As retailers and manufacturers increasingly adapt to meet their customer’s buying preferences, the focus on personalization has turned toward digital channels using personalization software, and the customer’s personalized experience along the buying journey.
Because of the focus on the personalization engine as a powerful tool for phenomenal customer experiences, we are introducing the Personalization Maturity Chart, which outlines the different maturity phases of a personalization strategy and the corresponding impact to the organization’s bottom line.
Phase 1: Basic Recommendations
In today’s world, basic product recommendations are table stakes and considered the most primitive of approaches. As a consumer, everyone has experienced them. The recommendations can be tailored to a specific customer or be utilized across a group of anonymous customers.
This approach usually involves looking in the rear view mirror and it’s business impact increases as you are able to target against specific segmentations.
Phase 2: Segmentation & Targeting
The second phase of personalization maturity involves the introduction of targeting products and content based on segments. With this approach, customers are grouped together into buckets based on commonalities. Typically, we see traditional categories—geographic, demographic, psychographic, and behavioral to create segments.
When segmentation is combined with recommendations to create targeted offers, retailers and manufacturers will experience an increased business impact of their personalization strategies.
Phase 3: Machine Learning
Retailers and manufacturers can mature their segmentation-based personalization approaches that rely on historical patterns, rules-based actions, and collaborative filtering with a solution that leverages machine learning to predict forward-looking buying intent. Machine learning utilizes a set of algorithms to dynamically drive personalized experiences for customers—whether that be promotions, recommendations or interactive web content. The result is a significant reduction in manual effort, the ability to automate targeting, and the potential to surface highly relevant content to increase conversions and engagement. This is all made possible with a personalization engine that produces the true individualized experiences in Phase 4.
Phase 4: Individualization
The fourth phase of personalization is individualization or commonly referred to as “Personalization 2.0.” Individualization builds on the core principles of personalization—segmentation, targeting, and relevant content—by enabling the creation of 1:1 experiences for each individual customer. Each customer becomes a unique segment of “one,” enabling retailers and manufacturers to drive truly personalized experiences.
Bonus: Amplify Personalization with Real-Time Data
Most personalization software engines will utilize a batch-based approach for syncing user data. User data is periodically sent to the system and analyzed for upgrading personalization rules or algorithms – creating a missed opportunity for engaging your buyer with relevant content at that specific moment in time while they are showing buying intent.
Real-time data makes all the difference. Amplify any phase of your personalization strategy by capturing customer behaviors and preferences to create predictive models of buyer intent in real-time. Personalization software based on real-time data actively create personalized experiences based on what content known or anonymous customers are engaging with at that specific moment in time.
Each phase on the Personalization Maturity Chart is valuable and has a place in a personalization strategy. As retailers and manufacturers look to increase the impact of personalization efforts, they must consider maturing their approaches for sustained competitiveness.
Today, most companies have implemented a basic personalization engine, but there is significant opportunity to improve its effectiveness by leveraging modern technologies and maturing the approach to stay competitive. Find out how in our eBook, The Ultimate Guide to Personalization.