What is hyper-personalisation and how can you use it to transform your business?
The concept of customer personalisation is well understood in business. It is the notion of designing a product or service to meet an individual’s specific requirements, typically by drawing on the insights provided by information about that person. These insights could relate to an individual’s age, gender, hobbies or location. Personalisation matters because consumers tend to engage better with brands that offer an individualised experience which, in turn, enables those brands to build and maintain customer loyalty and engagement.
While personalisation is already a powerful marketing tool, the significant increase of sales and marketing that is now conducted through digital channels aligned with technological advances – including artificial intelligence (AI), analytics and data mining – is giving rise to an even more personalised marketing approach. This approach, which is often described as “hyper-personalisation,” makes use of real-time data to connect a brand with its customers at pivotal moments before, during and beyond a customer’s purchasing decision. It does this by analysing patterns in buying activity and expenditure, tracking location data, and pre-empting customers’ decision-making.
Hyper-personalisation is not always used to directly sell or position a product. It can be used in subtler ways, such as to provide customers with useful information at a crucial moment in time. For example a travel company that shares a weather forecast with a customer who has booked a holiday to a particular destination so that they know what to pack. These interventions help to drive an emotional response from the customer that makes them more likely to buy and / or more likely to feel that they are receiving a superior service, which increases the likelihood they will return in the future.
Moving to a hybrid world
Hyper-personalisation will be increasingly relevant as we move from making purchases in either a physical or an online environment, to a hybrid environment that combines both experiences. For instance, a customer who is shopping in a store might receive exclusive offers on their smartphone for a product they have bought in the past. What’s more, they might opt to buy the product digitally within the store so that they can get it delivered directly to their home rather than have to carry it around with them.
By drawing on their knowledge of individual customers, brands will be able to deliver a level of personalised service in the future that is even higher than the service customers are used to receiving in today’s physical environment. At the same time, brands will be able to draw on their deep intimacy with individual customers to build more loyalty and advocacy, and attract a greater share of their wallet going forward.
Seize the opportunity
Hyper-personalisation offers businesses and public sector organizations vast opportunities to improve the products and services that they offer their customers and citizens thereby elevating the customer’s experience, retention and loyalty. The journey begins with a focus on the specific problem that the business or organization wants to address, or the opportunity it wants to seize. Does it want to increase its relevance to a broader customer base or build a stronger relationship with existing customers? How and in what way does it want to attract more revenue from its existing customer base – by upselling or cross-selling, for example? Is there an opportunity to position its product set in a different way, so that it gets more of a customer’s purchasing power?
Next the business needs to think about the information sources that will allow it to get closer to its customers, including its own databases and data provided by third parties. Social media platforms can also give valuable insights into the interests and preferences of individuals. Using this information, the business can develop a personalized and specific view of how an individual interacts with the organisation overall – including the different products and services that they consume. Once the business has this single view of the customer, it can deploy technological tools, including AI, analytics and data mining, to better connect with the customer in a personalised – but automated – fashion, using social media channels as well as emails and online ads.
It’s not only retailers that can benefit from hyper-personalisation. Manufacturers can use it to build deeper connections with their end customers, enabling them to bypass the distribution networks and ecommerce platforms that they typically sell their products through today to deliver a better product or service to their ultimate customers and drive increased engagement. Financial services companies, which can sometimes be constrained by operating in product-centric silos, can use it to effectively connect the dots between the different products and services that they provide to a customer, which might span a bank account, a mortgage and a credit card, for example. Using AI and third-party data, they can then find ways to further strengthen that relationship.
Future-proof strategy
Going forward, any business that sells directly or indirectly to consumers will need to factor hyper-personalisation into their strategy so they can more effectively tailor their products and services to meet their ultimate customers’ needs and increasing expectations of such offerings. Similarly, governmental organisations will operate more efficiently if they can factor hyper-personalisation into the services they provide to citizens. Greater personalisation will be both a major driver of innovation and essential protection against marketplace disruption in future. It might sound like a buzzword today, but hyper-personalisation is an increasingly powerful tool that will be fundamental to how we do business tomorrow.