If none of the 5,000 new Oreo flavors are exactly your speed, you can now build your own Oreos to celebrate your next special occasion. Don’t like running? Take a quick quiz to discover the perfect fitness routine for you. And if your daughter’s been dying for an American Girl doll, why not make the price worth it and design a one-of-a-kind doll that looks just like her? Hyper-personalization has been the name of the game for a while for larger, household brands.
Now, that trend is gaining momentum as more sophisticated algorithms, ready-made platforms, and less expensive technology make it possible for start-ups and boutique brands to get in on the action, too.
Fifty years ago, the entire purpose of branding was to ensure the customer could recognize your company. While having a recognizable brand will always be important, now it’s just as important to show your customers that you recognize them. That’s where hyper-personalization comes in.
What is hyper-personalization?
Hyper-personalization, also known as AI, uses AI and real-time data to improve the customer experience. Businesses use this marketing strategy to deliver curated content, customized products, tailor-made product recommendations and services. They also use it for targeted customer support through an AI chatbot. Think high-touch high tech.
The goals of this type of marketing include higher conversion rates and greater customer engagement, loyalty, and satisfaction. Consumers want hyper-personalization, and they’re willing to give up some data to get it.
In fact, in a recent survey by Salesforce, 63 percent of millennial consumers said they will trade information for more personalized ads and discounts. Also, 72 percent of all consumers said they now expect companies to anticipate their needs. Meanwhile, an Ascend2 survey of top-level marketing executives reveals that only 9 percent of marketers have completed a hyper-personalization strategy for their company.
Clearly, there’s still a gap between the expectations of the target audience and business marketing strategy — and in that gap there’s a lot of opportunity.
Personalization vs. hyper-personalization
Hyper-personalization is often described as an extreme version of personalization, but there’s more to it than that. They differ in degree, but there also are important differences between the two marketing strategies in scale, speed, and results.
Scale: segments vs. individuals
While personalized marketing tends to focus on market segments or “personas,” hyper-personalization thinks in terms of individuals. Gone are the days of generic push notifications or segmented email campaigns. Hyper-personalization gives us a way to offer unique experiences to every website visitor and tailor suggestions just for them.
Speed: Follow-ups vs. real time
Another major difference between standard individual marketing and hyper-personalization is the potential speed of delivery. In a personalized marketing campaign, marketers are generally limited to follow-up emails, text messages, and phone calls based on aggregated data.
Hyper-personalization still uses follow-up advertising tactics. (We’re all familiar with those product recommendations that follow us around social media after we’ve abandoned our cart!)
However, it is also capable of using big data, AI, and machine learning to deliver unique user experiences in the moment. This makes potential customers feel like their needs are being anticipated and their satisfaction is increased.
Results: good vs. great
Personalized marketing campaigns have been around forever, from the legendary Staff Picks at Blockbuster to restaurants offering free appetizers on your birthday. And these tried-and-true strategies do work, but they don’t go far enough. Customers, especially online customers, now expect more.
When it comes to the difference in results between the two strategies, the numbers speak for themselves. A recent study by Segment found that hyper-personalization increased impulse buys by 49 percent, increased customer loyalty by 44 percent, increased overall revenue, and reduced returns.
The limitations and frustrations of hyper-personalization
Of course, nothing as revolutionary as hyper-personalization comes without headaches and frustrations. Typically, companies that are trying to hyper-personalize face challenges in three core areas:
- Data collection, analysis and management. How will you collect customer data and who will manage and analyze that data for you? This question tends to be the biggest hurdle most businesses face when first starting this type of marketing strategy. Big companies like Amazon Netflix, and Spotify obviously have the resources to implement sophisticated hyper-personalization at scale, but what about smaller companies? Developing a plan for data collection and analysis is the first step for any hyper-personalization strategy—you can’t customize a user experience if you don’t know anything about your potential customer.
- Privacy concerns. Even though millennials and Gen Z consumers are usually more than willing to swap their data for personalized experiences, you still have a responsibility to keep that data secure and private. Fortunately, many turn-key web platforms now offer excellent data security that have built-in algorithms for hyper-personalization.
- Silos in the workplace. Implementing this type of marketing plan makes it even more imperative that company departments learn to work together, specifically the marketing, sales, IT, and customer service departments. Many CEOs find it simpler and more efficient to hire an outside marketing and data firm to manage their hyper-personalization campaigns and serve as a single point of contact for all involved departments.
How does hyper-personalization work
When most people talk about hyper-personalization, they discuss the big three: Netflix, Spotify, and Amazon. While these companies pioneered individual product recommendations and, in some cases, literally built the algorithms used to personalize recommendations, they aren’t the only companies using hyper-personalization to great effect.
Many boutique brands, start-ups, retailers, and service providers use hyper-personalization to drive sales. Let’s look at personalized vitamin packs as just one example. Companies like Persona Vitamins took a common problem, applied hyper-personalization to it, and have turned personalized nutrition and medicine into nearly a $600 billion industry.
What was the problem? Every adult knows they should be taking vitamins, but it’s such a pain. I forget to take mine half the time. How do I know what to take? Why are there so many bottles to open and close every day? Do I take this in the morning or the evening? Instead, a hyper-personalized vitamin service gives users a simple assessment and then ships easy-to-open, easy-to-remember vitamin packs on a monthly schedule.
3 factors driving consumer demand for hyper-personalization
Even with data and privacy concerns, most consumers are still willing (and eager) to engage with companies that use hyper-personalization strategies. And for good reason. Hyper-personalization saves users time, delivers more relevant results, and creates a better overall use experience.
In addition, there are three factors creating even more demand for hyper-personalization.
Time spent online is increasing
According to Statista, our online lives have been steadily increasing over the past decade. More importantly, our time on mobile devices has quintupled since 2011, far outpacing time spent on desktops or laptops. Smaller screens can be more frustrating, unless our favorite companies can deliver relevant results right at our fingertips.
Post-pandemic online shopping is still booming
It’s no surprise that, during the pandemic, companies like Amazon, GrubHub, and Disney+ saw huge surges in revenue. No one was going out because of COVID-19, and companies that could get us what we needed benefited greatly. What is perhaps a little surprising is that the boom in online shopping doesn’t show any sign of slowing down post-pandemic. Like working from home, it seems greater rates of online shopping are here to stay.
Customers are busy
Everyone is so busy these days. Or, at least we feel really busy. One of the reasons your customers feel so busy is because of choice fatigue. Ironically, hyper-personalization can help solve this problem. Delivering the right offer to the right target at just the right moment prevents them from spending hours scrolling, searching, comparison shopping, and deciding. And they’ll love you for it.
Since hyper-personalization is just one-to-one marketing, there are thousands of examples of it at work. It is so powerful precisely because of its versatility and ability to address a wide range of specific concerns.
Getting too many returns? Use it to deliver more relevant product recommendations. Losing customers to a new competitor? Personalize an experience and provide it to increase brand loyalty. Missing out on an entire market segment because of a language barrier? Try a multilingual chatbot plug-in.
Perhaps the best way to make hyper-personalization work for you is to dig down into your company’s primary pain points and figure out if there’s an automated, AI-driven solution that has the added benefit of approaching your customers like individuals.
Satisfy your customers
The increased demand for hyper-personalization reflects consumers’ interest in receiving results that are relevant to their unique interests. The content marketing platform rellify provides individual solutions to its clients by developing content that is relevant to potential customers. Contact rellify.com today to see how it can help your business extend its reach and relevance.