Is individualization the next personalization?

Did you know the word ‘jargon’ comes from an Old French word meaning ‘gibberish’ – equated to the seemingly mindless chatter of birds?

It has similarly frustrating connotations today. Which is one of the reasons why we revise our jargon-busting guide to martech lingo each year, to try to illuminate some of the least obvious phrases in marketing tech.

So when we bring up the topic of individualization, you understand that it’s not done to add more mindless jargon into the world. It’s because we feel the idea has real potential in how we treat customers as people.

With that in mind, let's carve out some space in our ever-expanding marketing lexicon for a new AI-related term in customer experience, because 'individualization' is being tipped in some quarters as a big deal.

So what exactly is individualization? How does it differ from personalization? And why should it matter to your organization? 

What is individualization? All for one, not one for all

Marketing can often center around personas – groups of people who look broadly like the types of people you’re selling to. Organizations use these ideal customer personas to personalize their offerings to people with the same needs.

The fact that personalization works won’t surprise you. A whopping 89% of business leaders recently said that personalization is key to their organization's success over the next three years. And it's what people expect – 76% of consumers say they're frustrated when brands don't personalize their products and services. 

So, we're all agreed that personalization is good. But that doesn't mean it can't be better.

In fact, in many ways, treating people as groups of personas simply doesn't cut it anymore. If you want to win over today's consumers – if you want to differentiate your customer experiences – your offerings need to be more tailored towards individual needs and desires, not broad ones.

That’s what individualization is in a nutshell: an extension of personalization that’s capable of handling each customer… well, individually.

Take Starbucks, for instance, who are able to recommend drinks to its app users using very specific information about that individual – their order history, their location at any given time, and even what the weather is like at that location.

Arsenal football club in the UK don’t just send emails promoting their new home jersey; they send you a picture of the jersey with your name on the back to help you visualize yourself wearing that very jersey.

It’s not B2C (business to consumer); it’s not B2B (business to business); it’s B2P (business to person).

AI is the key to individualization

Earlier this year, cloud communications company Twilio heralded a new 'era of individualization' in its annual State of the Customer Engagement Report. By embracing AI, Twilio says, brands can now begin to provide unique experiences for each and every customer – true personalization. And we couldn't agree more. 

Individualization is different to the 'one-to-many' or 'one-to-some' personalization that many brands may be familiar with. In other words, the type of marketing where most customers or would-be customers receive very similar brand experiences, but with a few 'personalized' tweaks such as using their name in automated emails. 

Individualization goes several steps further. And the reason we can go into this extra level of depth now is because of what AI allows us to do – in customer segmentation, in data processing, and in the very nature of how people interact with a brand online.

So let's paint a picture of what individualization looks like at its best.

Individualization in action 

Amy isn’t a technical person. She can hold her own in conversation, but her career in HR requires more people skills than tech ones. So when she looks for a new internet provider for her home, she does so with a certain amount of apprehension.

She needs a fast and reliable connection, but she doesn’t think she needs the very best of the best. She does what anyone would do: she heads online for answers, and is soon confronted with more technical jargon than she knows what to do with.

Does she need ADSL? What’s an access port? Can she even get fiber at her address? And what is 10Mbps upload speed – is that good?

Enough. Amy goes to one of her telco providers hoping for clarification and is greeted by a digital human who’s available immediately to help. The AI understands her frustration (it shows this empathy in its voice and expressions) but reassures Amy that she’s in the right place.

Instead of throwing information at Amy, the digital human simply starts asking questions. What’s her address, how many devices does she use, is she a gamer, avid streamer, and does she work from home?

Before long, the digital human is able to suggest a plan just for Amy. She can indeed get a fast fiber connection, but will need a mesh network because of the size of her home. She doesn’t need the most expensive plan, but seeing as she’s on Zoom calls most of the day, the next plan down will be ideal.  And that plan actually comes with a Netflix subscription, so she can save a little money there.

Amy’s self-doubt apprehension begins to turn to confidence – confidence that she’s purchasing the right product for her exact situation.

Does that sound too futuristic? It’s the experience we built with Deutsche Telekom (parent company of T-Mobile) in Europe. Their UneeQ digital human, Selena, could guide customers to the home internet plan to suit their needs.

And the results? 5.6x conversion rates, -9% cart abandonment rate, and an ability to upsell and cross-sell products as needed. That’s the power of individualization enabled by AI.

Great personalization converts

Building one-to-one connections 

What makes individualization a potential game-changer? We think a big part of its appeal is that individualized experiences incorporate some of the best bits of interacting with brands in person. 

Whether it's an assistant in a shoe store who helps you find your style, or a travel agent who builds your ideal vacation package from scratch, the most memorable customer experiences often involve one-on-one conversations with someone who really listens to your needs. They talk with you, rather than at you. 

And with the rise of LLMs, ChatGPT and RAG, people are now used to having real-time, personalized conversations in a human-like way online. These technologies are shaping what people expect from their digital interactions, and businesses that are slow to deliver these experiences could be leaving a lot of brand equity on the table. 

The good news is that brands can start offering individualization today through generative AI. Indeed, some already are.

At Wayfair, for example, the home goods company recognizes that choosing interior design is a very personal experience for most people. It's often tricky for customers to know or articulate what they want, so the brand has introduced Decorify, a Gen-AI powered tool that lets users upload photos of their home and see how their rooms look with virtual fixtures and fittings from its catalog. 

"You can see your living room in different styles," said Fiona Tan, CIO of Wayfair, at a recent panel also featuring our CEO Danny Tomsett. 

"It's a very high-converting capability. Maybe you find out you don't like glam, perhaps you like mid-century modern … We can now generate that much more personalized content on the fly." 

This is where we believe the future of customer experiences lie – delivering highly personalized experiences to customers in real-time across all channels, while still placing empathy, conversation and one-to-one interactions at the heart of the process.