracy
- 32 percentage points more likely to rate their programs’ persistence as excellent
- 16 percentage points more likely than directors to believe their brands were ready to immediately leverage new online and offline customer data to update customer profiles and activate against new information
As a result, many brands lack consensus on identity resolution challenges and opportunities, and there is a lack of clear program ownership among different organizational silos. The net result of this misalignment is significant damage to a brand’s ability to succeed.
As one senior director explained in the qualitative findings, “A key challenge for us is there’s so little alignment across our company—knowledge, insights between different analytical resources don’t get shared. It’s like we’re trying to solve the same issues but have different ways of doing it; we definitely need more universal access and communication.”
Forrester concludes that “Brands with misaligned identity resolution are left with broken customer experiences, wasted marketing spend, and lost opportunities to expand customer relationships with relevant cross-sell and upsell offers.”
Limited identifiers. Lack of performance measurement. Misalignment in the organization. Ultimately, these shortcomings result in inaccurate identity programs that hurt customer experiences—and brands’ financial and performance metrics.
Download the full Forrester report to learn more about the industry’s identity challenges—and how to overcome them so that your brand can offer the personalized experiences consumers expect.