The Right Way To Achieve Hyper-Personalization And Set Your Business Apart

As more and more businesses adopt AI to create personalized experiences for customers, the biggest differentiator is no longer whether they’re doing so; it’s how well they’re doing so. Those seeing the greatest success are using technologies to take their efforts a step further: into the world of hyper-personalization.

As Deloitte puts it, “Hyper-personalization is the most advanced way brands can tailor their marketing to individual customers… Through hyper-personalization, companies can send highly contextualized communications to specific customers at the right place and time, and through the right channel.”

And as Nextiva’s 2024 State of Customer Experience report explains, “hyper-personalization, fueled by AI’s ability to analyze vast amounts of data, creates deeper customer connections and sets businesses apart.”

For this report, we wanted to find out what businesses’ top priorities are in looking to improve their personalization efforts. So we surveyed business management and senior leaders
from multiple industries. They told us their top two areas of focus involve providing customers with empathetic experiences and enjoyable interactions.

From years of working with businesses to improve customer experiences, I know that tackling these challenges requires more than just the proverbial “personal touch.” It requires bringing together all of the information about a customer’s journey into a single place, which a chatbot or human agent can look at to instantly gain key insights about the person.

In addition to having tools that help to automate this, organizations also need to break down internal silos among different teams to help ensure that all the necessary information is in a single record. “A seamless flow of information across all channels is vital for a stellar CX,” our report explains. “Without it, it’s all too easy for agents to spend too much time retreading conversational context and looking up past interactions.” This kind of thing can severely damage relationships with customers.

Even once all this information is pulled together, agents (both human and virtual) need to be ready for customers to surprise them. For example, the information in the system might indicate that the customer is likely to want a certain product or service; but if the customer signals otherwise, it’s crucial to follow their lead instantly.

Customer preferences are changing faster than ever, according to the people we surveyed. With access to so much information, and their lives being changed so quickly in other ways by technology, consumers have no needs and wishes constantly. In order to hyper-personalize their experience with a company, agents need to adapt.

Personalization can also include data beyond what customers say. For example, as writer Danny Grainger notes in a blog post for Nextiva, “Advanced AI can consider factors like browsing behavior, search history and purchase history, demographic information, relevant content, and current trends to make highly accurate predictions about what a customer might want next.”

Paradoxes and pitfalls

But as with any change, pursuing a hyper-personalization strategy takes careful planning. For all the opportunities it offers, it also comes with pitfalls. Organizations need to tap into all this potential without risking the bottom line.

For example, while collecting demographic information may be helpful in providing suggestions, it should not be used to make assumptions about the customer. This gets at something called the “labeling paradox” or “stereotype paradox.” As Niklas Westrén-Doll explained in a recent study, this is a situation “in which the benefits consumers receive from personalization might easily be overshadowed by the feeling of being put in (a) certain box.”

Organizations also need to implement safety precautions to handle all the information they have about individual customers. “Concerns about the privacy and security of users’ information are raised as a result of the collecting and analysis of vast amounts of personal data for the purpose of developing artificial intelligence systems,” Amin Karami, Milad Shemshaki, and Mustansar Ali Ghazanfar wrote in another recent study.

As I’ve explained previously, businesses need to enact numerous safeguards to ensure that customer information remains protected. One of these steps is to automatically redact sensitive information.

None of these challenges should scare companies away from personalization. As IBM reports, the benefits to personalizing sales and marketing efforts are overwhelming. Majorities of consumers want to use AI applications as they shop and that they’re frustrated when their experiences aren’t tailored to them. And McKinsey found that, “Companies that grow faster drive 40 percent more of their revenue from personalization than their slower-growing counterparts.”

Navigating a path to hyper-personalization is one of the most important steps an organization can take. Ultimately, it helps build customer experiences that are not only empathetic and enjoyable, but also exceptional.