Technologies such as artificial intelligence are enabling brands to transform customer experience with hyper-personalised recommendations, but numerous pitfalls lie along the road to getting to know your customers
Hyper-personalisation is an algorithmic or machine-learning based technique which can enhance customer experience by providing dynamic, real-time and tailor-made information on a client-by-client basis. Rather than lumping consumers into groups, as marketers have done traditionally, it allows brands to personalise offers to each individual customer linked to their unique taste, habits and buying behaviour.
Companies are implementing hyper-personalisation tools to gain a deeper understanding of when and what a particular customer is likely to buy through tracking their previous online activities. The technology also allows retailers to “listen” to customers on social media using artificial intelligence, image recognition and sentiment-based analysis, and then make smarter business decisions.
While some consumers are willing to share a lot of personal data to get hyper-personalised recommendations, others are hesitant due to data privacy and security issues. With a constant flow of stories in the media covering large consumer data breaches, customers increasingly want to know how secure their data will be. Some are concerned about whether humans are giving too much control to technology.
“It may appear that our preferences are shaping our future buying behaviour, but you could also argue that we are getting into a buying reinforcement loop where we are subconsciously driven towards buying more and more,” says Shweta Singh, assistant professor of information systems and management at Warwick Business School.
The key to successful hyper-qpersonalisation is doing it in a multichannel way, though this does present challenges. There is the need for a connection between a brand’s product design process and its marketing, customer experience, ecommerce sites and stores. To bring all these together, businesses have to throw various different technologies into the mix.
Those companies that can use personalisation in novel ways to strengthen the brand will win against their competitorsMark Bennigsen, services development director at Columbus UK
However, hyper-personalisation is only as good as the data you put into it. Consumers may be demanding more from their digital journey, but businesses can’t afford for them to have a bad experience as it negatively impacts on their perception of the brand. What happens if customer service isn’t aligned to customer delivery?
“Get personalisation wrong and the fallout can be catastrophic, especially in today’s realm of social media,” says Peter Ruffley, chairman at analytics software firm Zizo. “One misplaced post or lack of interaction becomes a hole in a brand’s armour. A brand’s delivery needs to be better, faster and smarter. In an age where loyalty comes at a price, it is important to keep your best customers close by delivering them the best experience, one that is personalised to their needs.”
While the ubiquity of dominant hyper-personalisation adopters such as Amazon and Netflix may make the technology seen more widespread than it is, recent research from analytics software specialists SAS showed that only 8 per cent of businesses can currently personalise to a segment of one. With enhanced customer engagement and loyalty on offer, it’s clear that companies able to leverage this innovation are likely to get ahead.
Companies are steadily getting better at personalising the customer experience. Mark Bennigsen, services development director at Columbus UK, says this goes beyond just giving recommendations for additional purchases. “Offering to sell more, while a good thing, is unlikely to achieve better customer service. Those companies that can use personalisation in novel ways to strengthen the brand will win against their competitors.”
Nike and adidas, for example, enable customers to create their own trainers. Seeing that people want to do things their own way, they are migrating from mass production and immersing customers in their brand by empowering them to design a bespoke product. Mr Bennigsen poses the question: “If a project can be customised, then why can’t service?”
Another company that has demonstrated the power of hyper-personalisation is online retailer Shop Direct, owner of the Littlewoods and Very brands. Over the last five years, it has evolved from a catalogue retailer to the UK’s largest integrated pure-play retailer, driven by its ambition to deliver the world’s most personalised shopping experience.
It now has one of the UK’s most advanced real-time recommendation engines, powered by technology from SAS, so customers get instinctive, relevant and personalised suggestions, navigation and pricing. This has enabled Shop Direct to take its business to the next level, and keep up with customer needs and expectations.
“SAS helps Shop Direct convert browsers to buyers more often by providing an industry-leading personalisation platform to encourage order completion,” says Tiffany Carpenter, head of customer intelligence at SAS UK and Ireland. “It has also introduced advanced social targeting, helping to drive traffic from people’s news feeds on to the Shop Direct site.”
With data driving how brands interact with consumers, and in an automated fashion, it’s vital that businesses establish a cross-organisation team that understands how that data is being collected and where it’s coming from. It’s also important that there is always a human eye casting over the automation across marketing platforms. Even with the sophistication of artificial intelligence, the wrong algorithms can be utilised resulting in incorrect information going out which can do great damage to the brand.