▷ How hyperpersonalization impacts customer loyalty | NTT DATA

Wed, 01 June 2022

How a hyper-personalized experience can directly impact customer loyalty

If only a few years ago “segmentation” was one of the main buzzwords marketing specialists used to use when talking about customer retention, today, the main lever of differentiation and customer loyalty is our ability to hyper-personalize the experience and, consequently, to create unique emotions in each of the key moments of our relationship with them. With new competitors constantly flooding the market and an increasingly digitalized world, in which the consumer's attention span is shorter than ever, if a campaign does not speak directly to its target, it will easily get lost.

Thanks to technological advances, hyper-personalisation is much more than addressing the customer by name. It is the ability to use all the information we have in-house and link it with external, experiential data, and put it to work to facilitate an emotional connection between retailers and customers, increasing brand loyalty. And to do this at scale, in real-time and with real business impact, is only possible with the support of technology.

So, what is hyper-personalization and what are the benefits for retailers?

Hyper-personalization: what it is and why retailers need to understand its potential to increase revenues

While traditional personalization makes use of information such as a customer's name, location, or purchase history, hyper-personalization leverages far more advanced conversational analytics such as browsing practices, purchasing patterns, cross-platform reviews, analysis of phone calls, Whatsapp or chats, and other real-time behavioral data to fully understand what the consumer wants or needs at any given moment.

At NTT DATA, we believe customization has two main components: it can be a powerful competitive advantage and, in order to customize experiences at a large scale, retailers require a high level of technology. The benefits are worth the investment though. To name just a few, studies have shown that retailers that use hypergroup’s (BCG) Personalization Maturity Index, retailers saw a 25% increase in revenue consistently due to their advanced personalization capabilities. Also, 110% of customers said they were likely to add more items to their basket if the experience was personalized.

How popular is hyper-personalization in the retail sector compared to other industries?

Although a highly customized customer experience is increasingly popular, it’s still a challenging concept for many retailers today. Many in fact claim to use hyper-personalization as a sales and marketing tactic but the experience they’re offering is still a form of segmentation based on traditional customer engagement models and patterns, without taking into account behaviors, sentiment and their real, and very importantly, ever-changing needs and expectations.

Currently, the US is at the forefront of innovation in hyper-personalization because they invest more in developing advanced technologies such as artificial intelligence, machine learning or data analysis. The incorporation of sentiment and customer knowledge is key to the success of relationship models and that is only possible with advanced technological tools and programs.

Other industries such as the recently interconnected filming and technological sectors have been very receptive to hyper-personalization. Netflix, the undisputed leader in the creation and distribution of content and streaming services, is a clear example of this. Netflix adapts, among many other things, the covers of its films according to the preferences and patterns of the consumer, creating a unique experience that translates into high engagement and brand loyalty. In the case of Pulp Fiction, for example, people who have recently seen films starring Uma Thurman will see the classic Pulp Fiction cover with Uma Thurman, while others who have recently seen John Travolta films will see Travolta on the cover.

How can retailers start hyper-personalizing their customer experience?

Although the process of defining a highly personalized customer journey and implementing the technologies that support it is an ambitious task, it is important to clearly define the required key pillars before getting started:

1. Align your business objectives with experience measurement and management.

It is key to identify the business KPIs in order to design an optimal experience measurement and management program that will allow companies to directly impact the expected results. Companies should make strategy, technology and operation coexist in order to differentiate themselves from the competition in a sustained manner over time.

2. Centralize all operational and experience data.

It is important to listen, analyze and act systematically, correlating each and every data, avoiding information silos. By collecting data from each moment of the journey, companies can establish personalized customer relationship models adapted to their reality, avoiding generalities, which will have a positive impact on customer sentiment in a continuous and sustainable way over time.

3. Omnichannel listening

It is not enough to focus the strategy on "traditional" channels such as email, instead listening must expand to all channels through which companies can relate to their customers.

Phygital spaces, such as the new WOW Concept store created by Dimas Gimeno, successful Spanish entrepreneur and former president of El Corte Inglés 2014 - 2018, are becoming increasingly popular and specialists agree that they are the future of companies in the sector. This revolutionary new space combines metaverse-inspired aesthetics, the latest technology and art, in an immersive customer experience.

4. Measure and record everything that will impact strategy and the action plan.

Link the internal data of the company with external data coming from each of the communication points: WhatsApp, email, chat, reviews, RRSS, sms, calls, physical spaces. This is the key to having the ability to integrate it into the systems and generate a culture of constant measurement and management of the experience. This in turn allows companies to act continuously and always offer the best experience, which is the hyper-personalized one.

Which technologies are currently used in developing a highly customisable experience?

Artificial intelligence and machine learning play a key role in natural language processing. These technologies help differentiate the many subtleties of the human language that uncover emotions and intentions, only to use them back in messages to the very consumers they gathered the information from.

Personalization has come a long way since its segmentation days. Nowadays, in order to develop a hyper-personalized process, manage and measure it, retailers must fully align their customer objectives with the business KPIs. Employees must also be involved in this process by ensuring that the voice of their customers, their experiences and needs are known within the organization, so that hyper-personalization can become a goal in itself and a large part of the company culture.

At NTT DATA, we believe that the moment for a 'phygital experience' is now which is why we developed a 360-degree approach that measures both the internal company data of a retailer (transactions, segments, operations, logistics, distribution, suppliers and more), and external data such as customer feedback, surveys, reviews, calls, comments on social networks, activity, web use, etc.

Our main goal is to analyze and identify actionable insights in real-time that generate an impact both individually and at scale, which is only possible with the help of retail solutions that rely on advanced technologies.


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