How to embrace hyper-personalization: ‘Run towards it…but be empathetic and ethical’

It’s about using the full breadth of your first-party data and AI tools to identify behaviors and intent, to be able to market with relevancy. And it’s about understanding your customers ‘implicitly’, not just when they’re interacting with your brand. “You can deploy the smartest tech. But having a great understanding of likely consumer behaviors and consumer psychology will yield the best results,” Woolf says.

He was speaking alongside Eddie Short, founding partner at Intelligent Enterprises Partners, Ali Malek, executive director of Data Science at OMD and Alexandra Foster, director of banking, financial services and insurance at Fujitsu. As AI is increasingly putting the ‘hyper’ into hyper-personalization, the panel discussed how brands can move forward with confidence in a world that increasingly relies on consent, trust and data.

Moving beyond CRM and data silos

True hyper-personalization needs to be baked into an organization’s culture, systems and processes, the panel agreed. Messaging should move from a ‘many to many’ process to a ‘one to one’ approach, where the right message is delivered to the right person for the right product at the right time.

As Foster says, the focus should always be on answering ‘what’s in it for me?’, from a customer perspective.

And when it’s delivered well, the rewards are huge: “We were able to cut up to 70% of cost per lead for one of our campaigns,” says Malek. Woolf also highlights a recent campaign which achieved a ninefold increase in conversion for a mutual fund product through personalized marketing based on behavioral data. Other real-life applications shared by the panel include using AI to learn about routines and behaviors from mobile phone usage without identifying the consumer and providing customized mortgage statements that suggest optimal payment plans to pay off loans faster.

But how can marketers balance these wins with the tightening data and AI regulations?

Responsible data practices build engagement

Marketers do well when they remember that regulation doesn’t hamper innovation because “risk and performance are two sides of the same data coin,” says Short, emphasizing that the same data used for compliance can be used for marketing and customer targeting.

Baking compliance into every aspect of the business and eliminating silos – or building “privacy by design” as Malek says – will ensure it’s easier to address both data risk and performance needs, while simplifying processes and improving efficiency.

Ultimately, Foster advises, brands should seize the opportunity of data regulation, rather than see it as an obstacle. She believes it’s far more than a box-ticking exercise: “We not only have a joint responsibility to really prioritize those ethical considerations and build trust through transparency…but also have the ability to set the global standards, the framework, and the ethics around AI and data practices so it’s the best for the consumer.”

Trust trumps performance scores

Building consumer trust is the ultimate currency these days, and it’s unlocked by genuine value exchanges, where customers receive added value and benefits in return for their data. It’s a virtuous flywheel of personalization. Personalization boosts loyalty, generating more data and better customer interactions, and so on. “When you get consent from the consumer and then they benefit from that personalized service, guess what? They stay with the brand longer, and they buy more,” Woolf explains.

The fact that huge companies such as the US retailer Zappos are now embracing net trust scores (NTS) as well as net promoter scores underlines that gaining – and keeping - consumer trust unlocks success. And it looks like this more nuanced metric is here to stay. Foster suggests that the market is moving towards the industrialization of NTS, where brands and consumers will start to ask themselves if they’re really acting in the best interest of their end-user.

Watch the full session from The Drum Live here to unlock more advice about how to build successful hyper-personalization strategies.