Hyper-Personalization: The Future of Digital Marketing?

When handled effectively, hyper-personalized marketing is a win-win situation for companies and their customers. When brands engage with buyers in more meaningful ways, they build up relationships that are underpinned by trust and customer loyalty. Good examples are Amazon and Uber. These early adopters of hyper-personalization enhance customer loyalty and user experiences by suggestions steered by individual preferences.

What Is Hyper-Personalization?

Right on the cutting edge of today’s technology, trend-sensitive brands are now tailoring their marketing activities to individual customers. Known as hyper-personalization, this consists of creating customized targeted experiences that are based on data and analytics, AI, and automation.

With IT progressing at a steady clip over the past thirty years, and the upsurge in machine learning, artificial intelligence is restructuring the way people browse and buy online. Big data allows marketers to pinpoint the exact needs, behaviors, and habits of customers, ensuring that every user experience is both relevant and enjoyable.

Does Hyper-Personalization Really Work?

Underpinned by high-speed analytics, this personalization meant that marketing budget dollars were spent more effectively, cutting down on that ‘wasted’ 50% that has always been impossible to identify. Techniques such as geo-targeting and personalized messages cut back on some of these losses, as campaigns could be segmented and tracked more accurately.

However, as consumers flocked to the Internet, businesses followed, with digital marketplaces becoming overcrowded. This meant that companies needed to find more innovative approaches to potential buyers, imprinting their brands for faster recall. Recent research shows that after personalized shopping experiences:

• 40% of consumers say they would buy again from a brand;
• 90% of consumers think that personalized marketing is appealing; and
• 86% of companies report better results through hyper-personalization.

Why is Hyper-Personalization the Future of Marketing?

As databases ballooned with data provided almost unthinkingly by leads, potential buyers, and customers, personalized marketing flourished. This strategy allows companies to deliver customized content through collecting and analyzing data, underpinned by automation technology.

This was the first step away from the one-size-fits-all approach to advertising that dominated the scattershot campaigns of the XX century. With the advent of the Internet, social media, and online shopping, businesses realized they could focus on specific segments: parents, students, professionals, or even the residents of a specific neighborhood.

The next step – quite logically – is hyper-personalization. By focusing on individuals, businesses make the best possible use of all their collected data, providing potential and actual customers with goods, services, and content that are more relevant (and thus more interesting) to them.

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What are the Benefits of Hyper-Personalization?

One way of looking at hyper-personalization is that it’s simply an extension of segmentation: always a core element in any marketing campaign. But with hyper-personalization, this long-established segmentation technique is laser-focused on a segment-of-one. In addition to using all the characteristics, like gender, age, location, average spend, etc. traditionally used to target buyers, hyper-personalization dives far deeper into the data, reducing yesterday’s customer segments to tomorrow’s individual buyers.

By leveraging real-time data and artificial intelligence, businesses can respond rapidly to the unmet and even unknown needs of targeted individuals (rather than target audiences). This target fragmentation ensures that they deliver relevant messages at the right time, to the most convenient place, and through the most appropriate channels.

Tapping into millions of data points reflecting real-time behaviors, marketers can paint digital portraits of their targets, using information drawn from social profiles, mobile apps, website cookies, and connected devices. Two excellent examples of this are Netflix and Kindle: both analyze real-time data and use AI to craft customized reading and viewing recommendations for their subscribers.

What Do Consumers Think about Hyper-Personalization?

Even before the pandemic-induced upsurge in online shopping, consumers were already expecting hyper-personalized experiences. A study conducted by Epsilon formed that eight out of ten surveyed consumers wanted personalized services from retailers. Whopping 90% said they are more likely to shop online from groceries and drug stores offering personalized experiences, with 87% following suit for travel platforms, and 86% for automobile websites.

But – and there’s always a but! – there’s a price to pay for the convenience of hyper-personalization. Not in money – but rather in data. Despite these high approval rates for personalized user experiences, far fewer consumers said they were willing to provide information and ease up on their privacy. A disturbing 69% of consumers were nervous about businesses using their personal data to an extent that felt comfortable, according to a Pew Research Center report.

How to Hit that Hyper-Personalization Sweet Spot

These concerns must obviously be addressed by businesses and professionals, reassuring customers about the ways in which their data are used and stored. Here are five vital steps that must be followed, to ensure successful hyper-personalization:

• Transparency: the privacy x personalization exchange must be clearly conveyed;
• Relevance: content that isn’t relevant to its recipient shows that a company doesn’t really care;
• Feedback: post-purchase questionnaires, after-delivery emails, and satisfaction surveys provide priceless insights into customers’ minds;
• Trust: keeping customers loyal means keeping them confident that their personal data is properly safeguarded;
• Compliance: smart marketers always have a friend in the legal department who checks that every upload complies with international data privacy laws.

Takeaway: After decades of focusing on facts and figures, digital marketing departments must now get to know the buyers behind their screens. Although not part of the usual IT syllabus, ambitious marketers should be reading up on the softer sciences (like sociology, anthropology, and psychology) to keep pace with this trend.