Why Personalization Matters?

“In the future, everyone will be famous for 15 minutes.”

I don't think we really need to mention who said this, but let's do it anyway. This iconic statement, attributed to Andy Warhol, was introduced in 1968 during an exhibit program at the Moderna Museet in Stockholm and is a timeless reflection on the fleeting nature of fame.

In the digital era, it appears that his prediction has come true. People really want their 15 minutes and they are willing to do anything to get it. But it's not just people—companies want to be remembered too and they also aspire to leave a lasting impression in the minds of consumers.

The problem is that, for companies it is a bit harder. The rule changes a bit, and instead of 15 minutes, they might only have 15 seconds to grab customer attention.

According to Hubspot, more than half of your website visitors (55%) spend less than 15 seconds on your site. You just have 15 seconds to capture their interest, convince them to buy your product, draw them into your brand experience, and learn everything about your company.

The tricky part is that, with more and more people browsing, there’s a ton of content online, all fighting for attention. Plus, people often have many tabs open in their browsers, ready to compare you with competitors. Just looking at my screen now, I’d say I have around 15 open windows - no pun intended.

A customer forms their first impression within half a second. So your content has to be really relevant and match what they're looking for, or they'll click away and…

In marketing and customer experience, personalization means using data like demographics, behavior, and past interactions to provide users with more targeted and relevant content, messages, and recommendations. In a nutshell, personalization is all about using what you know about your customers to make their experience with your brand more relevant.

To understand why personalization is so important, let’s consider your own experience as a user.

When you go to a website, do you like getting recommendations and offers personalized just for you? What about seeing content related to things you've recently bought? Most people expect this when they're online and most probably you too.

Stepping into the user's perspective makes you understand the importance of having a personalized website: it leads to more satisfied users and boosts your chances of turning them into customers. When visitors find tailored content and experiences that align with their preferences, they are more likely to stay engaged and satisfied with the site. This not only makes their experience positive but also creates a strong connection between them and your brand.

In addition, personalized websites have been shown to increase conversion rates by providing relevant content, recommendations, and offers, effectively guiding users through desired actions. Personalized websites are like helpful guides, showing users what they want and guiding them to do things you want them to do, whether it's making a purchase or signing up.

Let’s back up this theory with some numbers.

84% of consumers emphasize the importance of being treated as a person, not just a number, in winning their business.

71% of consumers get frustrated when a shopping experience lacks a personal touch.

74% of customers find it annoying when website content is not personalized.

42% of consumers get bothered when content is not tailored to their preferences.

70% of consumers say a company understanding their personal needs affects their loyalty.

67% of consumers think it's important for brands to adjust their content in real-time based on what they need.

In a world where most companies are working on making personalization better, those who don't focus on giving a personalized experience might end up falling behind. According to McKinsey, companies that excel at personalization generate 40% more revenue from those activities than average players.

As mentioned earlier, numbers don’t lie. However, many businesses still stick to the no-personalization approach, forgetting that people are individuals, not just numbers.

Back in the day, people had to deal with whatever businesses gave them, even if it wasn't exactly what they wanted. But not anymore—well, almost not anymore. This is because there are three types of website personalization, one of them involving no personalization at all.

I'm not sure how many of you are familiar with Luigi Pirandello's novels or even know the author himself. However, one thing is for sure – whenever the topic of different personalization approaches comes up, my mind goes to one of Pirandello's masterpieces, "One, No One, and One Hundred Thousand.” Now, I won't even try to unravel Pirandello’s plot because, as Hebert Mitgang put it, explaining a Pirandello plot is dangerous. But, I’d like to use the title as a guide to understanding the three personalization approaches: No Personalization, Hyper-Personalization, and Segment-Based Personalization.

Let’s start with Pirandello's concept of the "No One”, where the main character Vitangelo Moscarda, in trying to conform to the other’s perceptions, becomes a sort of “no one”, a person without a fixed identity. This aligns with the No Personalization approach in websites. It’s a simple and cost-effective approach, but it treats everyone like they're exactly the same because all users get the same generic and standard content and experience. This approach wipes away individuality, creating a sense of being lost in the crowd. While it's easy to implement, the risk is to leave many people disconnected and unsatisfied; plus it often doesn't effectively convert visitors.

Pirandello's concept of "One" reflects self-perception, where the protagonist becomes aware of how others see him. Just as Moscarda adjusts his identity based on others' perceptions, hyper-personalization tailors your digital experience based on your needs and preferences, considering what you like and do on a website. Using a personalization platform, each visitor gets an individualized website with customized content and product suggestions. But, keep in mind, that hyper-personalization needs a lot of resources and might not be the best fit for smaller companies that don't have tons of data and content like big platforms such as TikTok, YouTube, or Spotify.

With segment-based personalization, we can link to the idea of the group, metaphorically represented as "one hundred thousand” in Pirandello’s novel. Here, people are grouped based on what they have in common, like interests or behaviors. Each group is treated as a collective, and personalization efforts are applied to these segments. It's a middle ground between personalizing everything (like hyper-personalization) and personalizing nothing. This way, you can create an adaptive website that fits the interests of larger groups without worrying about every tiny detail. Segment-based personalization has become a more accessible and practical form of personalization for many companies, being the smart way to give people a better experience with higher conversions. It demands minimal effort but brings significant gains.

According to McKinsey, only 15% of companies feel they've nailed personalization. They see it as a must-have, but many are unsure how to make it work.

So maybe you're wondering, what's the best personalization strategy to implement?

We've ruled out the No Personalization approach because, well, numbers and data tell us it's not the way to go. Hyper-personalization, although beneficial, can be super expensive.

In contrast, segment-based personalization groups visitors based on what they have in common. It's a smart balance between personalization and efficiency, making it budget-friendly and scalable.

Segment-based personalization can significantly increase conversions, all while requiring a modest investment when compared to the more resource-intensive hyper-personalization. By tailoring content and experiences to specific user segments, you get more value for your investment and enhance user engagement. It's a cost-effective strategy that delivers substantial returns for improved conversion rates.

Lots of businesses find it a clever and user-friendly choice for creating adaptive websites that work well for everyone. An adaptive website is a website that automatically adjusts itself based on the specific needs and preferences of the visitor. This leads to improved customer satisfaction, increased engagement, higher conversion rates, and ultimately, higher revenue.

Now, are you ready to dive into Personalization? Starting your journey to personalize your website is easier than you think. If you're keen on the benefits of segment-based personalization, check out The Complete Guide to Getting Started with Personalization. You will learn how to create a personalized website with adaptive content that meets your visitors’ needs while boosting conversion by 30% or more.

In our next Personalization blog, we’ll be exploring the crucial topic of "Why You Need an Adaptive Website”. Discover all the benefits, ranging from higher conversions to increased revenue.