Hyper-personalization is nothing but a magical combination of three components like Artificial Intelligence (AI), Machine Learning (ML), and real-time data analytics. When put together, it creates a highly-personalized, unique experiences for individual customers.
Based on this explanation, there is no doubt that the term is fundamentally a marketing concept and customer experience (CX) strategy in which the main goal is to connect with the customers in a much deeper and meaningful level. And it is done by anticipating their needs, understand their desires, and then offer personalized experiences.
So, technically, when you come across a spot-on recommendation while watching a Netflix show or buying something on an e-commerce website, believe that the recommendation you have received is the magic of this hyper-personalization strategy.
It feels like someone knows about your behavioral patterns so perfectly.
Understandably, hyper-personalization is used by almost all businesses who interact with customers and collect data.
Major sectors using hyper-personalization strategy
- E-commerce and retail like Amazon and Shopify, to personalize their product recommendations, dynamic pricing and in-store offers.
- Meta and entertainment like Netflix and Spotify for content suggestions and customized digests
- Financial services like Banks for customized financial products and fraud alerts.
- Healthcare sectors for personalized treatment reminders and tailored health advice.
Also, market players like data-rich companies, technology adopters, and customer-centric brands use hyper-personalization strategy.
Why does hyper-personalization matter?
Hyper-personalization is quite an imperative strategy for every business who understands the value of customer engagement with their product and services, and profitable growth it eventually pans out. By implementing this strategy, they gather better understanding of customers’ journeys, their preferences, their behavioral patterns, and even their emotional state of mind at a particular moment of shopping.
Potential benefits of hyper-personalization that accentuate its importance
Enhanced customer experience
Hyper-personalization matters because of its immediate benefit of how it helps you improve your customer experience. In fact, when you personalize someone’s experience, they feel appreciated and valued. And this is one of the most important things to know about your customers – making them feel understood and valued!
My personal experience:
I don’t know if I was this example of hyper-personalization but I recollect having had a wonderful shopping experience with an e-commerce website. I purchased an item which was home-delivered to me as defected. Upon calling its customer executive, the defective item was scheduled for the next day pickup by the field agent of the e-commerce brand. However, nobody turned up at my doorstep to pick up the faulty item. Anyway, I called its customer care again, only to experience the pickup being rescheduled for the next day.
Again, nobody turned up.
Frustrated, I called again, and this continues for almost one month, until the brand finally permitted me to keep the item worth Rs. 14000, and refunded the same amount to my bank account. That was unprecedented in my shopping experience with any brand.
I don’t know what the brand was thinking at that time but I guess, it surely utilized this hyper-personalization strategy to gauge my grievance redress by its customer care department and okayed the refund against the faulty item after properly assessing the situation based on the data insights facilitated by this hyper-personalization technique.
So, in my case, the brand indeed improved my customer experience with it and earned a certain degree of trust as well.
Better engagement and conversion
With hyper-personalization being used in an effective way, it is possible to improve engagement and conversion. This involves offering relevant content and personalized calls to action hook. Here, the hyper-personalization technique works analyzing behavioral patterns of customers and offering spot-on recommendations whenever possible.
But I believe that for this technique to work well, a business has to have proper understanding of its customers and what it offers that can provide values to them. Because anything devoid of value proportion is fated to receive lukewarm responses from target customers, hence decreasing engagement and conversion becomes an ugly fallout of it.
Stronger customer loyalty
One of the most effective ways to stand ahead of the curve in competitive business world is to earn customer loyalty. And this obviously involves understanding your target customers accurately, and offering them best products and services resonating with their needs and budgetary capacity.
With hyper-personalization technique already in your business strategy, you can make your customers feel valued and appreciated by providing them with genuine services facilitated by real-time data insights by hyper-personalization. This results in reciprocal benefit of earning stronger customer loyalty in due course of time. They are not just your customers but also become great advocates of your products and services.
Optimized marketing expenses
One of the brilliant fallouts that businesses experience by applying hyper-personalization strategy is that they can build better insights into how to target the right message to the right person at the right time. The application of hyper personalization technique in this way reciprocates the business with the benefit of reducing wasted marketing efforts and achieving higher ROI.
Standout identity
This benefit of hyper personalization means that a business can make the most of this strategy to create a powerful and memorable identity in the minds of its target customers.
And this is literally beneficial for brands, given how they eye for standing out in today’s crowded marketplace where being unique pays you off handsomely in the long run. By using this strategy also means staying apart from those competitors who offer generic, one-size fit-all experiences to their customers.
So, the potential rewards or benefits of implementing the strategy of hyper-personalization are immense. This is the technique ensuring a bright future for businesses who value every customer interaction and how to reciprocate it with frictionless, delightful, and effective exchange worth their time and money.
Privacy concerns – Is hyper-personalization intrusive?
The benefits associated with hyper-personalization are great and they do sound promising in the context of placing your brand on top of the line among its competitors. However, it goes without saying that this strategy also courts some privacy concerns of the customers.
Because it is basically a technique of data collection and analysis related to digital footprints of customers they leave behind while interacting with a website. Based on this logic, it indeed sounds like spying on customers.
Hence, people become cautious about how their personal information is used, stored, and shared by the businesses using hyper-personalization technique to personalize their individual experiences.
Common privacy concerns of hyper-personalization
Lack of transparency
Most customers tend to believe that businesses are using their personal information without their explicit consent. They also believe that businesses are not being candid in how they would use customers’ data and in what way. Surely, it arises transparency issue, which eventually begets distrust and skepticism.
Data breach and security risks
Given the increasing incidents related to data breaches and security risks, customers naturally feel concerned about the vulnerability of their confidential information. No doubt, the fear of identity theft or data misuse discourages them a lot. After all, the cost of data breach is quite unimaginable as highlighted in the report.
Unwanted marketing and spam
Perhaps the most uncomfortable downside of hyper personalization is how it unleashes bots of intrusive, unwanted commercials that feel like spams. When this happens, customers get the feeling that their data is being used for marketing purposes without their consent.
Feeling monitored or manipulated
Customers naturally feel that they are being watched when they have the feeling that a company knows too much about them. And this is quite concerning. When somebody receives a spot-on recommendation, the doubt suddenly dwells in their mind that their personal information is compromised and their autonomy is challenged.
Data monetization
Customers also worry that their personal data might be sold to a third party company for monetization purpose without their permission. A likely case of their data being used for purposes they have not approved can also occur, triggering their feeling of helplessness.
Though businesses are not legally obliged to navigate these privacy concerns associated with hyper personalization, but it is expected of them to address such concerns professionally. This is because it will create trust in customers for the brand following this fundamental business etiquette. Otherwise, lack of trust and transparency can fail a business to achieve its full potential, no matter how sophisticated personalization engine it has devised.
The strategic framework of building trust with hyper personalization while reading minds
Now, the moot question is how businesses can make the most of hyper personalization without sounding intrusive to their privacy-conscious customers. The answer rests in having a cautious, strategic approach based on integrity, transparency, control and value.
Meaning, the companies must take their customers into confidence that their personal data is safe with them, and can’t be used without their explicit consent.
Be honest about your data practices
What do you think would be the reaction of customers when they come to know that their personal information has been used for commercial purposes without their consent? If that pans out anyhow, it would simply mean that a company has failed to be honest with its customers about their personal data.
How to build best data practices with the customers
Be transparent
Be absolutely clear and concise about whatever privacy policies your business has in place for customers. No jargons. Just clear, easy to understand policies outlining the type of data you collect, why you collect it, and how it is used, and any third-party (if any) with whom it is shared. Communicate your privacy policies in visuals, FAQs, and plain language.
Provide context
Do not bore customers with ocean of esoteric explanations regarding privacy policy. Better provide them a context at the point of data collection. For example, when asking for location access, better tell them something like “Enabling location access would allow us to suggest local stores nearby your location, etc.).
User-friendly dashboard
Customers would love when they see you have provided them a user-friendly dashboard showcasing their data, update permissions, and opt-in/out of specific personalization features. Such explanatory dashboard would empower customers to see what data you hold about them and manage their preferences.
Let the customers own their data privacy
Trust builds when customers feel that their personal information is safe and they have a say in how their data is used. Best for the company is to allow its customers to selectively opt-in or opt-out of varying types of data collection and personalization.
Let them decide what to accept and what to decline without mandating any term. For example, if they are okay with personalized recommendations, respect their selection of opting-out location tracking.
Easy data deletion
It would be a great support to the customers when they are allowed to have their personal data deleted on request. A company should have such a mechanism in place that respects its customers’ right to be forgotten.
Dedicated preference centers
When a company has a dedicated preference centers where its customers can willingly specify their interests, communication preferences, and the level personalization they want, it blooms trust. Also, it allows customers to shape their experience actively.
Give a clear, tangible benefits to customers
Customers after all are human beings. So, when they perceive a clear, tangible benefit in return of sharing their data with a company, they are more likely to do so. For this to happen realistically, a company has to be quite outspoken and transparent in its intention. It should let the customers know specific benefits that they will have after sharing their data.
Things to do:
- Do not pitch personalization as something intrusive. Frame it as a service to enhance customers experience, save their time.
- Do not give irrelevant recommendations. A genuine recommendation cements trusts among customers.
- Any personalized discount, offer, early access to products or exclusive content should align with their preferences. You can’t impose personalization against the willingness of your customers.
- Hyper personalization would work magically in your favor if you can proactively serve your customers. For this, use your data insights to predict future needs and offer solutions before your customers even realize they need them. For example, if a streaming app observed that its user frequently searched for a movie not in its database, it can proactively notify the user of the movie once available.
Uncompromisable data safety
If a company fails to ensure data security of its customers, all the efforts to build trust mean nothing. It is imperative for the company to protect users’ data at any cost.
Things to do:
- Have in place state of the art data encryption, access controls, and regular security audits.
- Make security a non-negotiable part of your infrastructure.
- Have a clear and practiced plan for how to act in the event of a data breach.
- Hire employees extremely talented and skilled in data privacy best practices and security protocols.
Conclusion
The contribution of hyper personalization for companies to building trust with their customers and business success is immense. But it doesn’t mean to rule out respecting customers’ privacy. It is an absolute obligation of any commercial entity to address it transparently and honestly. Otherwise, customers tend to distance themselves from such organizations by sensing their intrusive conduct.
Moreover, businesses have to ensure that they deliver undeniable values to customers in return of their data, apart from prioritizing robust security and upholding ethical data practices.
The goal of maintaining responsible hyper personalization is to earn the right to read your customers’ mind. It is about creating experiences so intuitive and relatable that customers want you to know them better. They start to trust you to respect their information and improve their lives.
If you successfully build that kind of unbreakable trust with your customers, that’s where you exert the true power of hyper personalization.
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About the author:
Pawan Kumar Jha has 15 years of experience in creative content writing. He specializes writing articles and blogs that extensively talk about on trendy subjects like AI, ML, SaaS, and digital marketing landscapes. Contact him at rmc@readmycontent.com for content writing services to drive traffic growth and build strong authority of your business.