What is personalization?
In digital marketing and ecommerce, personalization is the practice of tailoring experiences and communication to individual customers based on the data you have collected about them. All kinds of digital experiences can be tailored. Besides website personalization, tailored experiences can be created with emails, advertisements, product recommendations, online chats and more.
There are three main types of personalization:
- Self-identified personalization is where the user is able to choose which kind of target group they belong to. For example, when they log into a site and receive a “welcome back” message.
- Segmented personalization is in-session rule-based personalization where the user is placed into different segments depending on their actions in this session or the next.
- AI-based personalization is individualized personalization where machine learning makes it possible to determine what actions a user will take next. Personalized product and content recommendations are calculated in real-time. The more the user visits the site, the more accurate the recommendations and content become.
Personalization drives customer centricity
Customer centricity is a business mindset and practice that revolves around creating positive experiences that resonate with your customers — with benefit of increased engagement and long-term loyalty. Personalization plays a huge role in creating positive customer experiences.
Rather than using data collected to solely measure key performance indicators, customer-centric businesses use data to gain insights about who their customers are and what they want. Such insights represent a valuable feedback loop and are what marketers can use to create the personalized experiences customers actually want to engage with.