“Personalization” is an overused term. Although it’s not necessarily the wrong way to describe catering to each individual, it’s been used so often that nobody knows exactly what you mean when you say it.
With up to 73 percent of consumers craving “individual retail” (i.e., an individualized shopping experience), the process we’ll be talking about here is something more than personalization. “Individualization” takes a far more customer-specific approach to differentiation.
Individualization focuses on a segment size of one, with content crafted for a single person who is involved in a certain activity at a particular physical location at a certain point in time.
Individualization doesn’t replace personalization; it takes it to the next level by helping brands cultivate real relationships with online users.
As with any relationship, shoppers expect the people—or brands or websites—they interact with to remember who they are after their first meeting and then to act on that information to tailor how they choose to communicate.
These kinds of interactions are, by definition, individualized in real time.
Personalization vs. Individualization
Although the two terms may seem similar, individualization more accurately describes the new generation of tailored contextual services in which individual differences tend to trump group differences.
Personalization in the traditional sense accounts for several categories of activities. Each of these provides informative value but illuminates only a piece of a much more detailed picture when it comes to actual individual preferences.
Testing: During A/B testing, different users are shown different content or designs to see which they prefer. This is most often done at random, so it’s not true individualization from the perspective of actually knowing anything about the user.
CRM: Aggregating data about a user to include user-selected preferences, social graphs from connected social networks, or offline data — such as past purchase history and types of products the customer has purchased or shown interest in — are all forms of CRM personalization.
Segmentation: Grouping users who have similar behavior and interests allows organizations to deliver a quasi-personalized experience.
Personalization: Whether automatically or manually, showing the right content to the right user is the goal of personalization.
Individualization: This tactic focuses on the context of where an individual is and what he or she is doing in that specific moment as opposed to just who he or she is.
To illustrate, we might observe differences in men ages 25-30 and ages 30-35 and see that the older group is 10 percent more likely to prefer polo shirts. Meanwhile, the younger group is 10 percent more likely to prefer T-shirts. This information doesn’t tell us anything about the particular man we’re targeting, regardless of his age. After all, maybe he’s really shopping for a birthday present for his dad.
With proper context, however, the right messaging is simple to figure out. Is the man buying a shirt for work or a day at the beach? Although a man who’s 25-30 might be more likely to prefer a T-shirt, he might not be able to wear one in the office.
Likewise, if a 30-year-old man — who straddles both age ranges — is on vacation in Bali, chances are that he isn’t seeking a button-down. Thus, the context of why he’s shopping for shirts to begin with is much more useful than understanding his age demographic.
Individualization relies on real-time marketing. This allows campaigns to work at the speed of the customer rather than the speed of the marketer. Bear in mind, though, that most individualized actions have time dependencies.
Rather than send daily or weekly email blasts (which are all personalized with each recipient’s name), individualized efforts would recognize whether the recipient is in personal or professional mode, as business and personal decisions will often vary.
For example, let’s say that Suzie is a composite business traveler searching on a hotel site between 9 a.m. and 5 p.m. on a weekday. If we discover that Suzie is on the same hotel site between 6 p.m. and 10 p.m., she’s likely a leisure traveler at that moment. Content that’s individualized to Suzie at one time of the day may not be relevant for her even just a few hours later.
With individualized, real-time marketing, the time window for effective marketing may be no larger than one or two minutes.
There’s growing evidence that younger generations prefer to build personal relationships with brands more than older generations. Millennials have real spending power and are set to overtake Generation X with a projected $1.4 trillion in spending by 2020, making individualized engagement more important than ever.
MetLife seems to understand the Millennial thirst for a sense of connection with the companies they interact with. Its website employs a highly individualized system designed to help customers complete the complex process of signing up for insurance, for example. While the process starts at the website, it also includes email, display, and SMS notifications for follow-up.
Such individualized systems are critical resources for brands looking to understand their customers on a deeper level. Descriptive marketing systems such as traditional CRMs will continue to be used to refine messaging, but they’ll take a backseat to real-time, contextual systems.
Of course, this type of individualization is only possible with the right technologies in place. High-bandwidth, low-latency wireless internet connections, big data systems, and predictive analysis are cornerstones of individualized recommendations. By using these tools correctly, any company can individualize the customer experience.
With so many people carrying smart devices with them everywhere they go, businesses can’t afford to forgo individualizing their online brand experience. Let’s stop using personalization as a catchall term and focus on the context and behavior of each person to truly individualize his or her experience no matter where it occurs.
Peter McLachlan is a cofounder of Mobify, a mobile customer engagement platform.