For years we have been trying to identify the customer, classify the customer and their needs, and build a tailored customer experience.
Advanced technologies and fast, real-time data processing are slowly freeing us from classifying customers on the basis of historical data. They allow ever-greater personalization of the service and the product to the individual customer, matched also to the moment of consumption, to geographic location at that time, and to further contextual variables. Heightened personalization – Hyper Personalization is built on analysis of historical data combined with forecasts.
This is going to get interesting… for every one of us, personally
We are all already well familiar with the way Netflix, Spotify and Wolt match content, based on viewing history, searches and preferences, on the viewer’s profile, on geography and even on the time of day.
Imagine that kind of service at the bank, at the HMO (health fund), at the clothing store, at the supermarket… it is not far off.
hyper personalization, then, is a business strategy that uses advanced technologies to deliver highly personalized experiences, products or services based on the customer’s behavior and preferences and on the context they are in.
hyper personalization uses technologies such as artificial intelligence (AI), creative intelligence, machine learning (ML) and real-time data analysis to create heightened personalized experiences for customers. It goes well beyond the basics such as addressing customers by name or recommending products based on their purchase history. hyper personalization draws on far more data, more current and more precise: browsing patterns, location, preferences, similar customers, and contextual factors such as the weather or the time of day.
hyper personalization is steadily gaining ground in sectors such as retail, entertainment, healthcare and banking, improving the user experience and raising customer engagement.
Customers like it, they even expect it.. it is taken for granted
Heightened personalization is welcomed. According to a study by the IBM Institute for Business Value, three in five consumers want to use artificial-intelligence applications while they shop. Another study, by McKinsey, found that 71% of consumers expect businesses to deliver personalized content. Of those customers, 67% say they feel let down when their interactions with businesses are not matched to their needs.
Consumers expect interactions matched to their preferences, their behaviors and their particular needs rather than generic approaches. hyper personalization answers that demand while strengthening customer-retention strategy. The benefits of personalized marketing show up in hard results: according to McKinsey, it can cut customer-acquisition costs by up to 50%, lift revenue by 5-15% and raise marketing ROI by 10-30%.
When customers feel understood and valued, they are more likely to connect with the brand, buy again and build long-term loyalty. That emotional connection is a differentiator in a competitive market. Customers favor brands that understand and prioritize their individual needs and preferences.
hyper personalization also supports innovation. Collecting data and analyzing customer behavior lets businesses understand emerging customer trends and behaviors in depth. These activities sit alongside initiatives in which businesses use technology to sharpen their strategies, develop new products and anticipate future customer needs.
How hyper personalization differs from traditional personalization
The main difference between hyper personalization and traditional personalization lies in the depth of the data used and in the degree of tailoring. Personalization as practiced to date generally uses basic customer information such as names, purchase history or demographics, in order to create generic personalized experiences.
Mentioning a customer’s name in an email, or recommending products based on earlier purchases, is traditional personalization. With the tools we had before the AI revolution this was certainly effective up to a point. The technology allowed analysis of static data, which could miss the customer’s changing needs or preferences.
hyper personalization goes beyond those tactics through advanced technologies such as artificial intelligence, machine learning and real-time data analysis. It draws on a wide range of data including behavioral patterns, browsing activity, location, device usage and even contextual factors such as timing, phone type or the weather.
That depth lets businesses create highly personalized, dynamic experiences that adapt to the customer’s evolving context. An e-commerce platform, for example, might recommend products in real time based on a customer’s recent clicks, their preferences and current trends among similar users.
Combining historical data with forecasts and external data
Traditional personalization is also reactive, based on past data. hyper personalization is proactive, using predictive analytics to offer more relevant experiences. It analyzes patterns in customer data in order to predict future behaviors or preferences. That capability lets businesses anticipate customer needs before those needs are stated explicitly. This level of sophistication makes hyper personalization effective at creating meaningful engagement, raising conversion and building customer loyalty.
Implementing hyper personalization requires a robust, integrated data infrastructure and a commitment to data privacy. Businesses must handle sensitive data and customer data responsibly, and comply with privacy-protection regulation, in order to preserve trust.
hyper personalization is not just technology – it demands serious organizational readiness – it is a revolution
The heightened-personalization process is already under way, at one stage or another, in every organization. Can it be implemented within the setups that already exist?
Traditionally, organizations are set up around definitions and classifications known in advance. We are used to tying the service channel to the handling party, and the customer classification to the SLA and the service provider. The heightened-personalization revolution forces us to create a flatter and more flexible world.
To set and enable the handling party, the SLA and the other parameters that shape the service, the product, the price and the operation for every single interaction, we need an organizational structure that is flatter, more flexible and more complex. And a move to an operating model that supports this organizational transformation.
The change is sweeping and calls for adjustments on every front:
Technology, systems integration and data management
And on the organizational fronts: strategy, workforce, skills, compensation models, regulation and legal risk, operating and management methods, KPI’s, management routines and organization – every organizational component needs to be adapted to the new world.
hyper personalization creates business value on every front
hyper personalization is a powerful instrument in the customer economy and delivers benefits across many business fronts: an improved customer experience, higher customer engagement and with it stronger retention and loyalty, consistency across channels, revenue growth, operational efficiency, proactivity in service and in sales, better marketing ROI, deeper insight into customers
When will we succeed – when the technology meets the business and the organization
The move from personalized service to Hyper Personalization creates significant challenges, but also opportunities to improve the customer experience and increase customer loyalty. Advanced technologies let businesses deliver customer experiences that are distinctive and highly personalized. For that to succeed, the business and organizational thinking has to be adjusted on every front.
A comprehensive rollout of heightened personalization – covering both the technology adjustments and the matching organizational readiness – can drive accelerated business growth.
Sources:
What is hyper-personalization IBM
How Generative AI Is Driving Hyperpersonalization – Forbes
Hyper-Personalization vs. Personalization: Hyper-Personalizing the Customer Experience -mendix
