- Data is helping established brands rise above competition from outside of their industries, including companies like Amazon, Uber or Airbnb, according to a new report from the IBM Institute for Business Value made available to Marketing Dive.
- "Incumbents Strike Back," which surveyed more than 12,800 executives worldwide, found that 26% think these competitors will be significant disruptors for them, compared to 54% in 2015. Incumbent companies own 80% of the world's data, which is giving them a major advantage over less-established companies.
- Many companies are using this data to power customer-experience strategies. About two-thirds of CxOs reported organizations should prioritize customer experience over products. Artificial intelligence (AI) is one area where 43% of incumbent companies are investing to meet their goals, compared to 25% of other companies.
While it's important for marketers not to underestimate the competitive threats posed by startups and burgeoning technology giants like Uber and Amazon, legacy brands are more often recognizing that the wealth of data they have access to might help them identify customers' unmet needs and deliver more personalized experiences. Eighty-six percent of executives surveyed said they were at least "somewhat effective" at creating experiences tailored to individual customers, and 53% say they're "quite effective," IBM found.
Personalization could drive an $800 billion revenue shift in sectors including retail, healthcare and financial services for the 15% of companies that get it right, according to the report. A big piece of this will be centered on AI, which marketers continue to invest in to wrest more control over their data and to better manage it. Forrester predicts that 20% of firms will use AI in 2018 to help them make smarter business decisions and to automate communications for customer service and sales. More than half of the companies surveyed by IBM said they planned to use AI in the next two to three years to learn more about consumer motivations and behaviors and to uncover unique patterns that they can use to deepen their connections.
True one-to-one personalization is something that many brands have been working to achieve, as consumers increasingly expect higher-quality and relevant marketing content. While certain levels of personalization are essential in connecting with customers, marketers also take things too far. Seventy-five percent of consumers find many forms of marketing personalization to be creepy, and many brands acknowledge that they're tactics are creepy as well, according to recent research by InMoment.