What Is Personalization And Why Does It Matter?

Franco Varriano
November 25, 2020
 min read

Key takeaways

  • Customer experience is important for helping brands purposefully create and improve for their customers at every step along their purchase journey. But there’s a gap: production creation.
  • Customers are increasingly looking for unique, personalized products. That’s what we do at Creative Layer. Get ahead of the competition by signing-up for early access—we're on a mission to empower Creators and Brands just like you.

Introduction to personalization

Personalization, in its simplest form, is about knowing an individual customer so well that you’re able to deliver the best possible end-to-end experience.

Today, that "knowing" and "delivery" of an experience is increasingly done using technology (whereas in "the old days," everyone shopped at specific stores and had relationships with the owners).

There are a lot of important conversations related to this, but that’s not what we want to get into here. Our objective of this post is twofold:

  • i) Give you an actionable understanding of why personalization will (continue to) be one of the hottest topics in coming years—but not in the way it has been until now.
  • ii) Outline how you can get ahead of the curve and take advantage of personalization within your business today!

Let's get started!

Personalization 101

Personalization can deliver five to eight times the return on investment for marketing spend -HBR

Personalization really began as a marketing concept. Historically, the idea was pretty straightforward.

With the advancements in technology from mass media towards more measurable (digital or digitized) tools and channels like websites and social media, brands started to learn more about who their customers ACTUALLY are versus relying on generalized demographic information.

Personalization has been slowly catching on over the last decade, really ramping up in the past five years.

Brands of all kinds began to see that personalization can have an economic upside. It’s the difference between treating a customer like an actual person who has unique tastes and needs, or taking an educated guess at those needs based on their specific behaviours—versus past tactics like dumping the entire catalog in front of them. 

At the end of the day, personalization benefits both parties: brands are able to make more sales and customers get a product or service they actually need. 

The impact is significant. A Harvard Business Review report found that personalization can deliver five to eight times the return on investment for marketing spend. The more sophisticated your degree of Personalization, the more your ROI grows.

Personalization and customer experience

35% of Amazon’s consumer purchases come from personalized recommendations and 75% of what Netflix viewers watch comes from algorithm recommendations -McKinsey & Co.

Personalization efforts began humbly, with more complexity and depth being added over time:

  • It started with personalized emails. The kind that would read: "Hi John" versus "Dear Customer";
  • Then brands started intelligently tailoring product recommendations based on what they knew about you (Amazon is really good at this);
  • Personalization spread from commerce to entertainment. Some services awarded special reputations, scores, or achievements based on your actions (Xbox/PlayStation); others offered a variation on cover art that might entice you to watch something (Netflix). Music recommendations are now based on your moods and/or interests (Spotify);
  • According to a McKinsey & Company study, 35% of Amazon’s consumer purchases come from personalized recommendations and 75% of what Netflix viewers watch comes from algorithm recommendations.
  • With customers’ lives split between the digital and physical worlds, there was (and still largely is) a huge disconnect between these identities. Brands "know you" digitally based on your account preferences and, to some degree, your online choices. Rarely do they have the same understanding of how you behave in the physical world (unless you live in a small town and know the owner of a business).
  • Omnichannel marketing was created in an attempt to blend these two worlds together, aspiring to deliver a better and more personalized experience for customers.

This leads us to the emerging personalization of today.

Hyper-Personalization or Personalization 2.0

We've created so much data and new technologies in our efforts to create a personalized customer experience. But seamlessly connecting the real world to the digital one, it turns out, is pretty complex.

This is why the next generation of blending these worlds together (in real-time and at-scale) must be done with the help of artificial intelligence, machine learning, and other cutting edge technologies.

This is what Personalization 2.0 and Hyper-Personalization are all about. Typically, accessing these new technologies has been complex and expensive, making them inaccessible for many smaller brands and entrepreneurs.


What’s Missing with Hyper-Personalization?

We're glad you asked!

All this innovation is terrific or terrifying, depending on where you stand. Ultimately, it saves customers time, money, and effort by helping them find the right products to match their individual needs.

But we've actually glossed over one really important part of the personalized customer experience: the product.

Your product is an essential part of the customer experience. Most of what we’ve discussed here focuses on the pre-purchase stage of the above figure. After putting in so much effort to better understand the customer and show them exactly the right thing at the right time, we then simply assume they will want to buy that standard product.

Remember: this is the customer you just worked so hard to impress and customize for. Now you’re selling them the exact same product that every other customer can buy. That’s weird, isn’t it?

We thought so too.

This is where Creative Layer comes in.

We're on a mission to change the incredibly important part of the personalized customer experience: the product people buy.

We believe products should be just as unique as the individuals who buy them. In fact, those products should be shaped by them and exclusively for them.

We call this the product personalization experience.

The product personalization experience

Creative Layer is committed to making this experience possible today!

Whereas Personalization 1.0 and omnichannel marketing enabled customers to buy the product that most suited their specific needs, product personalization takes it one step further.

That’s why our mission  is to:

  • Enable everyday people to shape the products they buy in a way that better reflects who they are.
  • Empower customers to add elements of themselves to these products so they are truly one-of-a-kind. Note: there is a difference between Customized & Personalized that we cover here.
  • Support small businesses, entrepreneurs, and creators to harness the power of cutting-edge technologies to grow their business and meet customer needs like never before.

There’s already a wave of brands, products, and experiences that have been redefined by technology. There are also case studies of individuals who have leapt into this space, personalizing products and making them their own. (Read more on these topics by checking out our posts on The Product Personalization Matrix and The Brands Driving The Future of Personalization (Part 1)).

Most inspiring is that these are not stories of massive multi-national brands. They’re the family-owned businesses that are modernizing for the future. The bedroom (or garage) entrepreneurs who have an idea, but don't yet know exactly how they'll make it.

It’s these creators and brands that Creative Layer is building for and powering.

Sign-up for early access to Creative Layer and join us in this journey towards the future of personalization!