Everybody is talking about personalization these days. When done right, personalization is the key to differentiating businesses between the leaders and laggards. Personalization builds empathy, trust, and loyalty that together help to establish a high-impact business.
Personalization works because it humanizes a brand. The objective of personalization is to let customers know that:
- The business knows and understands its customers
- The customer is the business’ priority
The simplest example of personalization is an email. According to eMarketer, emails with personalized subject lines witness a 26% rise in open rates.
Personalized subject-line example: “Juan, your wishlist is waiting for you.”
Another exemplary example is the way Netflix embraces personalization. The “Top Picks for [Name]” and “Because you Watched [Video Title]”, are powerful ways to personalize videos for each user.
Other brands like Nike, Spotify, and Starbucks are also nailing personalization and have built a substantial fan base as a result.
To begin, a brand needs to emphasize data collection and analytics to understand its target audience’s needs, preferences, and expectations.
This write-up will provide a detailed understanding of personalization.
What is Personalization?
Personalization is a process that enables businesses to tailor customer journeys and experiences to the needs and preferences of each specific customer. For example, a brand may have both an app and a website. Customer experience needs to be emphasized for both. That is, the customer’s needs must be known and accounted for regardless of how they are interacting with the brand.
Personalization is not a trend, it’s a marketing tsunami. — Avi Dan
Personalization places the customer at the center while the brand rotates around it. As the business continuously revolves around the customer, it scales upon personalization. This practice helps 93% of B2B leaders increase their company’s revenue.
Learn more about the importance of personalization in 2021
Personalization vs Customization
Customization and personalization both aim to tailor content to the likes of the customer who is using the product.
The difference between the two lies in the approach followed to tailor the content.:
Personalization is tailored from the product provider’s end. Business minds implement data analytics, make data-driven assumptions, and automatically display relevant results to the customers. The better the personalization, the better the customer experience.
In personalization, the brand sits in the driving seat and makes calculated decisions in favor of the user.
Personalization Example: When a user is greeted by their first name on Netflix and are suggested shows and movies based on their watch history.
Customization, on the other hand, is usually done by the customers themselves. A customer chooses among options to tailor their user experience to suit their needs.
In customization, the user sits in the driving seat and makes decisions for themselves.
Customization Example: Netflix allows users to change their profile settings, such as profile picture, profile setting for different users, and even maturity settings to restrict particular content.
Here’s another simple example that helps differentiate between customization and personalization:
Types of Personalization
There are mainly three types of personalization, which include:
1. Explicit Personalization
This is the type of personalization based on the information received from users.
This information is one true source of information and is not built on assumptions.
- Form fills
- Browsing history
- Purchase history
This is the type of personalization based on the behavioral patterns of the users.
The information is derived from analyzing product usage patterns, which further helps with predictive analysis.
- Recommended products based on previous purchases
This is the type of personalization based on pre-known data about the customer.
This pre-known data helps in displaying relevant results, which, in turn, increases the chances of users taking the desired action.
- Location data
- Device data
Importance of Personalization
Research by Forrester reveals that personalization is “crucial for marketers seeking to enhance customer centricity and engagement.” Thus, delivering user experience personalization has become a key approach for CMOs to attract and convert potential customers.
When a brand personalizes its website or app, they aim to provide the users with what they are looking for without having to ask for it. This reduces the effort and time the customer spends finding what they want, thus enhancing their customer experience and satisfaction with the technology.
Personalization positively contributes to the “aha” moments the customers experience.
When done right, personalization is a lucrative strategy for a business.
- 75% of business leaders say personalization is integral for digital experiences
- 52% of consumers agree that, as personalized digital experiences with brands become more personalized, their satisfaction improves.
- 60% of consumers say they will become repeat buyers after a personalized shopping experience
Personalization Use Cases
When a business integrates personalization with existing technological abilities, its revenues double up.
Here are some personalization use cases to prove how it is helping brands make a big difference:
1. How AI and ML Help Deliver Personalization
There is a need for content to learn and adapt because 74% of online consumers get frustrated with websites when they are shown irrelevant content.
Dynamic Personalization enables content to learn and adapt.
When a brand incorporates data analysis for personalizing the user experience, the offerings are based on the user’s characteristics, behaviors, and attributes.
Dynamic personalization makes use of machine learning (ML) to create a projection of their potential customers, their needs, and buying habits based on data like demographics, geolocation, behavior, and device.
Machine learning is an important part of dynamic personalization because it relies on a combination of algorithms, filters, and analytics to “predict” a user’s typical behavior with a brand.
The following algorithms are utilized:
- Basic algorithms: does not rely on customer’s personal data
- Advanced algorithms: rely on customer’s personal data
Once the information is received, dynamic personalization can help tailor the customer journeys.
For instance, Google keeps track of information regarding a user’s upcoming time commitments (e.g., travel reservations, appointments, interviews, etc.) and notifies them beforehand.
How Digital Experience Platforms (DXPs) help to Deliver Personalization
Digital Experience Platforms (DXPs) provide end-to-end touchpoint optimization and a personalized user experience across all customer interactions. A powerful DXP combines customer data, analytics, and marketing automation to nurture potential customers and improve the experience throughout their journey by providing them with real-time, personalized content across all channels.
2. John Lewis Enhancing the Online Shopping Experience with AEM
John Lewis, established over 150 years ago, is one of the UK’s flagship retail brands. In recent years, they wanted to enhance the online shopping experience of their customers. Shane Chapman, Digital Asset Manager for John Lewis, noted that customers who shop both in-store and online are more loyal to the brand and accrue higher lifetime value.
Thus, he had the vision to optimize the shopping experience across channels by providing relevant digital content, including relevant product visualizations, and incorporating immersive media such as video.
John Lewis used AEM Assets to deliver Personalized User Experience
John Lewis used Adobe Experience Manager (AEM) assets capability that supports dynamic and personalized media. This enables website visitors to click on any product image and dynamically change colors, upholstery, and other factors to see what suits them.
AEM assets capability for video also allows site visitors to engage themselves in videos to learn about everything from decorating to beauty advice, thus helping them with their product selections.
With AEM added to its business model, John Lewis could deliver a seamless eCommerce customer experience.
Potential customers were able to view how their purchases would look. This helped John Lewis to create the most powerful brand marketing message: Trust. Trust resulted from delivering a seamless eCommerce customer experience and this positive experience led to an increase in conversion rates.
Personalization Best Practices
According to Twilio’s Segment State of Personalization 2021 report, 85% of the businesses believe they are offering personalized experiences, but only 60% of consumers seem to think that’s the case.
Brands are actively investing in personalization, but their efforts seem to fall short as they are unable to meet customer expectations. This makes it essential to invest in personalization in the right way to make efforts count.
Here are some of the best personalization practices to consider:
1. Gather User Data (The Responsible Way)
The first step forward towards personalization is to focus on first-party data that comes directly from the users. These are four tactics of collecting this first-party data according to Gartner:
- Collect data at sign-up
- Gather explicit data (i.e., data gathered directly from users) post sign-up
- Personalize based on implicit data (i.e., user’s behavioral patterns)
- Make use of email to target users through email marketing
The ethical way to collect the first-party data is to ask for the user’s consent before moving forward. According to Twilio’s Segment State of Personalization report:
69% of consumers say they are fine with personalization, so long as it’s data they’ve shared with a business directly.
2. Implement Personalization
Once a users’ information is gathered and analyzed, move ahead with implementing explicit, implicit, and contextual personalization.
For instance, Spotify has a huge collection of music that a user can choose from and listen to. They use Big Data, AI, and ML in an amazing way to deliver a Personalized User Experience.
- Spotify is a data-driven organization. It logs over 100 billion data points per day through its platform based on its 365 million active users worldwide.
- Once they acquire the data points, they use that information to train the algorithms and machines to listen to music and extrapolate insights that impact their business and the experience of listeners.
Here’s a living example — Spotify used big data, AI, and ML effectively to provide deeply personalized features like the Discover Weekly playlist that reached 40 million people in its first year.
The Discover Weekly playlist from Spotify enabled users to get a personalized playlist every week of music that they had not listened to before on the service, but were expected to enjoy based on their listening habits.
3. Enable Geolocation
Identifying the location of a user is one of the most important factors in personalization. Geolocation targeting is a good approach to offer more targeted personalized content to the channel’s visitors.
Marie Curie, a charitable organization, launched one of its biggest campaigns called The Great Daffodil Appeal, which aimed to motivate people to collect money for the charity on the high street. The campaign used the geolocation data of each supporter and matched it with the database of collection sites. Using this, they pulled a personalized map detailing each individual supporter’s nearest collection into the email in real-time.
The campaign resulted in an improvement in registrations each year, with a high skew towards online sign-ups.
4. Use Push Notifications
Push notifications can be considered annoying by users, but it is an excellent way to engage with them when they are not actively using the app or website. They can be an effective way to keep the brand’s name fresh in users’ minds and update them about new additions to the website or app.
eXtra, Saudi Arabia’s leading consumer electronics retailer, used retargeting emails in the past to re-engage with mobile users. However, when they switched to a push notification campaign, they witnessed a dramatic improvement in sales, experiencing a 100% year-on-year mobile growth.
5. Start Where the User Left Off
This is a feature used by Netflix. If a user is unable to watch a program or a movie through to the end, then the app will save the point when the user exited and play the content from the same point when the user logs back in.
Other strategies used by some eCommerce website apps are showing the user what they browsed through on a previous visit. Some brands take this strategy even further by sending notifications regarding any products that were added and left in the cart.
This makes things easier for the users because they don’t have to keep track of their journey on every website or app. It’s all being taken care of for them.
Success in today’s dynamic digital era requires organizations to plan, structure, and align their strategies around customers.
This write-up covers personalization in detail and how it has come to dominate every organization’s growth strategy. When starting from ground up, it is essential to involve a user experience consultant from early on to rank high on personalization.
If done right, personalization will help build trust, authority, fanbase, leads, and subsequent conversions.
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