A New Book from BCG Provides the Playbook for Harnessing AI to Personalize the Customer Experience.
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GLOIn a world in which consumers expect products, services, and support to be accessible instantly, seamlessly, and in just the way they want—personalization has become a do-or-die business objective.
Over the next five years, $2 trillion in revenue will shift to companies that understand how to create personalized experiences and personalized communications. Most companies aren’t currently doing personalization very well, but new AI capabilities mean companies can personalize with unprecedented precision, and fine tune every customer interaction.
Those who compete using AI-empowered personalization will win today’s war for customers, according to Boston Consulting Group (BCG) executives Mark Abraham and David Edelman in their new book, Personalized: Customer Strategy in the Age of AI (Harvard Business Review Press; ISBN: 1647826276). Predicated on a survey of 5,000 customers across ten countries, interviews with 100 senior industry leaders, and dozens of in-depth case studies the authors were involved in, the book is the definitive guide to harnessing AI to personalize the customer experience.
“Most companies are pursuing personalization in a superficial way, leading to frustrated customers, wasted money, and missed opportunities,” said Mark Abraham, a senior partner at BCG, founder of the firm’s personalization business, and coauthor of the book. “AI-enhanced personalization can cut through the noise and eliminate many of the annoyances customers face—if it is done right.”
Start Your “Personalization Engines”
The authors reveal that personalization campaigns for the average company can take two to three months to run and measure. However, by merging AI and organizational intelligence to learn from every customer interaction, personalization leaders can now run and measure campaigns in a week or less.
To analyze the methods of these leaders, BCG built a measurement system called the Personalization Index™, which looks at a company’s capabilities, the personalized experiences they deliver, and their impact on relative financial performance versus competitors.
According to the BCG Personalization Index, leaders in personalization grow revenue 10 percentage points faster annually than laggards, and enjoy higher customer satisfaction scores.
Many sectors—both business-to-consumer and business-to-business—can benefit from the integration of AI-empowered personalization. The book spotlights several industries where BCG expects the largest shifts will take place, specifically retail, financial services, travel, health care, fashion and beauty, and B2B distribution and technology.
The Five Promises of Personalization
The book distills the formula for successful personalization at scale into the “five promises of personalization,” representing the promises a company should make to its customers—and must live up to—in order to deepen digital relationships with them.
- “Empower Me” is the promise to put the customer’s needs first and enable them to achieve their goals.
- “Know Me” is the promise to win the customer’s trust and gain permission to use their data to improve their individual experience.
- “Reach Me” is the promise to target the right customer, in the right channel, at just the right moment.
- “Show Me” is the promise to tailor messages and content to be relevant to each customer’s needs.
- “Delight Me” is the promise to continuously test and improve over time to better understand the customer and create personalized experiences that feel magical.
“Successful personalization leaders aren’t just implementing AI to optimize their communications. They have embraced a new mindset that promises to put the customer’s needs first,” said David Edelman, a BCG senior advisor, senior lecturer at Harvard Business School, and coauthor of the book. “By cultivating trust and loyalty through meaningful, relevant connections, they establish the foundation for building personalization at speed and scale.”
Learn more about Personalized: Customer Strategy in the Age of AI here.
About the Authors
Mark Abraham is a senior partner at BCG and the founder of the firm’s personalization business, which he has built into a global team of more than 1,000 agile marketers, data scientists, engineers, and marketing tech experts. He and his team have accelerated the personalization efforts of more than a hundred iconic brands and built some of BCG’s largest ventures and AI platforms, including Fabriq by BCG, for personalization. Currently, Mark leads BCG’s North American Marketing, Sales & Pricing practice and is reenergizing the growth and development of talent in what is one of the firm’s largest regional practices.
David Edelman is a senior lecturer at Harvard Business School, an executive adviser and board member to brands and technology providers, and an adviser to BCG. Previously, David was chief marketing officer at Aetna and has worked with dozens of companies on personalization, AI, and agile marketing at BCG and Digitas. Forbes has repeatedly named him one of the Top 20 Most Influential Voices in Marketing, and Ad Age has named him a Top 20 Chief Marketing and Technology Officer.
About Boston Consulting Group
Boston Consulting Group partners with leaders in business and society to tackle their most important challenges and capture their greatest opportunities. BCG was the pioneer in business strategy when it was founded in 1963. Today, we work closely with clients to embrace a transformational approach aimed at benefiting all stakeholders—empowering organizations to grow, build sustainable competitive advantage, and drive positive societal impact.
Our diverse, global teams bring deep industry and functional expertise and a range of perspectives that question the status quo and spark change. BCG delivers solutions through leading-edge management consulting, technology and design, and corporate and digital ventures. We work in a uniquely collaborative model across the firm and throughout all levels of the client organization, fueled by the goal of helping our clients thrive and enabling them to make the world a better place.
SOURCE Boston Consulting Group (BCG)
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