We have a love-hate relationship with working out. We know we have to exercise to stay healthy and fit, but it’s also tough to get moving when we’ve just woken up or come home from work.
To get its members moving, Orangetheory Fitness produced a hyper-personalized video that documented each member’s progress over the previous year.
The video highlighted key metrics, including the number of classes and challenges completed, as well as the calories burned.
The result?
(Source: Idomoo)
Orangetheory Fitness helped members achieve their fitness goals, but hyper-personalization helped Orangetheory achieve its business goals!
If your business is stuck in a rut, hyper-personalization might be the strategy you need to take it to the next level.
The Problem With Personalized Content
Personalized content enables businesses to tailor their content to the specific preferences of their customers.
For Orangetheory, personalized content means emailing members who prefer weight-lifting with newsletters about strength training, muscle building, and bodybuilding programs.
In contrast, the cardio community would receive newsletters about improving running times, steady-state workouts, and zone training.
The traditional personalization strategy is an effective way of establishing relationships with customers.
However, its one-size-fits-all approach is flawed. Not everyone has the same goals or intentions.
“I don’t care about building biceps like Arnold Schwarzenegger. I want to get a 500-pound Deadlift!”
An endurance athlete might prefer advice on triathlon preparation to learning the benefits of barefoot running.
The community is served… but not everyone is happy. If kept unhappy for an extended period, disgruntled customers may switch to your competition.
What’s the solution?
Hyper-personalized content.
What Is Hyper-Personalization?
To personalize content, marketers evaluate website analytics, email surveys, review social media engagement, and study the competition.
Marketers can consult with psychologists, sociologists, and other experts to gain a deeper understanding of the consumer decision-making process.
The data is used to group the audience into segments and create specific buyer profiles based on demographics, purchase history, and other qualities to personalize strategies.
Hyper-personalization takes the next step forward by leveraging Machine Learning and Artificial Intelligence technologies to dig deeper into data analytics.
ML and AI technology can extract information from multiple touchpoints, such as location, social media interactions, and browsing behavior, to build a more accurate buyer profile tailored to a customer’s individual needs and preferences.
The keyword is “individual.”
Hyper-personalization isn’t a one-size-fits-all approach.
It’s a precise and focused approach that develops strategies to guide consumers through their journey to becoming paying customers.
The comprehensive data sets collected by AI give hyper-personalization another big advantage over personalized marketing:
The ability to anticipate or predict changes in customer preferences.
Marketers can analyze behavior, purchasing trends, and online shopping preferences. Marketers can anticipate changes in customer demand and adjust content topics, chatbot responses, and personalize offers accordingly.
How Can Hyper-Personalization Boost Your Business?
If you’re pleased with the results of your personalized marketing strategy, you’ll be even more thrilled by the outcomes of hyper-personalization.
Here are six ways hyper-personalization can give your business a boost.
1. Cultivate Meaningful Customer Relationships
We can sum up what customer service means today in three words:
Excellent customer relationships.
Providing answers is a task, but it doesn’t define the job of customer service. With social media adding the “social” aspect to business, customers expect establishments to be empathetic to their needs or concerns.
From the customer’s viewpoint:
“I could’ve chosen another brand, but I chose yours. Prove to me that I made the right choice.”
From the business’s viewpoint, the sale shouldn’t end after the transaction has been closed. On the contrary, the end of the transaction should be the starting point of the sale.
The difference is you’re not selling a product, you’re selling a brand.
When you create and deliver content that’s hyper-personalized to a specific customer’s preferences, you’re taking a proactive approach to engaging the customer.
For example, Johnny bought a set of resistance bands from your online store. Based on data compiled by AI, you find out that Johnny has been browsing content about home workouts, calisthenics, and improving mobility.
The next day, Johnny checks his inbox and sees an email from you with the subject line: “Maximize the benefits of your resistance bands.”
When Johnny clicks your email, he sees a newsletter.
“Hi Johnny!
“Thank you for purchasing a set of resistance bands yesterday!
“We figured you’d appreciate this article we wrote, ‘5 Ways to Maximize the Benefits of Your Resistance Bands.’”
“Please reach out if you have questions or concerns.
“Thank you, and enjoy your workouts!”
Johnny will be surprised, impressed, and flattered by your effort to connect with him on a personal level.
He won’t view your business merely as a for-profit company, but a company that cares.
2. Increase Sales Conversion Rates
According to AI, Johnny’s been reading up on pull-ups. He’s interested in adding muscle to his back and wants to be as fit as the Marines.
If you send him a discount offer for the latest version of a doorway pull-up bar, he might take you up on it and make a purchase.
No questions asked!
There’s little guesswork with hyper-personalization. You have a good idea of what the customer’s next purchase will be.
However, the discount offer might not be necessary.
You’ve made a good impression on Johnny. If Johnny gets the itch to buy a fitness product, your company will be top of mind.
There’s a good chance Johnny will make another purchase or recommend your store to his friends. We won’t be surprised if Johnny shared his experience with his social media community.
If Johnny has 1,000 friends and 25% of them are fitness enthusiasts, some of them will likely visit your website.
Assuming 20% of the 250 fitness enthusiasts or 50 visit your website, if 10% complete their journey through the sales funnel, you’ll have five new customers!
3. Enhance Brand Reputation
Products like resistance bands have a specific function and are difficult to differentiate. If customers are impressed with your after-sales service, they’ll continue to patronize your brand even if it’s comparatively expensive.
Paying extra for premium service or customer care is a justifiable expense. Consumers are discerning not just when it comes to product quality, but also service quality.
Look at Starbucks.
Since 2014, Starbucks has continued to increase its prices, but the coffee chain still generates billions of dollars of revenue annually.
How?
Starbucks has been leveraging predictive and generative AI technologies to develop highly personalized marketing strategies.
Starbucks’ AI program, “Deep Brew,” has been instrumental in helping Starbucks introduce customer-focused innovations like customizable menu boards and addressing persistent issues such as inventory shortfalls and out-of-order espresso machines.
There are coffee chains that serve good-quality but cheaper coffee. Yet, Starbucks remains the coffee of choice of many java aficionados.
Of course, the baristas are trained to be observant of customers.
If you’re a regular customer, a barista might greet you with:
“Hi Steve,
How are you this morning? Shall we go with the usual, tall, hot, black Americano with no sugar, one Splenda, and non-fat milk? Or can I interest you in a black Cold Brew? It has a slightly more bitter flavor but cleaner taste than an Americano.”
The barista has an idea of Steve’s preferred flavor profile and suggested a new product to try.
Whether Steve goes for the suggestion or not, the barista has made a favorable impression.
Maybe Steve will try the Cold Brew the following morning!
4. Improve Customer Retention
Businesses make the mistake of putting more energy into acquiring new customers than into retaining existing ones.
Acquiring new customers is expensive.
You’ll roll out a new marketing campaign or tweak the current one to attract interest in your products and services. When the campaign gains traction, you’ll work on convincing them to choose your business over the competition.
You don’t have to go through the entire process with existing customers. They have already made their choice.
You.
- According to research, acquiring new customers is 6 to 7 times more expensive than retaining existing ones.
- A study by Bain & Company showed that a 5% increase in customer retention can increase profit by 25%.
Hyper-personalization strategies help retain customers because your efforts to tailor content to fit their needs make them feel valued, understood, and special.
Customers become stakeholders.
They will become invested in your company and actively support your business through repeat purchases and ongoing promotion within their communities.
5. Gain Valuable Customer Insights
Krispy Kreme’s sales were affected by the popularity of low-carb diets like Atkins and the South Beach Diet.
If you own an online bakeshop, customers’ buying decisions might be affected by reports about the health risks of eating sugar or social media posts on fit, beach-ready bodies.
Predictive AI technology can give you a heads-up on your customers’ buying behaviors.
You can predict changes in customer preferences and introduce new products that meet their demand for healthier options.
Email your customer:
“Hi Frank,
“Now you can eat your donut and have it too! Fresh out of the oven, ZERO SUGAR glazed and filled donuts!
We use sugar-free allulose, which is naturally found in figs and raisins, to prepare our glaze and cream fillings. From your lips and not to your hips, you’ll love our zero-sugar donuts.
We’re confident you won’t notice the difference, so we’ll give you 50% off your first purchase.”
Hyper-personalization gives you access to information that ensures you won’t be caught off-guard by changes in your customers’ buying decisions. You’ll have to anticipate and introduce the necessary changes and retain your customer.
6. Efficiently Manage Operating Budget
In our previous example, the online bakeshop introduced sugar-free donuts to cater to customers who shifted to a healthier lifestyle.
Some of you might be thinking:
“If those customers were a minority of your customer base, why bother?”
You should bother because in this age of social media, indifference toward an interest group could trigger a backlash.
The objective is to retain the health-conscious customers by accommodating their demands.
It’s only an accommodation, not an overhaul.
If 20% of your customers are changing their behavior, test market your new products by adding only 10% to 15% to your current product mix. Then, adjust accordingly.
You can adjust your marketing budget to focus on strategies that provide the highest ROI while also incorporating tactics to retain current customers.
What Are The Best AI Tools For Hyper-Personalization?
Before we give a rundown of the best AI tools to design hyper-personalization strategies, let’s differentiate the three types of AI technologies used by marketers.
1. Legacy AI: A form of predictive AI, Legacy AI studies user behavior by analyzing data on social media interactions, browsing histories, and purchasing trends.
The information is utilized by AI to customize recommendations for product purchases, content development, and to tailor search results for users of the site.
2. Conversational AI: This technology utilizes Machine Learning (ML) and Natural Language Processing (NLP) to analyze and comprehend the context of human language in online interactions.
Conversational AI is commonly used in developing chatbots for customer support services.
3. Generative AI: Generative AI is used to create new content from simple text queries. The AI searches the Internet for information that is relevant to the query, then analyzes and uses the data to produce the search results.
Presently, the best AI tools for hyper-personalization don’t incorporate these technologies into their program.
Therefore, digital marketers and content creators utilize various AI tools to establish a comprehensive hyper-personalization strategy for online businesses.
Another approach is to choose an AI tool with the capabilities to support your hyper-personalization strategy.
Here are three of the best AI tools you can use for your hyper-personalization strategy.
1. Insider
An excellent tool for helping marketers predict customer behavior by providing access to multiple data points. Insider is used to create hyper-personalized content for websites, apps, email, SMS, messaging apps, and Web Push.
🖥️ Application: Website and mobile app personalization, product recommendations, website and content curation, and personalized customer journey across multiple online channels.
2. Braze
Braze is powered by Sage AI technology that enables it to combine personalization, content generation, and optimization, and create compelling hyper-personalization campaigns for email, SMS, and push notifications.
🖥️ Application: Website, mobile, email, SMS, WhatsApp, push notifications, A/B testing, customer journey personalization, and predictive segmentation.
3. CleverTap
Digital marketers use CleverTap to improve customer engagement because of its capability to acquire in-depth customer insights and run tests to determine the best approach to optimize content.
🖥️ Application: Website, mobile app, email, SMS, push notifications, predictive segmentation, customer journey personalization, and voice calls.
What Are The Risks Of Hyper-Personalization?
We’ve discussed how hyper-personalization can help businesses enhance customer experience, retain existing customers, increase sales conversion rates, build the business brand, and efficiently manage budgets.
It’s time to discuss the flip side of hyper-personalization: Its risks.
1. Privacy Issues: Collecting personal information without the user’s approval or knowledge can be viewed as an invasion of privacy.
2. Unsustainable Cost of Implementation: Utilizing powerful technologies with their complex systems will come at a cost that might be unsustainable for start-ups and small and medium-sized enterprises.
3. High Cost of Cyber-Attacks: Microsoft estimates that 600 million cyberattacks happen daily. If your network security measures are inadequate and not regularly updated, hackers may steal sensitive user information, jeopardizing your business’s finances and reputation.
4. The Creep Factor: There’s a fine line between becoming an admirer and being a stalker. Some customers might feel creeped out by hyper-personalization strategies that are too specific.
5. AI’s Biggest Flaw: The current iterations of AI aren’t capable of understanding context. Analyzing human interactions that involve analogies, hyperboles, and metaphors could lead to flawed customer profiles.
Conclusion
Hyper-personalization is an effective tool for businesses to connect with customers and build strong, lasting, and sustainable relationships.
Mishandled, hyper-personalization presents risks for customers and the business.
Accessing data without consent is invasive and puts customers at risk of having their confidential information stolen because the business did not prioritize network security.
The key to maximizing the benefits of hyper-personalization is to find a middle ground where you can optimize its power without compromising the privacy of your customers.
Be transparent with your customers. Inform them about the AI technologies used for data collection, how these technologies will be utilized, and the benefits they will provide.
Assure your customers that their data will be protected by robust network security protocols. Having your website covered by Secure Sockets Layer (SSL) certificates will elicit a sigh of relief.
Technological advancements and changes in customer behavior are interconnected. As technology evolves, so do customers’ tastes and preferences.
Hyper-personalization will help you keep tabs on your customers and ensure your business stays relevant in the years ahead.
Are you ready to hyper-personalize your marketing strategy? Book a call and we’ll schedule a free consultation.
