One of the most overused buzzwords these days is „hyperpersonalization“. But, apart from the hyperbole around it – pun definitely intended – there are a lot of questions around this term, starting from, what is it? What is the purpose? Does it work at all? Does it have one or is it just a fad? After all, we know personalization since the early 80s, just that we called it 1:1 marketing then. Of course, we didn’t have the technology then to scale it, which is definitely something that we do have now.
On the other hand, improving technology is faced by an increased desire for privacy, which is at odds with what hyperpersonalization, personalization in general, stands for.
This blog post is based upon a CXChangersTalk that I had with CRM industry analyst Marshall Lager, who observes and shapes the industry since 2004 in various dependent and independent roles, most notably atCRM Magazine, G2 and Informa.
In his words, hyperpersonalization “doesn’t go away and evolves constantly.”
And, of course, it doesn’t always work!
Marshall explains that one of the main reasons for this is that not every business has the right idea of what personalization, let alone hyperpersonalization, is. He continues that “To some, putting somebody’s personal name in an e-mail or in an ad on Facebook is hyperpersonalization because it’s going right to you. It’s your name. Hey Thomas, look at this. Your name is on a t-shirt that I am holding up on this ad.
That’s not hyper personalization, that’s mass marketing, that just happens to have your name on it.”
But then, how does it work? Or rather: What is hyperpersonalization at all? The general consensus is that personalization becomes hyperpersonalization when behavioral, real-time data in conjunction with artificial intelligence are used on top of the more static and demographic information.
Or, more succinctly in Marshall’s words, it is “fine-tuning search results and product offerings and deals to the preferences that a customer has already specified. Or that you have swept from their digital fingerprints, as they call them, around their activities, on the web: their search results, their buying history.” It is about the continuous observation of customer interactions and the fine-tuning of interactions, using their current context, based upon these observations.
To make this work, it needs a good process and technology foundation, notably a good CRM system that bases on or delivers – and here is another buzzword – a customer data platform and appropriate engagement engines.
Once this platform is in place it is about getting the customer’s trust. Trust, that customers are not continuously tracked, their data is not just arbitrarily collected and, even worse, given to third parties; instead, they need to be sure that their privacy concerns are considered and respected.
Companies “have to behave in a way that makes customers willing to share their information” with them.
There is an increasing desire for privacy and data sovereignty, at least in the older generations and there are more and more regulations that help enforcing customer privacy to some degree. In addition, the browser manufacturers are increasingly blocking third party cookies.
The cookie monster will be gone soon, and businesses will need to change the way they engage with customers. But how, as trust doesn’t just happen by accident? At best, trust is a credit given and it can be withdrawn quickly.
One surefire way to make customers not trust you is giving away the data that they shared with you.
The way trust works is incremental and by giving as much as asking. Marshall recommends to initially only ask for simple, basic information that people are willing to share, while in parallel offering value to them. Over time, based on the results of the previous interactions, and still in exchange for something else, that is of value for the customer, businesses can ask for more information. What people are willing to share easily, is something that Forrester Research evaluated in an admittedly no more brand-new study.
Figure 1: What customers are comfortable sharing; source Forrester Research
Still, this all needs to be in the context and with the consent of the customer. What brands usually offer is targeted messaging on customer preferred communication channels and deals, plus convenience, although they still need to get their priorities straight, as another Forrester Research Study shows.
Figure 2: The value gap, what customers want; source Forrester Research
As Marshall maintains, it is important to make it easy for customers to interact with you and then to share data instead of making them chase you to do business with you. Know who your customers are, regardless of what channel they are using, and be sure that there is the relevant information at hand to help them solve their need, be it via self-service on the web, an app, a company representative, or any other communications channel. This requires two things: First, all data and information need to be brought to the relevant applications that are used by customers and company representatives, and second that whoever the customer talks to, not only has the information at hand but is also empowered to take decisions and act to help the customer.
Not all customer interactions have a direct financial result for the company. Initially, it is more about learning and identifying the interests and to make it easy to conversate the way they want to. Companies need to learn to not push too hard for the sale. In Marshall’s words, the relationship needs to “mature like wine instead of age like milk. The more you poke at your customers the more it sours. Continue the relationship, but don’t overload it.” Or in other words, the business needs to earn the right to sell to the customer.
Kai Stübane of SAP recently laid out how an approach that bases on value exchange can work in a practical example with one of his customers.
So, what does hyperpersonalization boil down to?
Hyperpersonalization is the ability to meaningfully engage with customers on an individual level. It is not new as a concept but the continuation what we knew as 1:1 marketing back in the day. It is enabled by contemporary technology to appropriately use not only static but also dynamic data and the customer context. From a technological point of view this means having the ability to ingest, connect, analyze and activate a lot of data from various sources in real time.
This also means that hyperpersonalization is not only relevant for marketing!
Hyperpersonalization is highly dependent on accurate data, so a big lake of purchased, grabbed, or just old data is likely not helpful. The most accurate data is what the customer willingly gives and what is in-moment.
The core foundation for it to work is gaining and nurturing the customers’ trust.
Businesses can do this best by offering value whenever they ask for something and they must not ask for too much too fast but build their customer profiles gradually and based upon recent interactions.
And make no mistake: What the customer values is different from what the business values. To identify what customers value it requires the maintenance of a strong outside-in view.