Context is king in personalization

Personalization is no longer an extra perk. It’s now a must—a necessity in today’s digital world.

A global study recently released by Mindtree found that 74% of consumers will buy new products if they receive relevant personal recommendations, while 92% of companies believe personalized promotions will lead customers to buy products they have never purchased.

However, the meaning of personalization has evolved alongside the ever-changing expectations of customers. To anticipate customer needs and behavior, organizations have often employed a “one to many” approach by identifying broad segments of consumer types to create a set of personas, and then mapping their customers to those personas.

But the results of this segmentation were never compelling. The reason is that the same customer may act differently depending on a number of situational factors, which means that businesses must take the context of customer behavior into account. Context is the only way to turn a one-to-many approach into true one-to-one personalization.

For example, it’s good to understand that a certain customer prefers to go on beach vacations, and to target this customer whenever a company puts together a good deal on beach destinations. But what’s more important is to understand the context in which the customer decides to take beach vacations, analyze those contributing factors, and then put together a relevant promotion. Some examples of context are:

  • Does he travel with his whole family, or just his spouse?
  • What kind of transport does he use? What are his dining preferences?
  • Does he enjoy fishing, sailing or other beach activities, or does he prefer to just sunbathe?
  • How large is his family, and what demographic do they fall into?

This is true across industries. For grocery retailers, it’s easy to know that a consumer always buys bread, but the most successful retailers will also know what type of bread, whether the customer also buys butter or jam and what types.

So what is happening today?

We experience context-less recommendations all the time. You watch a horror movie one night on your preferred video-streaming provider, and for the next several weeks, you’re inundated with recommendations in that genre—in the name of personalization. The way you’ve suddenly been pigeonholed can be scarier than the horror movie itself.

Or maybe you purchased a baby stroller from an online retailer, and now all the websites you go to show advertisements for baby strollers. This is ridiculous—you have already purchased your baby stroller!

Contextualization is the critical missing component. Acknowledging a recent customer action will no longer suffice without linking it to where, when and why.

By focusing on personalization with context, you can find the right balance of information to provide based on what pages customers have visited, what they’ve searched for, how they came to your site, and how they’re viewing your content—on the web, mobile or any other device.

Consider the consumer who just purchased the baby stroller. It would be better to show this person a logical progression of products based on some simple calculations: first teething toys, then baby food a few months later, and some manipulative toys a few months after that. But if the next few purchases are not related to baby products, then this customer’s persona attributes need to change, and so does the priority and probability of product affinity.

Introducing context to personalization

To implement this context-aware personalization, a unified customer profile is needed. This profile has to be a progressive persona that learns on its own. There are technologies that enable this through data collection and consolidation.

Building this kind of 720-degree customer persona requires four main categories of data: demographic, psychographic, transactional and cross-industry affinity.

For many organizations, integrating and making sense of data from all four categories seems too complex a task. But most already have enough data to start the journey. Transaction details, geographic data, page views, search data, downloads and demographics all provide a great starting point for organizations to make sense of customer choices and predict future behavior.

Delivering personalization

Today’s customers not only look for a range of options, but also want recommendations and support in their decision-making—guidance as to what would best suit them and fulfill their intent.

Mindtree believes that personalization is the key to both growth and customer loyalty. With a modern, advanced personalization strategy, you can not only satisfy the customer’s present need, but also steer him higher in your value chain. This will increase his satisfaction, while making him an ambassador of your brand. To learn more, download our e-book, “Get Personal to Make Digital Real.”