The Role of Personalization in Boosting Customer Engagement

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Table of contents:

1. Introduction
2. The connection between personalization and customer engagement
3. How to take advantage of personalization?

1. Have a preparational process 
2. Use data gathering software!
3. Segment your audience!
4. Use AI to analyze big data!
5. Make decisions based on the data!
6. Evaluate the results and optimize
7. Dangers of overusing personalization

1. Privacy issues
2. The feeling of being observed
3. Conclusion

1. Introduction

In 2023, 73% of all businesses had a website, according to a statistic. This number is likely even higher today. Establishing an online presence now is not only an opportunity, rather than a standard. 

In the online space, more data is available for later analysis than in the physical world. A website can track where visitors click, how quickly they can navigate themselves to the end of the shopping procedure, or when they get frustrated. If you, or your AI tool, correctly analyse the meaning of these movements from your big data, you can not only fix your website’s mistakes, but you can also understand their individual preferences. 

In this article, we will discuss the basics of personalization, the connection between personalization and customer engagement, and how to take advantage of this superpower!

2. The connection between personalization and customer engagement

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Many researchers have pointed out a correlation between personalization and customer engagement. 

The latest news is more extreme than ever – according to research, 76% of all buyers are frustrated if they don’t meet with personalized interaction on a website. It is a well-known fact that the number of repeat buyers affects the long-term profitability of a business the most in a positive way. Well, online personalization can even enhance this behavior. A study shows that 60% of buyers are more likely to think of a possible repurchase after going through a successful personalization process.

Let us tell you one more benefit: research points out that personalization can increase your conversion funnels efficiency by up to 20%! Thus you can not only generate more revenue, and sell more products, but convert your buyers into happy, satisfied, and loyal customers. 

If all businesses acknowledge these opportunities, why doesn’t everybody introduce personalization on their website? It’s because you need to strictly follow a path, which requires money, dedication, and professionalism. 

3. How to take advantage of personalization?

It is really astonishing when Amazon recommends those products to you that you are eager to buy every time. It seems like pure luck, but if you look more precisely, you will recognise the hard work they needed to put into this system to work that smoothly. 

The best part of personalization is that it has several forms: you can recommend different products, services, or content to different groups of people, use different messages to convince buyers, or even make different websites for each group of people, with different domain names in synergy with the buyers’ preferences.

In this part of the article, we will discuss its working mechanism. 

1. Have a preparational process 

Personalization is often a desired part of customer-buyer coordination. A statistic points out that the implementation of personalization has cumulative effects: it will increase the chances that buyers purchase from your site, increase the probability of repurchases, and increase the percentage of recommendations.

However, its power all depends on the specific circumstances. In some industries it is forbidden to gather customer information, and it is not necessary in other industries. For example, a pharmaceutical website can’t gather too much information from its patients due to GDPR compliance. 

As this example shows, you must be aware of your industry’s specific relations to personalization, and only go further if you are assured about its legality, and relevance. 

2. Use data gathering software!

There is no online personalization without the use of a data analytics tool. These tools track every bit of the visitors’ movement on your site. Of course, without the sensitive data. For example, you cannot track passwords or personally identifiable information such as email addresses.

There are many data-gathering software programs on the market, with different heatmap options and maximum stored information. Choose the one that corresponds with your site’s potential popularity, your users’ potential GDPR concerns, and that contains the desired analytics options.

3. Segment your audience!

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Now, it would be nice if we can send and display different messages to every buyer that uses our website. However, we are still not here. What we can do is create segments and highlight different messages between the segments.

This solution is not only cost-effective, but your website speed also remains at a stable level. You must segment based on the most crucial characteristics:

• How often does each customer buy from you?
• Are they one-time or return buyers?
• What categories are they interested in?
• What purchase stage are they in (awareness, consideration, or decision)?

It is best if you can make 3-5 categories that are all different from each other. 

4. Use AI to analyze big data!

Data analytics tools help you to evaluate your results. The problem is: it is a really time-consuming task. On top of that, humans can make errors. And if we just miss one crucial connection, we may turn in the wrong direction. To maximize the opportunity of your fresh data, you can use an AI integration. Be aware not to send sensitive data, as some high-tech companies have faced long-lasting trials because of giving sensitive information to AI assistants.

For example, the Manus AI tool won’t struggle with evaluating uncountable long Excel sheets of data, even if it needs to check information on the internet, or creating more files meanwhile. Unfortunately, the program is still in beta testing.

5. Make decisions based on the data!

After your raw data is converted into an informative document, you can start acting! Create different recommendations, messages, or interfaces based on the segments’ wishes. It requires programming skills, but even a content management tool can handle these queries. 

6. Evaluate the results and optimize

After you make your personalization public, you need to continuously track your results. If one segment reacted negatively to your personalized content, optimize it for better results. 

You can even ask your users about their satisfaction, and let them know how important their comments are. Strive them for complex replies, even for the negative aspects. This will help you to create more effective personalized content. 

4. Dangers of overusing personalization

Of course, there can be downsides to overusing personalization. In this part of the article, we will discuss why you never step beyond the borders.

1. Privacy issues

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In a world where 81% of customers are concerned about how businesses store and use their data, privacy issues must be a focus point.

In March 2018, a deep confession shocked the market. Christopher Wylie, an Ex-Cambridge Analytica employee, spoke about how their company used private, sensitive data to convince citizens to vote, influencing many national votings. Allegations claimed that the UK’s European Union exit, and Trump’s 2016’s winning election were both the result of Cambridge Analytica targeted campaigns.

At that time, only one question remained: from whom did they get the data? The answer shocked everyone: Facebook delivered the data in complete secrecy. After the report of the incident, the number of activities in Facebook decreased by 20%, and the #DeleteFacebook movement conquered the internet.

If you do not handle your users’ personal data as you promised, and you only use their willingness to make your situation better, your fate is decided. And we haven’t mentioned yet how strictly the GDPR acts (inside the EU), and the California Consumer Privacy Act (inside the US), punishes the misuse of sensitive data.

2. The feeling of being observed

Consumers don’t want to be experimental rabbits. Of course, they want to get access to the new updates, and they want to be appreciated, but not at the price of sharing every bit of their movements with the public.

Always understand your visitors, and their general opinion about giving out their data. Be aware to use cookies, and that you need to warn the users about the data gathering, before you start to observe their movements. 

5. Conclusion

In this article, we discussed the process of using personalization of a website and what advantages it will bring to your business. On the other hand, we analyzed the counterparts of using too much personalization. Personalization is a two-way weapon: a well-built personalization strategy will lead your business to better success, but one mistake can also erase your business from the online atmosphere.