Marketing personalization works when it helps customers decide. It backfires when it feels like being watched. McKinsey found that 71% of consumers expect tailored experiences and that personalization often lifts revenue by 10% to 15%. But Gartner found personalization gives 53% of customers a worse experience. It also found it works better when based on what customers chose to share.
Most brands win or lose in the gap between those two findings. Here is what the research says about doing it well.
Why Customers Expect Personal Treatment
Shoppers now take personalization for granted. In a 2021 study, McKinsey found that 71% of consumers expect companies to deliver personalized interactions, and 76% get frustrated when they don’t. Most also said tailored messages made them more likely to look at a brand and to buy again.
The payoff for companies is real. In the same study, fast-growing companies drew 40% more of their revenue from personalization than slower rivals. A typical lift was 10% to 15%. Results ranged from 5% to 25%, based on the business.
The tools are getting faster too. A 2025 McKinsey report said some marketers use generative AI to make personalized content up to 50 times faster than by hand. One large North American retailer earned about $150 million in a year from AI-driven targeted offers.
Where Personalization Goes Wrong
More personal does not always mean better. In a 2025 survey of nearly 1,500 buyers, Gartner found that personalization created a negative experience for 53% of customers. Those customers were 3.2 times more likely to regret a purchase and 44% less likely to buy again. Customers who received personalization were also twice as likely to feel overwhelmed.
The problem is not the idea. It is how brands use it. Gartner draws a line between two kinds.
- Active personalization. The customer tells the brand what they want, such as sizes, interests or budget. This kind was 2.3 times more likely to lead to confident decisions.
- Passive personalization. The brand guesses from browsing, location or purchase history. When guesses miss, or feel too knowing, trust drops.
Earlier research showed the same risk. A 2019 Gartner survey found that 38% of customers would stop doing business with a brand if its personalization felt creepy.
The Trust Problem Behind the Data
Personalization runs on personal data. Many people do not feel in control of theirs. A 2023 Pew Research Center survey found that 73% of Americans feel they have little or no control over what companies do with their data. Among those who had heard of AI, 70% said they had little or no trust in companies to use it responsibly.
That distrust costs sales. Cisco’s 2024 Consumer Privacy Survey found that 75% of consumers will not buy from organizations they don’t trust with their data.
How a brand handles data also shapes its reputation in search and on social media. That link between trust and visibility is covered in our look at how online reputation shapes careers and hiring.
The Rules Are Shifting
The legal and tech ground under personalization keeps moving.
- Cookies are staying, for now. Google spent years planning to remove third-party cookies from Chrome. It reversed course in 2024. In October 2025, it said it would retire most of its Privacy Sandbox tools because few companies adopted them. Users still choose their own cookie settings.
- State privacy laws are spreading. Legal trackers count about 20 states with broad consumer privacy laws in effect. More take effect in 2027. Most give people the right to see, delete or opt out of the sale of their data.
- Regulators are watching pricing. In January 2025, the Federal Trade Commission released early findings that pricing firms can use personal data, from location to mouse movements, to set individual prices. The study drew sharp debate inside the agency.
What Good Personalization Looks Like
The research points to a clear set of habits.
- Ask first. Data customers choose to share, often called zero-party data, beats guesses. Preference centers, quizzes and short surveys build it.
- Use your own data. First-party data from your site, app and sales is more exact and less risky than data bought from others.
- Help, don’t hover. Messages that help people choose, compare or finish a task do better than ones that show off what a brand knows.
- Explain the why. A short line like “because you bought X” makes a recommendation feel useful rather than creepy.
- Make opting out easy. Control builds trust, and trust keeps people buying.
- Test against a control group. Measure real lift, not just clicks.
Business Insiders has profiled a marketing professional who believes personalization is the future of business. The data supports that view, with one condition. Personalization has to feel like service. Firms that grow through trust, like the referral-driven service businesses we covered recently, show how far that can go. More on these trends is in the marketing section.
Frequently Asked Questions
Does personalization increase sales?
Usually, yes. McKinsey found a typical revenue lift of 10% to 15%. But Gartner found poor personalization can make customers 44% less likely to buy again.
What is the difference between first-party and zero-party data?
First-party data comes from how customers use your own site, app or store. Zero-party data is what customers choose to tell you directly, such as their likes.
Why do some customers find personalization creepy?
It feels creepy when a brand seems to know more than the customer told it. Personalization based on what people choose to share is much less likely to cause that feeling.
The Bottom Line
Personalization is no longer optional, but it is not a numbers game either. The brands that win use data customers give freely. They explain their picks and make each message more helpful. The ones that lose treat personal data as a way to know more than they should.
