Research shows a clear and concerning disparity. Despite 79% of business leaders claiming to deeply understand their customers, consumer behaviour tells a different story: 58% will walk away from purchases if the experience doesn’t feel relevant. 86% of Australian businesses believe they provide good or excellent customer engagement, only 54% of consumers agree. This chasm suggests a fundamental misunderstanding within businesses about what truly constitutes effective personalistion.
The root of this problem often lies in a lack of a unified internal strategy. Different departments, like marketing and customer experience, may have conflicting ideas of what personalisation means. Without a shared understanding of the full customer journey, each team tends to focus on its own segment, leading to fragmented and inconsistent experiences for the customer.
Nicholas Kontopoulos, VP of Marketing, APJ comments, “Back in 2019, Gartner made a bold prediction: 80% of marketers would abandon personalisation by the end of 2025. Their reasoning was that a lack of clear ROI and the difficulty of managing customer data would prove too challenging. At the time, most of us likely took note, then returned to our daily tasks”.
He adds, “Since then, personalisation has indeed continued to be a struggle for many businesses. While success stories like Amazon and Netflix show that it is possible to personalise at scale, they remain the exception. The majority of companies still find it hard to navigate the complexities of data, leading to a gap between what they aim to achieve and what their customers actually experience”.
The holistic journey: From silos to ecosystems
To bridge this gap, according to Kontopoulos, businesses must shift their focus from departmental silos to a holistic view of the entire customer experience ecosystem. “This includes not only internal teams but also external partners, such as logistics suppliers. A delay in delivery or a damaged product, for example, can significantly impact the customer’s perception of the brand, even if the marketing message was perfectly personalised”, he says.
“Marketing teams, as the custodians of the brand, have a crucial role to play here. They need to move beyond their traditional roles and act as orchestrators of the entire customer journey, fostering cross-functional conversations and ensuring that every department understands its role in delivering a consistent and delightful brand experience”.
Personalisation means something different to everyone within an organisation. Marketing teams and customer experience teams often have different ideas about what it entails. “This internal disconnect is a key reason for the huge gap we found in our latest “State of Customer Engagement” report. We surveyed over 7,000 people globally, including both consumers and business leaders”, says Kontopoulos.
“This creates a significant chasm between perception and reality. While global consumer sentiment is slightly more aligned with business perception (45% feel brands are doing well), the local ANZ numbers reveal a very bullish leadership team that is out of sync with its customers”.
Kontopoulos reflects, “Based on my experience as both a practitioner and a consultant, this disconnect stems from a lack of a unified personalisation strategy. Most companies don’t have a clear, shared understanding of what personalisation means, what it should look like, or what role each department—from marketing to customer service and even back-office functions—plays in delivering it. When you ask a marketer or a customer experience professional how they’re doing, they’re often ‘over-indexing’ their performance because they’re only focused on their small piece of the customer journey, not the whole thing”
Beyond NPS: measuring what matters
Relying solely on traditional metrics like Net Promoter Score (NPS) and customer satisfaction (CSAT) is not enough to measure the personalisation gap. Kontopoulos says, “Brands that excel at personalisation always start with the customer and the employees who serve them. From there, they work backward to define a strategy that includes every function involved in the customer journey.A critical part of this is establishing shared KPIs that cut across the entire organisation. For example, using a framework like Objectives and Key Results (OKRs) can create a “red thread” that connects the goals of marketing, sales, and customer success. Without this alignment, different departments will continue to measure their own small piece of the pie, which is a major contributor to the perception gap we see”.
This approach requires leadership alignment and a clear blueprint of the desired customer experience, identifying crucial ‘moments of truth where the brand can deliver an exceptional experience. This is not a technology problem; it’s a strategic and organisational one. The CTO, CMO, and CFO all need to be aligned on a shared vision of the customer journey.
The rise of individualisation: AI’s role in a fragmented world
The increasing adoption of AI presents both an opportunity and a risk. If deployed within existing departmental silos, warns Kontopoulos, AI can actually worsen the disconnect. Instead of a short-term ‘efficiency hack’, AI should be viewed as a strategic investment to drive transformational change. The goal shouldn’t be to use AI to reduce headcount, but rather to use it to make employees more effective and to unlock capacity.
The true potential of AI lies in enabling individualisation—moving beyond basic personalisation to a tailored, one-to-one experience. This is achieved through a three-pronged approach:
- Conversational AI: Deploying AI agents or copilots that can either directly interact with customers or support human agents, scaling up the ability to handle customer inquiries efficiently.
- Channel Integration: Creating a seamless experience where customers can move effortlessly between communication channels (e.g., from an app to a phone call) based on their preferences.
- Data Contextualisation: Collecting and utilising zero- and first-party data to anticipate customer needs and deliver highly relevant and personalised experiences.
By connecting data points across the organisation, businesses can create a customer data flywheel that provides a unified view of the customer. This enables them to identify high-value segments, predict customer churn, and ultimately deliver a more thoughtful and memorable experience.
The consequences of inaction
For organisations that fail to close the personalisation gap, the consequences are potentially severe. With an ever-increasing number of options and diminishing customer patience, the risk of customer churn is higher than ever. Basic personalisation is no longer a differentiator; it’s the bare minimum.
Kontopoulos advises, “ To remain relevant, businesses must close the personalisation gap. In today’s market, basic personalisation is just table stakes; the new frontier is individualisation. Individualisation goes beyond simple personalisation by using AI to predict and curate truly unique experiences. Think about a customer ordering a pizza: the AI agent already knows their preferences and can offer a tailored experience—perhaps suggesting their usual Hawaiian pizza and an upsell based on past orders. This is the power of AI: it can predict what a customer wants and then generate a tailored interaction, whether through a device’s content or a human agent’s conversation”.
The next frontier is individualisation, powered by the strategic use of AI and a commitment to cross-functional collaboration. “The technology to do this is available now, but it’s not enough on its own. The real challenge lies in breaking down the data silos that exist within organisations. This is not about the data itself, but about fostering a human-led culture of cross-functional collaboration. To achieve this, companies will need to rethink their organizational design and the skill sets required to drive change. The future of business will likely see marketing, sales, and customer service teams working together in a more integrated fashion to deliver a seamless, individualised customer experience”.
This requires businesses to re-examine their organisational design and break down the data silos that have historically prevented them from truly understanding and serving their customers. The future of customer experience is not about technology alone, but about the people, processes, and a shared vision that bring it all together.