1、2024 State of CX Personalization ReportExamining the challenges and opportunities for brands to deliver more personalized experiencesIntroductionIn 2024,consumers want more personalization and CX practitioners are making it their top priority.In recent years,weve seen major societal and technologica

2、l shifts that now present brands with greater opportunities to move beyond“one size fits all”experience design.Through advances in AI,customer journeys can now be dynamically tailored at each interaction,seamlessly meeting the unique needs of every consumer at every touchpoint.Were seeing signs that

3、 consumers are more loyal to brands with high-touch experiences.Yet,they also report that brands are falling short of their expectations.1 Do CX teams believe investing in more personalization capabilities warrants the time,effort,and cost?To begin understanding the importance of personalization in

4、customer experience,Medallia Market Research has been exploring the role it plays in consumer brand choice,as well as more specific consumer insights for industries like hospitality and retail.These recent findings revealed that a resounding 82%of customers say personalization drives brand choice.2

5、And of consumers who rate their experiences as very personalized,they rate their overall satisfaction(OSAT)as an impressive 9.4 out of 10.Not surprisingly,for consumers who dont rate personalization that high,OSAT falls to 6.5.3As a result of that consumer research,we partnered with the Customer Exp

6、erience Professionals AssociationTM(CXPA)to better understand how CX professionals are thinking about applying personalization in their organizations.This joint research puts forth answers collected in December 2023 from over 300 CX practitioners globally on how they assess their personalization cap

7、abilities today,the challenges they face,their biggest 2024 priorities,and how artificial intelligence may play a role in their roadmap.We hope these findings play a useful role in setting your customer experience strategy.Andrew Custage Head of Market Research Insights,Medallia1 Do Personalized Exp

8、eriences Matter to Customers?https:/ Ibid3 Understanding Personalization Efforts in the Hospitality and Retail Industries https:/ 2Key FindingsCX practitioners who currently self-rate their brands personalization capabilities the highest are 2x as likely to achieve major revenue growth(10%+)than bra

9、nds that self-rate their capabilities lower.Collectively,CX professionals put improving personalization as their top 2024 priority,ahead of other initiatives like process improvement or new product development.Whether an organization puts improving personalization as a priority or not often comes do

10、wn to budget constraints,closely followed by concerns about complex implementation and process disruption for consumers.Only 24%of CX practitioners rate their personalization efforts as highly personalized,almost identically mirroring previous research that found only 26%of consumers rate their last

11、 company interaction as highly personalized.Artificial intelligence(AI)will be key in delivering personalization at scale,and even more brands are rating their investment in AI as significant for 2024 than in 3024 Top Priorities for CX ProfessionalsPersonalization is being recognized as a

12、 major customer experience imperative for 2024,in the face of technology advances combined with heightened consumer expectations.Though many other priorities ranking in the top 10 can serve as enablers to personalization at scale,such as better use of existing data sources,implementing generative AI

13、,and so forth,the end outcome of improving personalization is most paramount more so than other major company objectives,like new product development or optimizing advertising spend.*From Medallia+CXPA December 2023 CX Practitioner Survey(n=305);“What are the biggest priority areas of investment for

14、 your organization in the upcoming year?”Rank based on%selecting.01 Making customer experiences more personalized04 Better analysis and use of existing data sources07 Enhancements/fixes to current products10 Metaverse/Web302 Operational process improvement/automation05 New product development08 Opti

15、mizing advertising/media spend 03 Employee enablement/productivity06 Generative AI09 Gathering and use of new data 4Understanding Personalization Maturity within IndustriesEvaluating a brands level of personalization,or maturity,requires understanding important context:the industry and the types of

16、customers it serves.Some industries eclipse others when executing how personalized a typical interaction feels.Healthcare,hospitality,utilities,and financial services get the best average scores each likely benefiting from various combinations of high-touch interactions in person,lengthy history of

17、customer relationships,and recurring transaction cycles,with the latter two serving to capture the data needed to deliver more tailored communications.4 For example,our research into hotels found loyalty program members were over 70%more likely than non-members to rate their stay as feeling highly p

18、ersonalized.5*From Medallia Market Research August 2023 Personalization Survey(n=2,001).“For this recent interaction with the company you have been asked about,how personalized did it feel to you?Use your best judgment on what personalized means in terms of interacting with a company.”4 Do Personali

19、zed Experiences Matter to Customers?https:/ Understanding Personalization Efforts in the Hospitality and Retail Industries https:/ rating of most recent interaction%of customers rating 9-10 on 0-10 scale,solely among web/app/phone visitors(excludes in-person)*HealthcareHotel/Home RentalUtilitiesBank

20、ing/Financial Services/InsuranceAll Other(simple average)RetailMedia/TelecommunicationsRestaurant38%31%27%27%23%22%21%21% 5Brand Self-Assessment:Current Personalization CapabilitiesWhen self-assessing their current capabilities,brands across industries believe they feature at least some core element

21、s of personalization in the experiences they deliver.Personalized content and personalized experience orchestration rank higher than other trending marketing/customer experience capabilities like next best action,predictive churn modeling,and generative AI-based customer communications.*From Medalli

22、a+CXPA December 2023 CX Practitioner Survey(n=305);“Which of the following capabilities does your brand currently utilize in the process of interacting with customers?”%selecting each.Proactive customer feedback requests76%Personalized content and recommendations63%Personas/segmentation profiles58%P

23、ersonalized experience orchestration55%Automated marketing/closed loop communications53%Rewards and recognition based on individual customer information50%Customer predictive modeling(e.g.churn risk,detractor risk,etc.)47%Externally-sourced data on consumer base47%Next best action recommendations44%

24、AI-based analysis of customer feedback structured data(e.g.feedback ratings,etc.)41%AI-based analysis of customer feedback unstructured data(e.g.free text,speech,etc.)40%Generative AI-based communications to customers33%Generative AI-based interaction summaries30%Capabilities brands say they have to

25、day: 601 Brands recognize the opportunity to further improve personalization especially through more sophisticated audience segmentationSimilarly to how most customers do not find their interactions with brands highly personalized6,most brands also do not consider their personalization capabilities

26、to be exceptional.*From Medallia+CXPA December 2023 CX Practitioner Survey(n=305);“Using your best judgment,please rate your organizations current ability to deliver personalized experiences to its customers.”*From Medallia+CXPA December 2023 CX Practitioner Survey(n=305)“In your organization,what s

27、ignals or datapoints are typically used to separate customers from others to deliver different communications or experiences?Select all that apply.”%selecting;10 shown here of 18 total choices.6 Do Personalized Experiences Matter to Customers?https:/ practitioners reveal that one improvement area fo

28、r their business would be having more advanced customer segmentation going beyond grouping individuals based on basic attributes like product purchase history or demographics.Areas to explore may include segmenting by forecasted future behaviors or augmented profiles from a wider variety of sources.

29、Only 24%of CX practitioners rate their personalization capabilities as a 9 or 10 on a 0-10 scale.How brands say they separate customers for distinct messages/experiences today:Most often cited35%Product purchase history 33%Demographics31%Duration of being a customer30%Customer preferences/settings 2

30、8%Prior transaction volume/spend amount Least often cited9%Other11%Predicted churn calculation 16%Predicted upsell/cross-sell calculation 16%Original customer acquisition source 18%Customer data externally sourced 702 Brands self-rate most elements of personalization as moderate or minimalBrands may

31、 be handling basic personalization capabilities well such as populating customer and employee names in communications but they are relatively more likely to say they have only moderate or minimal capabilities in areas that actually treat customers differently,such as orchestrating experiences at sca

32、le,or rewarding and recognizing customers based on their unique attributes.*From Medallia+CXPA December 2023 CX Practitioner Survey(n=305);“How would you classify your organizations capabilities in each of the following elements of personalized experience?”How would you classify your organizations c

33、apabilities in each of the following elements of personalized experience?Humanizing elements(e.g.populating customers name/employees name into communications,etc.)47%Flexibility of payment options (e.g.methods,channels,timing,etc.)46%Customizable products sold44%Customizable preferences of communica

34、tion type and channel44%Personalized employee experience programs42%Customizable preferences of service type and channel42%Tailored content and recommendations based on unique customer attributes42%Continuous recognition of the customer across touchpoints41%Targeted offers based on unique customer a

35、ttributes38%Rewards and recognition based on unique customer attributes37%Branded voice and personality in communications and service(e.g.humor,slang,etc.)37%Personalized customer experience orchestration36%No capabilityMinimalModerateAdvancedBest in class%Advanced/Best in C 8Company groupings by 20

36、23 revenue growth rate03 Notable personalization differences exist based on growth rate of company*From Medallia+CXPA December 2023 CX Practitioner Survey(n=305);“How would you classify your organizations capabilities in each of the following elements of personalized experience?”%rating as“advanced”

37、or“best in class”10%+2%-9%Flat/Decline61%41%38%54%39%30%48%36%27%47%34%30%51%39%31%Personalization capabilityFlexibility of payment options(e.g.methods,channels,timing,etc.)Customizable preferences of service type and channelTargeted offers based on unique customer attributesRewards and recognition

38、based on unique customer attributesContinuous recognition of the customer across touchpointsTop personalization capabilities,which include customizable preferences for service channels and retaining knowledge of the customer across touchpoints,are especially noteworthy due to their pattern of being

39、found more often at fast-growing companies than those with flat or declining revenue trends.Percentage of companies rating their capability as“advanced”or“best in class” 973%Agree56%Agree04 CX teams are faced with more financial constraints while continuing to focus on improving customer experienceI

40、n a period when macroeconomic pressures have tightened many budgets,CX leaders are faced with the challenge of delivering on their brand promise to delight customers while proving the value in delivering more personalization.Budget issues are cited as the biggest obstacle to further improving their

41、personalization capabilities,but other reasons include implementation complexities and the risk of upsetting customers due to process disruption.This reveals how successfully adding elements of personalization to the experience is not solely the responsibility of CX teams it requires harmonization a

42、cross IT and analytics,HR,finance,and other departments.7*From Medallia+CXPA December 2023 CX Practitioner Survey(n=305);“For each of the following statements,please select the choice that best represents your level of agreement.”%indicating“agree”or“strongly agree”*From Medallia+CXPA December 2023

43、CX Practitioner Survey(n=305);“For elements above where you feel your organization has room to improve,what is holding you back from doing so?Select all that apply.”Top 9 of 15 reasons shown.Our brand aims to differentiate itself from competitors on the basis of experience,over other characteristics

44、 like price.”“42%29%27%27%27%23%23%21%21%What is holding brands back in maturing their personalization capabilities?Budget constraintsEmployee training and use of capabilitiesSlow timelines for implementing capabilitiesSiloed or inaccurate data sourcesDifficulty proving benefit/ROI of personalizatio

45、n initiativesData analysis quality issuesRisk of disrupting customer comfort with current processesRisk of data privacy,security,and compliance problemsLack of leadership buy-in on personalization initiativesMy organization has a clear way to measure the benefits of investing in customer experience.

46、”“7 The CXPA Effective Collaboration Series:A Guide to Strengthening CX Together https:/www.cxpa.org/grow-your-knowledge/ 1010%+2%-9%Flat/DeclineConsidering the Personalization InvestmentCX professionals who currently self-rate their brands personalization capabilities the highest are nearly 2x as l

47、ikely to achieve major revenue growth.*From Medallia+CXPA December 2023 CX Practitioner Survey(n=305)“Using your best judgment,please rate your organizations current ability to deliver personalized experiences to its customers.”0-10 scale;“At roughly what rate has your companys revenue changed over

48、the past year?”*From Medallia+CXPA December 2023 CX Practitioner Survey(n=118);“You indicated that making customer experiences more personalized is one of the biggest priority areas for your organization in the next year.What are the reasons why it is a big priority?Select all that apply.”%selecting

49、.Top choices shown here of 11 total choices.*From Medallia+CXPA December 2023 CX Practitioner Survey (n=188)“You did not indicate that making customer experiences more personalized is one of the biggest priority areas for your organization in the next year.What are the reasons why it is not as big a

50、 priority as other areas?.”%selecting.Top choices shown here of 12 total choices.However,as budgets play the biggest role in whether or not brands can personalize experiences,it is critical that CX leaders put forward a compelling financial analysis that advocates for the benefits of personalization

51、.Less common barriers for prioritizing personalization include dissatisfaction with vendors(12%)and personalization not being compatible with the rest of the brands offerings(10%).Making personalization a priority:Top reasons why47%Clear benefit/ROI of increased personalization34%Customer dissatisfa

52、ction or lack of engagement31%Strategy has evolved to be fit for personalization30%Vision on where personalization fits in28%Leadership buy-in on specific initiatives28%Competitors are outpacing us in this areaTop reasons why not28%Budget constraints26%Concerns about customer data privacy24%We dont

53、feel our competitors are better than us23%Difficulty showing benefit/ROI21%Lack of ideas or vision on personalization20%Risk of disrupting customer comfortCompanies rating personalization capabilities highest(9-10)Companies rating personalization capabilities moderately(7-8)Companies rating personal

54、ization capabilities lowest(0-6)16%31%25%49%35%48%43%27%25%Companys 2023 revenue growth 11Possible Concerns Regarding PersonalizationWhile concerns about customer data privacy and security is one of the top reasons why some brands arent making personalization a priority,the amount of consumers shari

55、ng similar fears is far from a majority.Some are apprehensive about personalizations likely use of AI-driven interactions,the lengthy collection process to have data on individual preferences,among other concerns.8 But this group,while deserving of attention,may get on board with the majority when b

56、rands offer proper transparency and communication of value.*From Medallia Market Research August 2023 Personalization Survey(n=2,001);“For companies to personalize the experience they deliver to you in the future,it may require some changes from how they interact with you today.For each of the follo

57、wing,please share your view on how accepting you would be with companies doing these things in order to deliver a more personalized experience.”%selecting 1-2 on a 1-5 scale of support level.8 IbidPercentage of customers expressing concern/oppositionMore AI-driven interactions24%Excluding customers

58、from messaging they may have wished they had23%Preference assumptions based on group stereotypes24%Lengthy collection process for individualized preferences20% 12How AI Factors into 2024 Business PlansMany CX practitioners see how AI will fit into their brand strategies,but not all.Still,over a thir

59、d say their organization will be making significant(or higher)investments in AI for 2024,a sizable increase over the proportion who said they did in 2023.And while larger companies are especially likely to be making big investments in AI,they arent alone in doing so.Even a third of smaller companies

60、(under$25M in annual revenue)have what they consider to be“significant”AI investments on their 2024 roadmaps.*From Medallia+CXPA December 2023 CX Practitioner Survey(n=305);“For each of the following statements,please select the choice that best represents your level of agreement.”%indicating“agree”

61、or“strongly agree”*From Medallia+CXPA December 2023 CX Practitioner Survey(n=305);“To your knowledge,how would you characterize your organizations investment in Artificial Intelligence(AI)over the past year/in the upcoming year?”%selecting one of the two highest choices(significant/very high)*From M

62、edallia+CXPA December 2023 CX Practitioner Survey(n=305);“To your knowledge,how would you characterize your organizations investment in Artificial Intelligence(AI)over the past year/in the upcoming year?”%selecting one of the two highest choices(significant/very high)My organization has a clear plan

63、 on the uses and benefits of AI for our business.”“Investment in AI is only increasing:2024 AI InvestmentPercentage citing“significant”or higher,by company sizeChange in the proportion of CX professionals who rate their organizations investment in AI as“significant”or higher.+26%31%39%20232024(Plann

64、ed)49%36%34%Among$1B annual revenue companiesAmong$25M to$1B annual revenue companiesAmong$25M annual revenue companies46%A 13Top AI Use Cases for CX ProfessionalsWhile public buzz may be mostly about generative AI currently,CX practitioners are also recognizing AIs potential in other use cases.Inte

65、rnal uses,especially for advancing the quality and speed of data analysis,are even more commonly cited than content generation.Relevant to personalization,some other use cases include automated actioning for customer interactions and profiling/segmenting their customer base.*From Medallia+CXPA Decem

66、ber 2023 CX Practitioner Survey(n=305);“What are the main use cases of AI that your organization is pursuing?”Among subset indicating organization is making an investment in AI*From Medallia+CXPA December 2023 CX Practitioner Survey(n=305);“How does your organization already,or plan to,measure the i

67、mpact of AI?”Among subset indicating organization is making an investment in AIAnd likewise,the main ways of measuring the success of AI are more likely to be in operational efficiencies than they are in areas that a customer would notice and indicate in the form of feedback.01 Improving quality of

68、data analysis04 Content generation for employee knowledge/productivity 02 Accelerating speed of data analysis05 Simulating or predicting customer behavior/business outcomes03 Content generation for customer-facing communications/assets42%41%34%34%30%30%Percentage of time savedCost reducedRevenue gro

69、wthSpeed percentage improvementCustomer feedback on AI-related experiencesPercentage error reductionHow those investing in AI plan to measure itMost cited ways(of 13 asked) 14ConclusionPersonalizations place at the top of 2024 CX priorities is fitting due to its demand from consumers and recognition

70、 that theres room to improve.For many brands,the ROI potential for increased customer transaction volume and spend is enough to overcome concerns about investment costs or data privacy/security that are causing others to move more slowly.As brands seek to differentiate themselves on the basis of per

71、sonalization,capabilities of focus will be those that can drive recognition of the consumer across interactions,show proactive and compelling forms of customer appreciation,and offer flexibility in how the customer is served.Implementing these requires brands to move beyond having only the personali

72、zation basics like using a customers name in communications or selecting versions of campaigns on simple segmentation attributes like demographics or purchase history.More advanced forms of experience orchestration are becoming table stakes,and recent advances in AI,if implemented correctly,can deli

73、ver these experiences at scale.The next 12 months promise to be an exciting time for seeing cutting-edge personalization come to life even further.MethodologyConsumer sentiment results from Medallia Market Research studies of:(1)US general population(n=2,001),collected in August 2023(2)US retail cus

74、tomers(n=1,905),collected in November 2023(3)US hotel guests(n=1,749),collected in November 2023Each consumer sentiment study was weighted for age and gender based on US census representation.CX Practitioner responses are from a joint study of CXPA and Medallia Market Research(n=305)collected in Dec

75、ember 2023.All participants were pre-qualified based on questions regarding their role and affirming the following statement was true:“I have influence over the experiences we deliver to our customers and prospects.”CX Practitioner Study respondent distribution:Role LevelAnalyst/Associate6%Manager/S

76、r.Manager53%Director/Sr.Director22%VP/SVP/EVP/C-Suite9%Company SizeUnder$5M24%$5M-$100M27%$100M-$1B23%$1B-$25B19%Over$25B7%RegionUS&Canada61%Europe15%Asia&Oceania15%Middle East&Africa6%Latin America3%Other1% 15About MedalliaAbout CXPAMedallia is the pioneer and market leader in customer,employee,cit

77、izen,and patient experience.Medallia Experience Cloud captures billions of experience signals across interactions including all voice,video,digital,IoT,social media,and corporate-messaging tools.Medallia uses proprietary artificial intelligence and machine learning technology to automatically reveal

78、 predictive insights that drive powerful business actions and outcomes.For more information visit .The Customer Experience Professionals Association is the independent global non-profit organization dedicated to the advancement of customer experience as a valued approach that drives organizational g

79、rowth.It supports customer experience professionals throughout their careers by providing them with knowledge and connections to help them succeed.The CXPA facilitates the industry-wide advancement of the discipline of customer experience through the consensus-based CXPA CX Framework and globally re

80、cognized Certified Customer Experience Professional(CCXP)credential.For more information,visit cxpaglobal.org.Follow us:MedalliaMethodologyDistribution of CX Practitioner responses by industry spanned 18 possible categories,with the five biggest being:Industries B2B 16%Retail 12%Financial Services&I

81、nsurance 11%Healthcare&Pharmaceuticals 7%Telecommunications 5%Respondent source Collected through CXPA membership 34%Collected through independent panel of professionals 66%All survey responses in the above studies were collected in English using Medallias Agile Research Platform.Copyright 2024.Medallia Inc.All rights reserved.