Technology has brought great advancements for customization and personalization. This has helped businesses of all sizes whether service-based or product.
We experience customization on a daily basis. Whether that’s the toppings you like to get on your frozen yogurt or your choice of protein or beans on your chipotle bowl this can even be expanded to choosing whether you pay monthly or yearly for a plan you sign up for. Customization has proven very useful for not only businesses, but also the users who choose a customize. As humans, we like to leave our fingerprints on things and we truly enjoy when something feels tailor-made just for us
Personalization on the other hand has been spurred by the advancements in algorithms. The intelligence of big data collection has allowed algorithms to start personalizing our experiences. We experience this daily as well, whether the algorithm chooses what you listen to next on Spotify or what you watch next on Netflix, it does feel nice to have something curated to your specific likes and dislikes. Once again, we as humans love that feeling of something being slightly more tailored to who we are as individuals.
Now, as you might have noticed customization is based on the user initiating the changes while personalization is done for the user. As subtle as this may be, this is a very big big difference for not only the user but the business as well.
Let’s imagine you’re ordering a drink at Starbucks. Your membership there may start suggesting past drinks you’ve ordered or common combinations you do with your drink; however, today you’re just not in the mood for it. This could lead to actual frustration for the user because the suggestion is not tasteful. It reveals the very robotic nature of algorithms because it’s having no account for your feelings or even your mood that day reduced down to a predictive algorithm that’s trying to tell you what you want next and sell humans never want to be sold to we like to buy and make our own decisions. After some minor frustration, the user might then start to try to customize her drink going step-by-step tail. It’s just the way they like. Yes there is additional friction here, but the benefits outweigh the time spent because the users get a more accurate solution to what they’re wanting.
Personal vs Personalization
Now, when you compare the two, we can see that personalized options are quite efficient while customization takes a little more effort. Personalized is efficient because it is predicting, therefore putting it in a future tense. If I could predict what you wanted next, I could make our interaction a lot quicker because I could already preemptively prepare your order. This is how Amazon has such great efficiencies with the warehouses by region Amazon predicts which products most likely will need to be shipped out so they can do their one day shipping. On the other hand customization is very nice because of its accuracy to the individual and their humanity . Through the extra work of customization, the user is able to input their desires based on how they’re feeling in that moment. Remind me when I order my favorite burger at In-N-Out. I prefer to do a whole grilled onion, no cheese, double meat with extra pickle. However, sometimes I do enjoy doing cheese on it. It depends on my mood, the day and how it’s going. I’ll even be more inclined to get cheese if I know I worked out that morning. Although in and out could potentially template my order saving me time when ordering my human nature has far too many variables that are dependent on the flows of the daily life of Reilly.
My point is that customization is far more personal than personalization. This is simply due to the fact that customization is done by the user directly, so they can account for all of these emotions and variables. We have seen some brands incorporate a personal approach to service. These efforts are not very scalable and take extra time and care to pull off. A good example is how Ritz-Carlton will take note of each guest by how they prefer their room set up. They do not force the guest to fill out a long customization form of all these details. Instead, the Ritz Carlton staff have been trained to take note of which side of the bed the guest may sleep on, where they put their toothbrush, Any allergies or perhaps food they like to order. These personal details are taken into account on each guest account so if the guest is returned, they are able to Personally customize the room without the guest saying anything.
What I like about this is that it is focused on the human behavior of each individual. They observe, Take notes, Then create a brand experience that is personal to that individual.
Yes, it is still predictive of what the guest may prefer however, it is based on information gathered through observation of personal preference.
To me a good comparison is a personalized email that simply drops the user’s first name into the “hello (enter first name)”—This doesn’t feel personal. You simply feel like another number to them that the algorithm replaces with your name from the database that they have. Compare this to an email you receive that has your name but also writes to you personally about perhaps a story that relates to your business or what may be going on in your life. It’s not personalized, It’s personal.
Person(AI)l
As technology has made great advancements in these fields, I believe AI is going to further the personal side of this. Currently the large language models work through predictive algorithms. The model uses math and all the data at its fingertips to construct sentences and answers that are most likely to be true and accurate. This works for facts and figures, but not for humans. You see, facts and figures don’t have emotions. They don’t have good days and bad days. Humans do. Humans are dynamic. Humans have opinions and emotions.
I do believe by the quick pace of artificial intelligence it will get to a point where it can predictively address emotion. Especially as its intelligence garners more information about us as individuals. Even Apple’s recent announcement of Apple Intelligence is emphasizing the focus on our individual phones. Your phone can tell Them a lot about how you’re feeling or what’s going on in your life that day. Perhaps you’re sad because you got a text about a sick family member or your search revealed that you are looking for a new job. The intelligence will also know of Highpoint in your life based on the photos you take the moment you share the destinations you visit or even the positive increase in the health of your body.
Next to social media and Google we’ve gotten used to big data which now as you’ve been used by the large language models to do predictive writing and art. The next phase is going to be hyperfocus and localization to the individual and their life. This is the application. This is personal.
As I write this, I see this advancement impacting four major economic areas of our lives: advertising, retail, payments, and services.
I will now briefly outline each of these to share my perspective.
Advertising:
Advertising is mainly used to Acquire new customers. This is why when your phone hears you speak a brand‘s name or do a simple search, you will then be bombarded with predictive ads that think you were wanting to shop that specific brand. This could be true, and most likely has a high probability, But how many times has this happened to you where you are being sold by a company that you’re a customer of?
For me personally, this leaves a bad taste in my mouth. This reminds me that I’m just another number to them and my sale was the value.
An example of this is when you go to make your car payment or a phone bill payment on the brand website. Their website of course leaves a cookie on your browser that is now tracking you. You will then be greeted with ads from this brand with upcoming sales for new customers and all the above. However, the brand should’ve known that you were already a customer and their advertising should adapt accordingly. The advertising should be focused on retention and being personal to you as a customer. Based on them, knowing that you just paid your bill, the advertising could be aware of how that might make you feel then portray images and messaging that reinforces your positive attitude towards the brand and reaffirms your purchase decision.
Retail:
Retail seems to be in the same pickle as restaurants and fast food chains when it comes to personally addressing their customers. Technology has immediately made them focus on the efficiencies that Personalization brings to the table. Rightfully so they follow this path which has eroded the customers personal connection to the brand. Now, when I visit Starbucks, it’s not handwritten names on the cups, but printed out labels slapped on the cups left on the counter for someone to pick up. There’s no chit chat with the barista or correction of someone’s spelled name. That’s all far too inefficient to be allowed into the system of today’s personalization.
Retail seems to be doing the same thing with their apps. Target simply tells me to reorder things that I’ve ordered in the past. Now, even when I do a target pick-up order, it will prompt me to order a Starbucks at the same time so they can bring it to my car. The wheels of the Efficient machine continue to turn and I’m just another cog.
Shopping is an experience, But I’ll be the first to admit that sometimes I treat it like a mission. I’ll look up the aisle that the products on dash into the store and leave through the self check out as quickly as I came. Reducing the brand to nothing more than a convenience store. What’s fascinating to me is that I will do this in Albertsons to grab groceries quickly, however, I won’t do this in Trader Joe’s. There is nothing efficient about Trader Joe’s. It’s an experience where I enjoy every minute of it as I peruse the aisles looking at new and interesting products. There’s no self checkout, and the employees will walk me to my destination if I have any questions and even chit chat with me. The great theme of this retail experience makes users fall in love with the brand. Even though it may not be personalized, Trader Joe’s is the epitome of personal.
What’s interesting about this, Is that Trader Joe’s has a different approach to personal. Yes, it is customized to the region and what people order and the time of year. The customization seems to ebb and flow as products come and go. Being a user of Trader Joe’s, I’m subscribing to the distinct experience that they map out. It is special and different, which makes me, the shopper, Feel special. And when it comes down to it, the point of making something personal is to make that person feel special.
If you were to contrast this to the Albertsons shopping experience, that is extremely efficient but not personal. We can plainly see how Albertsons will not make someone feel special.
I see AI impacting retail with more efficiencies due to the predictability of its intelligence. This technology will mislead many brands to focus on efficiency rather than using AI to further their understanding of their shopping experience for their shoppers. The brands that will succeed will use the efficiencies from technology and AI to create more personal moments. This could be a more interesting shopping experience, less products and more curation, or even a system to help employees remember the names and preferences of customers.
Payments:
When it comes to payments, I see companies being able to provide more personal payment options based on a person’s preferences. We have seen this with the buy now pay later trend and more credit cards adopting These methods. Technology has made this possible on many fronts, I see they’re being another layer that will be further introduced.
Similar to how credit cards have made credit the universal payment, no matter who or where your shopping is accepted and helps you keep moving. The next evolution, we will be a personal credit that flexes and changes to your personal preferences of how you like to pay or what makes sense for your personal budget. Just as you may be getting notifications now from banks regarding your credit card, that can divide up your payment into multiple payments on larger purchases. This will become much more common, but further up the chain of the transaction.
As you check out, you may be given options to make payments, pay in full, subscribe to the product and save, Or even trade in an existing asset to go towards the purchase. These are all evident in our economy today, but as customization continues, the personal approach must become more in depth because finances are a personal thing.
What we buy says a lot about us and our personalities as individuals. How we pay says A lot about us as well. This will create many opportunities for new solutions as this layer payment is further integrated into our daily lives. The obvious connection here with the Blockchain and the mini technologies that come along with its infrastructure. Currencies will be introduced that make this doable and personal to each of our lives.
This will improve the relationship between financial institutions and the consumer by Further adapting each account to the specific user. Someone who pays their credit card on time or in smaller intervals, but always clears. Their bill is less risky than someone who has missed a few payments or perhaps as always late. The user who makes their payments shouldn’t be treated the same as those who neglect. This means that maybe they receive more cashback rewards or are given more options for payments or even pay a lower interest rate overall. There’s many variables that can be considered, and it can become even more personal based on how technology advances.
Similarly, when you are getting ready to make a purchase, the system will be able to detect your budgeting needs as well as your current situation or maybe even how you’re feeling at the time if you are stressed about money and make suggestions for certain payment options. The intelligence may consult you on if the purchase is necessary or not, if your finances aren’t looking too hot.
Services:
As for service businesses, time is going to be further stripped away from the equation of how pricing works or the service is executed. This will change the business model drastically, but for the benefit of both the business and the buyer.
Similar to value based pricing, this will allow the true value of the service to be the focus and the buyer and provider to be on the same page creating a win-win situation. Hourly billing will be dead. (Yay)
For the services technology will be able to make the services more personal. This will increase the Perceived value of each service based on the individual buyer. This will also look closer at their reasoning for the need of service. This is an additional layer of information that the business can detect patterns and provide even more value for the specific reasoning behind the service. This adapts the service into a more specific solution that addresses a specific segment of the market.
Obviously, this will increase the desired expertise of providers in the service businesses. Benefit the buyer because they will be getting a more accurate solution to their problem. Once again, this is not about being more efficient, but being more effective.
The services will adapt to become programs or product services that address the specific need of the audience. If they are recurring, they’ll become programs and memberships that address the recurring issue or maintain a certain state.
What I really like about this is that it forces the service provider to focus on the relationship with the buyer. By this, I mean that the service provider has to focus on the state of the Buyer to best understand what is most suitable for their situation. This naturally protects the buyer from disservice or even malpractice. As a relationship is considered, the service provider can also be proactive in the next state of the buyer. How are they gonna feel three months from now? When will they come back? Will they be coming back?
This is a classic service business template that can also be applied to hospitality and even Restaurants. Anything with their service must focus on the relationship. This is a brand mindset. These efforts, coincidentally, will review ways that you can make it more personal for them at every step along the Customer journey.
A restaurant, for example, could use technology to specify certain menus for certain types of guests. Perhaps a menu and a specific table for dates. Or another menu and exclusive items for big dinner, parties or celebrations. The restaurant being able to adjust offerings based on the scenario will not only be more adaptable, but more personal as well.
This provides added value to the guest, so they are more likely to return Because they enjoyed it so much. It also allows them to return again for another scenario. They may come for date night, but return to the restaurant for the other experience of a large party. Either way, the AI could perhaps adjust the website or offerings automatically based on what it knows about the buyer.
Hotels can introduce similar adaptable strategies as well. I see this when I take my family to a hotel and the poor business people have to share areas with us. We might be traveling for a dance competition while she’s trying to prepare for a big meeting. It’s not my fault. It’s not her fault. We Just happened to be at the same hotel at the same time. (Sorry)
Our rooms could even share a wall(sorry again) . My kids don’t know that they have to be up early the next day and them jumping on the bed or blasting the TV doesn’t take into consideration.
The hotel can safeguard against this by taking it into consideration and creating personal experiences for each type of Guest. Along with personal preferences of how certain guests like their rooms, technology will be able to detect patterns based on their booking and assign rooms or certain public spaces for their specific scenario. Now this seems much more empathetic and personal.
Ultimately further advancements in artificial intelligence(AI) will allow the system to understand how the guest is feeling. Maybe the hotel system knows you’re running a little late on your road trip and you’re probably gonna be stressed coming into the hotel. It might be able to do early check-in or perhaps give suggestions of a spa treatment to help ease your pain. Could just send a message saying “Don’t worry your room is already ready for you.” This goes beyond just big data but into the personal situation of the buyer.
Most of these could be seen a mile away if you are watching what AI is doing in the progress it’s made in a matter of months. My point isn’t to be a futurist in this writing. My point is the show that technology and intelligence will be able to further empathy.
Personalization is going to seem archaic compared to real customization. That brands will be able to make their experiences more personal for their buyer.
Yes, technology will make things more efficient, but brands must beware that this is only the first step to creating a more effective and valuable offering for their buyer.
The brands that stop at efficiencies will suffer just as we’ve seen with Starbucks. The brands push forward into the aspect that these efficiencies enable will become more effective through their empowered relation.