Personalization Defined: What is Personalization?

One year for my birthday, one of my closest friends gave me a very special notebook. Not only is a notebook a good gift for me in general, but it was also in my favorite color (red) with a lyric from one of my favorite songs (Arctic Monkeys’ “Fluorescent Adolescent”) on the cover. Talk about a personalized gift! I felt like it was created just for me.

It turns out that it was created just for me. My friend bought the notebook from Etsy.com, and she selected the color and asked the artist to add the lyric to the front cover just for me. In other words, she personalized the notebook for me based on what she knew I liked.

The term “personalization” is used all the time in the world of marketing, but I think sometimes it’s true meaning can get lost. So, in this blog post, I want to spend some time properly defining it.

What is personalization?

According to Gartner, personalization is “a process that creates a relevant, individualized interaction between two parties designed to enhance the experience of the recipient.”

More simply put, we would say:

Personalization is the act of tailoring an experience or communication based on information a company has learned about an individual.

Just like my friend had a notebook tailored based on information she has learned about me over the years (my favorite color and songs), companies can tailor experiences or communications based on information they learn about their prospects and customers.

Tailoring Experiences

What types of experiences can be tailored? Most of the channels in which customer interactions take place can be personalized. Some of the main ones include:

• Websites
• Mobile apps
• Emails
• Web apps (like a SaaS application)
• Online ads
• In-store/in-branch communications
• Online chats
• Call centers

Acting on Information

What kind of information can be acted on to tailor experiences in those channels? It’s basically an unlimited list that contains any information a company can collect about its customers and prospects. But some of the most common include:

• Geolocation
• Source (such as search, email, social, paid ad, referring site, etc.)
• Firmographic information for B2B (such as industry, company, revenue, employee count, technology stack, etc.)
• Buyer persona
• Buyer status (e.g. customer or prospect)
• Time of day
• Browser or device type
• Number of site visits, logins or pages/screens viewed
• Active time spent
• Time elapsed since last visit, email open, call center interaction, etc.
• Purchases made, articles read, videos viewed, etc.
• Lifetime value (LTV)
• Mouse movement (scrolling, hovering, inactivity)
• Affinity toward content and products along with their characteristics (categories, tags, brands, colors, keywords, etc.)
• Email opens and clicks
• Push notification dismissals or clickthroughs

Personalization Examples

There is a seemingly endless number of ways you could use this information to affect experiences in the channels I mentioned.

For example, a B2B tech site that modifies its website homepage experience to speak differently to specific companies is using personalization as part of its ABM strategy.

Experience: Tailor homepage hero image, copy and calls-to-action
Information used: Company name

A B2C shoe retailer that features nursing shoes on its homepage only to visitors that have shown an interest in nursing shoes is using personalization.

Experience: Tailor homepage hero headline, image and call-to-action
Information used: Past browsing history and time spent by category

A financial services site that displays content recommendations based on each visitor’s individual interests is using personalization.

Experience: Present individually relevant content recommendations
Information used: Interests and preferences inferred from visitor’s site engagement

A retailer that sends emails to remind a shopper of an item left in his cart and suggest other products he may be interested in is using personalization.

Experience: Send triggered email with individually relevant product recommendations
Information used: Item abandoned in cart and preferences inferred from visitor’s site engagement

A SaaS application that displays a message offering real-time tips to eliminate user confusion in the moment is using personalization.

Experience: Display timely, in-app message
Information used: User’s actions

A site that highlights the most relevant products for each individual (based on the colors, brands, and styles they usually shop) in its search results is using personalization.

Experience: Show individually relevant on-site search results
Information used: Preferences inferred from visitor’s engagement with products and those products’ characteristics

A call center rep that refers to a person’s account information and site browsing activity to deliver a more helpful customer experience is using personalization.

These examples show only a small fraction of what’s possible with personalization. Essentially, any time a company tailors imagery, messaging, recommendations, communications, interactions, promotions, or advertisements based on something it has learned about a person, it is employing personalization.

Personalization vs. customization

This definition of personalization may sound similar to another concept, customization. But there is a clear difference. With personalization, a company modifies an experience without any effort from the customer. Customization, on the other hand, allows the customer to intentionally modify the experience himself.

For example, when you adjust your Gmail settings to indicate the number of messages you want to see per page and add a signature, you are customizing your email experience. But when Gmail displays advertisements to you based on your interests, it’s personalizing your experience for you. In the first example, you’re intentionally changing the experience. In the second, you’re receiving more relevant ads without taking any action yourself.

Let’s explore another example we’re all familiar with: online shopping. Many e-commerce sites allow you to filter the products shown on a page to help you more easily locate the ones that meet your specific criteria.

That’s customization. You are intentionally customizing the products you see on that page to help you find what you’re looking for more quickly.

But a site could deliver a similar result — helping you find the product that best meets your needs — without requiring you to take any action yourself. Instead, the site could sort the products on the page and list those at the top that meet the preferences you’ve demonstrated by your behavior. For example, if you regularly shop and purchase home decor in black and brushed nickel, it might display those items toward the top of the list. This way, you can find those products more quickly without needing to scroll through pages of irrelevant gold or white decor first.

In another example of customization vs. personalization, let’s consider email frequency. Often when you sign up to join a company’s email list (or when you attempt to unsubscribe), companies offer you the option to modify your preferences to dictate how often you’d like to receive emails (daily, weekly, etc.)

This is another example of customization; you’re telling the company how often you’d like to hear from them.

But you could reach the same end result (more or fewer emails) with personalization too. In that case, the company would pay attention to how often you tend to engage with their email communications and adjust the frequency of email sends accordingly. Recipients who tend to open and interact with more emails will receive emails more frequently, while those who only interact occasionally will receive emails less frequently. That’s personalization.

With both personalization and customization, the end result is a more relevant experience for the customer. But the difference is whether the customer does the work or not.

Personalization Expectations

There are many reasons why an organization may choose to personalize. It can increase engagement, drive conversions, foster loyalty, and improve a number of other KPIs. But at the broadest level, personalization is important because in today’s world, people have come to expect personalization.

For instance, I use Spotify every single day. I have come to rely on the personalized playlists that Spotify curates for me based on a careful observation of what I have listened to over the last several years. I feel the same way about watching TV shows and movies through Netflix. With all the content that’s out there competing for my attention, I love that these platforms sift through it all for me and make recommendations, helping save me time and improving my satisfaction with the services.

Even if you don’t use Spotify and Netflix as regularly as I do, you can probably still appreciate that personalization is essential to a modern customer experience. Generic experiences fall flat when compared to experiences like those.

Salesforce’s “State of the Connected Consumer” report found that 59% of consumers and business buyers believe that tailored experiences based on their past interactions are very important, while 84% of them say that being treated like a person, not a number, is very important. It also found that customers are 4.7x more likely to view real-time messaging as important versus unimportant.

And marketers have recognized that their customers demand personalization. The vast majority (98%) of marketers believe that personalization helps advance customer relationships, while 88% believe that their prospects or customers expect a personalized experience.

In other words, personalization is important to both customers and marketers today. At Evergage, we believe that it will only become more important in the future — so it’s something to invest in today.

Final Thoughts

Whether personalization is obvious, as in the case of Spotify and Netflix, or more subtle — as in some of the examples I provided above — it provides a better experience for the customer. It surfaces important information and makes them feel valued.

Read more: Adding a Touch of Personalization