Hyper-personalisation: is it always needed?

Hyper-personalisation: is it always needed?

26th March 2024 · Arvato · Blog

Stephen Miller, IT & Innovation Director, ArvatoConnect

Hyper-personalisation – using data to constantly tailor service to customers’ ever-evolving, unique set of needs – has become a buzzword when it comes to digital transformation.

And for good reason. Done well, it can deliver powerful results in terms of customer retention, citizen and customer service quality, and sales.

But having this capability shouldn’t be a goal for its own sake. It might not be right for every organisation, right now.

Here’s why and how businesses and public bodies can determine if it will be more of a help, or a hindrance at their stage in the transformation journey.

Cost over return

Despite the research we conducted for our Digital Deficit report finding that personalising the customer or citizen experience is a top five transformation priority for both the public and private sectors, very few organisations say they are implementing the technologies to help deliver it.

The simple truth is that hyper-personalisation, delivered to its full potential, can be a time-consuming, resource-intensive thing to get right.

That’s not at all to say that it isn’t worth pursuing – the right designs can deliver many multiples of return on investment. But it does mean that, in the worst cases, applying it where it’s not needed can be a net drain on resources.

In many cases, inappropriate use or focus on hyper-personalisation is because the decision to invest has been led by the promise of the technology, and not citizen, customers’ or the business’ needs.

This is more common than you might think. Our recent Digital Deficit report – which explored where there were gaps between organisations’ digital transformation ambitions and realities – found that 72% of public sector bodies, and 77% of businesses admitted that their transformation strategies were being driven more by tech, than what their citizens or customers require.

Another reason for it is trying to keep pace with peers and competitors – something 40% of public bodies and 39% of private sector organisations said was a driver shaping their digital transformation plans.

Steps for success

The key thing to determining whether hyper-personalisation is the right step to take is therefore to flip this influence around – to base strategy on what end-users, whether colleagues, citizens or customers, actually need.

This sounds obvious, but is something that is still so often missed. Our Digital Deficit research also found that 83% of public bodies and 81% of businesses hadn’t gathered feedback from customers or citizens on how their existing solutions were working.

If feedback shows that there is a clear demand, and business case, for a real-time, highly personalised service, then it’s critical that it isn’t subsequently applied without careful thought.

Following some simple steps for digital transformation best practice can help organisations unlock its advantages in way that is sustainable and most likely to deliver meaningful results.

The first step is already broadly covered by the insight-gathering exercise. That’s all about defining objectives and making sure that any transformation action is in line with an organisations’ strategic goals; that change is necessary, not just a nice-to-have.

From there, organisations can then build a personalisation solution that’s fit for purpose.

Here, it will be important to make sure that the impact to other departments of any decision to introduce hyper-personalisation is considered. As a solution, it relies on strong, real-time data flows, so could require collaboration from IT departments, as well as everything from finance to logistics teams to ensure that information is readily available, and in the right formats to be used.

When it comes to developing the solution, organisations will need to consider whether employees need to be trained on new tools or processes that any new technology or processes brings.

For example, if agents are being supported in hyper-personalising their service – by technology that automatically gathers data previously submitted by customers and citizens and feeds it to them to support in-person interactions – they need to know how this information will be delivered. They also need understand how they can use this system to find additional bits of information they need, in-real time, to augment on-the-spot decisions during customer interactions.  

Once hyper-personalised capabilities are up and running, it’s essential to keep a focus on continuous improvement – constantly monitoring how hyper-personalisation processes are working and then optimising to make sure they’re continually delivering against an organisations’ goals.

Data first

It can’t be overstressed how much good hyper-personalisation relies on strong data quality and flow.

This is why, along with steps like the above, it’s essential that any organisation looking to implement it also ensures they have a solid data strategy in place.  

Part of this is about making sure that data is in the right format and the right place, at the right time – ‘corralling’ information across touchpoints and an organisation. In some cases, this might even involve bringing in data from outside of the business, which will come with its own challenges to address.

But it will also be about prioritising security – something our research found more than two thirds (68%) of public sector and almost three quarters (72%) of private sector organisations didn’t feel they could confidently do.

It only takes one instance of a security breach to unravel any benefit that hyper-personalisation delivers in terms of customer trust and loyalty.

The right approach

Organisations are widely considering hyper-personalisation. Our data shows that, for both the public and private sectors, it’s one of the top five transformation priorities.

For many businesses, it is the right thing to be aiming for. But for others, there may be better ways to achieve the results they actually need when it comes to their transformation and customer or citizen experience. It’s crucial to determine the degree of personalisation that aligns with your strategy and your customer base, this decision needs to be made based on a thorough understanding of both your audience and organisation.

At ArvatoConnect, we help businesses reshape and reinvent how they connect with those that matter most, including identifying opportunities for capabilities like hyper-personalisation. For more information about how we could support you in your digital transformation plans, contact: enquiries@arvatoconnect.co.uk.  

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