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What is hyper-personalization?

Personalizing customer experience has always been a competitive advantage for businesses. Personalization helps create customer loyalty, ease in buying, and better price bargains as well. Brick-and-mortar businesses of any scale in the past have maintained some form of human personalization in their customer interactions.

Online businesses that have emerged in the 21st century are made up of automated programs that serve customer requests and hence do not personalize organically. Personalization in the context of online businesses refers to the wide set of algorithms that help in personalizing a website in one way or the other. These personalization algorithms include products such as Recommendation Engines, AI Personalization Engines, and Rule-based Personalizations. 

Hyper-Personalization is one variety among these sets of personalization algorithms that focuses on treating every customer as an individual and tailoring the content served to them accordingly. Recommendation Engines are hyper-personalized because they recommend content based on your history of engagement and hence consider every customer differently. Also, there are code-based personalizations that ask a few questions from the customer such as name and preference (through a chatbot), and then personalize the website to their likes by embedding personalized attributes right into the code.

Note that not all personalization algorithms treat all customers individually because simpler personalization algorithms consider segments in the population and classify their visitors into a few segments. AI Personalization for instance takes in a few possible page designs and then tries to optimize which page design to show for particular customer segments that respond well to them. Similarly, Rule-based Personalization is further simpler and uses defined rules to target particular variations to various customer segments. But both these algorithms are not algorithms of hyper-personalization.

Which customers should think of hyper-personalization?

Personalization as a whole is a sophisticated method that might not justify the costs to benefit ratio for many customers. Customers should plan to move in a direction of personalization with careful consideration. Some of the factors that should be considered are as follows:

  1. Do you have a large visitor base? Automated personalization algorithms need many more visitors compared to say A/B testing to learn complex patterns from data. Hence, one should always consider and discuss if they have a large enough visitor base that can help learn meaningful personalization patterns.
  1. Can you fundamentally provide value by personalizing? Personalization uses customer data to provide a better experience and one needs to think about how much value a particular business can provide by personalizing. Personalizing might not be value-inducing by default for every business. For instance, a gas station cannot get many benefits out of personalization as car owners will fill their gas tanks usually from the nearest gas station. 
  1. Do you have the technical and research capacity? Personalization is a complex endeavour and an advanced skill set is required to make it work in practice. The person driving personalization efforts needs to be adept at generating ideas and understanding why or why not something works. Further, personalization vendors can still only provide limited automation to the effort required. Successfully implementing personalization is not a click-of-a-button job but rather requires a focused team to accomplish.

Why should you go for hyper-personalization?

The correct business objectives need to be identified before heading into personalization. A few benefits you might reap from hyper-personalization are as follows:

  1. Increased KPI metrics: The first and foremost objective of personalization is to drive up conversion rates and other goal metrics that you are targeting. Personalization simplifies the customer experience in the transaction and hence the possibility of conversions and sales increases with personalization. For instance, a fashion retailer that automatically shows clothes of customer preference is likely to get more conversions from the reduced search time.
  1. Better customer communication: In most cases, personalization leads to better customer communication and customer loyalty. You can extract more data from the customer and interact better with them even when you need to approach them directly. Further, you maintain a better view of all your customers which helps in better serving them later in the future. 
  1. Better market positioning: You can improve your market positioning with personalization. Personalization helps create moats that are hard to break. For instance, a customer that uses your platform to buy routine things (such as groceries) might find it very hard to use a new competitor platform because they do not get recommendations on the new platform. Personalization is a great strategic tool to create a better market positioning.

How to get started on hyper-personalization?

If you do decide to get into hyper-personalization there are some areas you would need to plan on and develop a strategy. Some of these areas are as follows:

  1. Understanding the customer segments: You would have to collect data on your customers and holistically understand which customer segments you serve and how you can deliver value to them using personalization. There are many ways to look at customer segmentation and the audience slicing you make will impact the personalization benefits you can deliver. For instance, you can consider customers by demographics but you can also segment them by their needs and interests.
  1. Understanding the source of data: After you have understood the customer segments you want to personalize for, you need to find a good way to gather data that lets you classify your customers into such attributes. A customer data source can be varied. You can collect data from their IP addresses, their account information, and also their behaviour on the website. You can track their interests by defining what products they are interested in and what products are people similar to them interested in. Finally, some websites also take the direct approach and ask customers for data about them to simplify their buying experience. 
  1. Understanding the products that you want to take: Finally, as described before there are a host of personalization products available in the market and each approaches the problem a bit differently. Depending on your needs and where you are in the personalization journey you should invest in an appropriate product that makes sense and will automate the sub-steps in the overall personalization efforts.


Personalization and hyper-personalization are advanced methods for improving marketing, sales, and customer experience. It is an area of value if you can create the best slice in your audience datasets and optimize for things that your customers care about. Personalization efforts can range from simple rule-based personalizations to much more complex hyper-personalization. One should explore the entire spectrum to find the best fit for them. 

VWO Personalize is a powerful personalization engine that lets you deliver 1000s of unique journeys to the right audience, at the right place, and at the right time. Take an all-inclusive free trial to explore it.