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The Case for Hyper-Personalization: 7 of the Top Benefits of a Highly Personalized UX

Personalization has played a role in sales and marketing for some time. But recently, brands have started taking the process of recognizing the individual to a whole new level.

Thus the term “hyper-personalization” has taken root. But it’s much more than just a buzzword and plays a key role in attracting and retaining customers.

This is evident by the fact that 86 per cent of consumers report that personalization affects their purchase decision, with 25 per cent saying that the influence is significant.

Let’s now take an in-depth look at hyper-personalization and discuss some of the top benefits of delivering a highly personalized UX.

1. Increased engagement

Let’s compare two theoretical apps for a moment.

App number one takes great effort to personalize the user experience as much as possible. It breaks users down into smaller user based and action based segments so that the content, products and promotions are specifically tailored to each individual person.

App number two doesn’t make any effort to provide a personalized experience. Each user is shown the exact same thing, and the content, products and promotions are simply designed for the masses. Regardless of a person’s browsing behavior, spending patterns and demographics, the experience is the same across the board.

Which app do you think is likely to have more engagement?

You can bet that app one will have far more engagement. By customizing the experience for each individual from the moment they open the app to the time they leave, users can’t help but want to engage with it.

So of course, this will translate into a longer average amount of time spent on the app.

2. Offer the perfect deals and promotions

Discounts can be a deciding factor in whether or not a person makes a purchase. In fact, 57 per cent of consumers say that they wouldn’t have made a purchase without a coupon first.

On top of that, 91 per cent of customers who use coupons say they’ll visit a business again after being offered a coupon.

But consumers don’t just want any deal. They want one that’s relevant to them and one they can actually use. This is where hyper-personalization comes in.

It allows you to adjust your promotions so that shoppers are given discounts on the specific products they’re interested in. Here’s an example of this in action:

Say that you have an E-commerce store that sells outdoor gear such as tents, sleeping bags, hiking shoes, etc. During a person’s last visit, they spent a considerable amount of time browsing through the sleeping bags section. Upon their next visit, you could present them with a coupon for 15 per cent off on all sleeping bags.

By fine-tuning their experience to meet their interests and needs, you greatly increase the likelihood of that person making a purchase.

This leads us to our next point.

3. Improved conversion rates

What do you get when you combine increased engagement with fully optimized deals and promotions?

Higher Conversions.

There’s an undeniable correlation between engagement and conversions. And this makes sense. Spending more time on your app indicates interest where users are taking the time to really get to know your brand and fully explore your products.

Adding individualized promotions is like adding fuel to the fire because it capitalizes on an already expressed interest in allowing you to strike while the iron is hot.

Through hyper-personalization, you’re increasing engagement and the average time spent on your app, which in turn should lead to a higher conversion rate.

In fact, women’s fashion retailer JD Williams was able to increase its conversions by a whopping 18 per cent in just two weeks through mobile personalization initiatives. This just goes to show the impact it can have when executed correctly.

4. Higher average order value

One particular aspect of hyper-personalization is that many brands find product recommendations to be useful. This is where data from browsing history and prior purchases are used to show visitors suggested products, they’re likely to be interested in. These typically appear on the homepage or near the shopping cart right before shoppers are about to check out.

Research has shown that incorporating this feature can have a huge payoff and results in a higher average order value (AOV). According to Salesforce, “Purchases, where a recommendation was clicked, saw a 10 per cent higher AOV, and the per-visit spend of a shopper who clicks a recommendation is five times higher.”

Just think of the long-term implications if you could increase your AOV by 10 per cent. Annual revenue would go through the roof!

And getting this increase relies upon a very simple premise. You’re just using data to provide visitors with relevant recommendations based on their interests and behavior. This way they’re getting more value, and you’re able to maximize your AOV- a win win situation for both the sides.

5. Deeper customer satisfaction

Now consider hyper-personalization from your customer’s perspective for a second. Who wouldn’t want a highly personalized UX which:

  • Helps customers navigate their way through your app with greater ease
  • Saves them from the onerous task of having to search through a high volume of content, products and promotions to find what they truly need
  • Minimizes the chance of being overwhelmed by choice-overload
  • Gives them quick access to targeted promotions
  • Creates a more fluid and seamless experience
  • Makes their lives easier and more convenient

So it makes sense that hyper-personalization is often the catalyst for deeper customer satisfaction. And this has arguably never been more important. Just think about it.

Today’s customers have more options than ever. Often there are countless brands competing for their business within a given niche. Because they’re not stuck with one company who has a monopoly, most have limited patience for brands that don’t deliver a positive experience and give them what they’re looking for.

With customer expectations growing, it has become essential to keep your customers satisfied. And hyper-personalization is certainly a powerful tool for accomplishing this.

6. Increased customer lifetime value

Customer acquisition is obviously important. But customer retention is even more.

Nearly every business craves for repeat customers because these individuals are far more likely to convert. Not to mention customer loyalty plays a huge role in a company’s brand equity as well as its longevity.

Therefore, the customer lifetime value (CLV)—the total net profit you make from a customer over time—is a critical metric and one you’ll want to pay close attention to.

And it just so happens that hyper-personalization plays an integral role in increasing the CLV.

When you combine some of the aforementioned benefits—mainly increased engagement, optimized deals and promotions and deeper customer satisfaction, it means one thing. A larger percentage of your customers are likely to return and buy again.

And in many cases, they’ll keep buying and buying.

Research has even found that getting a customer to come back means there’s a 60 – 70 per cent chance they’ll buy again. Furthermore, repeat customers are nine times more likely to convert than someone who is a first-time shopper.

So in this regard, hyper-personalization can have a tremendous impact on the CLV.

7. Competitive advantage

Offering extreme personalization and engaging an audience of one gives you a massive advantage over others who offer only minimal personalization or none at all.

The verdict is in, and it’s clear that this is a huge factor for consumers when deciding who to engage with and ultimately do business with. If a brand seamlessly caters to their interests and needs, it only makes sense that consumers will find that brand appealing.

On the other hand, missing the mark in terms of personalization can significantly dampen the customer experience to the point that they’re likely to take their business elsewhere. After all, it can be incredibly frustrating for consumers when a company isn’t willing to make any efforts to understand them.

At the end of the day, the majority of people yearn for a personalized experience that’s designed specifically for them. And the brand that can offer this is the one that will usually get their business.

Fortunately, there are plenty of opportunities. Due to the fact that hyper-personalization is such a new phenomenon, very few companies are fully taking advantage of it.

The Boston Consulting Group even says that as of 2017 only about 15 per cent of companies could be considered “true personalization leaders” and most are tech companies.

By focusing your efforts on hyper-personalization and making it a top priority, you could theoretically outperform 85 per cent of your competitors.

The time is now

We’ve gone from basic techniques like large group user segmentation and including a person’s name in an email subject line to far more advanced tactics like extreme personalization in a fairly short period of time. As technology becomes increasingly sophisticated and brands have access to larger bodies of data, there will be even more possibilities.

So hyper-personalization is definitely something you’ll want to take advantage of moving forward. Regardless of your industry or niche, using it can help you reap some immense benefits like the ones mentioned here.

What are some types of personalization you currently offer your customers? Please let us know:

 

Image Credits

Featured image: cuncon / Pixabay

In-post image 1: Negative Space / Pexels

In-post image 2: bruce mars / Pexels

 

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