Are we talking about the same? No.
Consumer behavior today is omnichannel, that is, interacting in the physical and digital world. Today a consumer can see an advertisement for a certain product on Google, review its features on Amazon and end up buying it in a department store. The amount of data generated by this consumer journey is what makes it possible to gain more and more knowledge of consumers and partly enables deeper segmentation and hyper-personalization.
The current behavior of consumers requires that they are no longer pigeonholed into simple groups of people with common characteristics. Starting from a traditional segmentation using demographics such as gender, age and geography to a micro-segmentation that includes other data such as particular interests, purchasing habits and search behavior. Microsegmentation talks about detailed segments of a group of consumers with similar characteristics.
Meanwhile, hyper personalization is reaching the maximum degree of persona awareness using technology like AI, ML, and real-time data to deliver relevant content based on what the consumer wants and is thinking. Managing to deliver hyper-personalized messages is a big challenge for brands that want to reach this level of intimacy with consumers.
“Hyper personalization depends on the capabilities that the organization has to collect and transform consumer data into personalized experiences, therefore, when a hyper personalization plan is put in place, it serves two functions: delivering personalized messages and increasing the number of people. receive these messages” (Toward customer hyper-personalization experience — A data-driven approach. JM Valdez Mendia)
Micro-segmentation and hyper-personalization are often used together as both aim to deliver a personalized brand experience. While micro-segmentation groups consumers into clusters with similarities, hyper-personalization is focused on the individual. Using micro-segmentation, the brand divides a customer base into groups based on attributes such as interests, lifecycle, attitudes, purchasing behavior, search history, and buyer stage among others. With the above, unified content can be delivered to a group of consumers. Hyper personalization goes beyond micro-segmentation, since through data and advanced analytics, experiences designed specifically for a person can be delivered within micro-segments. Here lies the most important and fundamental difference. Micro-segmentation talks about micro groups of consumers and hyper-personalization talks about the individual.
Hyper personalization and micro-segmentation are part of the digital transformation. Its use can be in several ways, loyalty being one of the most powerful. Achieving hyper personalization and micro-segmentation creates a greater emotional attachment of customers with brands by feeling recognized and treated in a special way.