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The power of personalisation: Leveraging data analytics for customer-centric experiences

Authors: Olga Potaptseva - European Customer Consultancy, Founding Director

The article was written for


The era of one-size-fits-all propositions has given way to hyper-personalization, a strategy driven by data analytics and artificial intelligence (AI). While the full extent of regulatory risks and customer concerns is yet to be addressed, this strategy is increasingly proving its worth in meeting customer expectations, delivering tailored experiences, building trust, boosting engagement and driving business growth.

Understanding hyper-personalisation

To define hyper-personalization, we turn to Deloitte's insightful description, which characterizes it as harnessing real-time data to generate insights by using behavioral science and data science to deliver services, products, and pricing that are context-specific and relevant to customers’ manifested and latent needs.

In essence, hyper-personalization goes beyond surface-level customization; it delves into the nuanced preferences and evolving needs of each individual customer.

The need for “human in digital”

The Covid-19 pandemic accelerated the adoption of digital channels across various industries, including banking, retail, entertainment and healthcare. As customers increasingly rely on these channels, organizations must accelerate their efforts to deliver on the blend of “human in digital” expectations.

Based on findings from a recent Omdia study, 81 percent of consumers say they want more self-service options, yet only 15 percent expressed a high level of satisfaction with the tools provided to them. This is in contradiction with what businesses believe, which is that 53 percent of consumers are very satisfied with their self-service.

These stats do not surprise us as 61 percent of CX professionals admit they do not have the capabilities to engage with customers across channels in personalized ways.

In an environment where 70 percent of consumers say a company is only as good as its service – and where even a single poor digital interaction can be detrimental to a company's reputation and bottom line – it is time for businesses to organize around the customer, engage employees and provide both with the contextually relevant information they need in real time.

This will only happen when a company grounds its culture in empathy toward customers and employees.

Leveraging data analytics for personalisation

The immense potential of leveraging data analytics for personalisation becomes ever more apparent. Businesses have a responsibility to create the future where "good" represents a state of constant improvement, where customer tools evolve alongside customer understanding, where personalisation not only meets but anticipates customer desires, and where data analytics becomes an indispensable ally in crafting better experiences.

To activate this future in a compliant, safe and empathetic way, businesses must integrate four principles into their digital transformation framework:

1. Customer objectives: Many of your customers will be looking to reduce effort when interacting with your products and services. By going beyond demographics, purchase history, browsing behavior and feedback, and by understanding customer needs and wants, important moments and motivations, relevant out-of-industry and lifestyle preferences, brands can use personalisation to provide proactive support and assistance.

With rich data, machine learning algorithms are able to provide tailored product recommendations and low stock alerts, account activity monitoring to protect from fraud, healthcare appointment reminders, augmented reality for apparel or real estate shopping, subscription renewal notifications, virtual assistants such as Alexa or Siri and many more features.

Brands must exercise care to ensure proactive support is indeed relevant to effort reduction and customer lifestyle improvement.

2. Operational objectives: From efficiency and automation to scalability, compliance and security, operational objectives must not be ignored. Hyper-personalisation must be designed not to add a burden but to help streamline processes and reduce manual interventions.

3. Business objectives: A hyper-personalisation strategy needs to improve customer retention, loyalty and advocacy, thus increasing customer lifetime value and providing a competitive edge.

4. Employee objectives: Change management is a crucial component in executing a shift from human-to-human to “human in digital”. As many as 84 percent of business decision-makers and 79 percent of employees think it is important to receive employee buy-in to guide a digital transformation to success.

In organisations that embrace a data-driven culture, leaders and employees leverage analytics to inform decision-making, refine processes and adapt behaviors.

Ensuring data privacy and security: A checklist

To successfully obtain customer consent for data collection while prioritizing data privacy and security, companies should:

Emphasize transparency and clear communication about the purpose of data collection;

Offer explicit opt-in mechanisms and granular consent options;

Articulate the tangible value customers will receive;

Anonymize and aggregate data when possible;

Implement robust data security measures;

Practice data minimization;

Allow for easy consent renewal and revocation;

Establish clear data retention policies;

Conduct regular audits;

Appoint a data protection officer;

Educate users about data privacy;

Have an incident response plan and

Adhere to ethical data usage principles.

This comprehensive approach ensures trust, compliance with privacy regulations and long-term success in utilising customer data for personalisation. Data comes with responsibilities that must be taken seriously.

The impact of personalization

Building trust: If done right, hyper-personalization demonstrates a genuine concern for a customer's unique needs, fostering trust and confidence in your brand.

Increasing engagement: Tailoring customer interactions along their journey significantly boosts engagement. For example, personalized emails exhibit a 139 percent increase in click rates compared to static, one-time sends.

Higher ROI: Engaging customers through personalization not only increases their lifetime value but also delivers a higher return on investment (ROI). A McKinsey study highlights that 76 percent of consumers are more likely to purchase from a company that personalizes their experiences.

Conclusion: Find and address hyper-personalization challenges

In conclusion, it's essential for companies to acknowledge the evolving landscape of customer-centricity and the immense potential of hyper-personalization fueled by data analytics and AI. While many may not yet possess the necessary processes, systems or culture to fully harness this power, the imperative lies in forward-thinking planning and strategic alignment. The future belongs to organizations that deeply understand their customers and assume the responsibility for their well-being, thereby cultivating trust, igniting engagement, and reaping substantial returns on investment.

In the digital age, prioritizing data privacy, nurturing a data-driven culture and remaining agile in response to shifting customer demands are not merely choices but necessities for success. The journey towards hyper-personalization may be challenging, but it is one that promises rewards that are truly boundless in today's ever-evolving business landscape.


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