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The Psychology of Ecommerce Hyper-personalisation

The Psychology of Ecommerce Hyper-personalisation

Psychology tells us that people prefer and often crave a hyper-personalised experience. By “hyper-personalised experience,” we mean an interaction or engagement via a piece of software, with unique product selections or relevant content, with a single person that leaves them feeling like their interests and preferences matter.

Hyper-personalisation is like someone giving you a fitted baseball cap with your favourite team’s logo on the front and your initials stitched in on the side. In contrast, non-personalisation is like someone giving you a one-size-fits-all baseball cap with some team you hate’s logo on the front. No initials. No consideration for your preferences whatsoever. It’s like the person who gave it to you bought a 48-pack of baseball caps on Amazon and you were just one of the many “lucky” recipients.

Fortunately, modern technology, especially AI machine learning, allows us to take advantage of personalisation like never before. For example, as marketers, we’re now able to hyper-personalise our home pages, landing pages, forms, calls-to-action (CTAs), and most importantly emails so the content and messaging we display is always tailored to the person engaging with it at a time most appropriate to them – send time optimisation

Why Do Consumers Prefer Hyper-personalisation?

According to a study from the University of Texas, we can attribute our preference for hyper-personalised experiences to two key factors: desire for control and information overload. Let’s tackle the “desire for control” first.

So, we know that a hyper-personalised experience, by its very nature, is in some way different from the status quo. You’re not just getting what everyone else is getting. Instead, you’re getting something tailored to you. And because of that, it makes you feel more in control.

Truth be told, you aren’t making a choice when, for example, you view personalised content on a site page. But when you know you’re getting something that’s tailored to your interests, you still perceive having some level of control over what you’re engaging with, after all, it was only your historic choices and actions, captured by a website (or SaaS), that led the retailer to understand your preferences.

Even if this sense of control is an illusion, it’s still powerful and can have a positive effect on your psyche. According to Psychology Today, people who feel an internal sense of control, i.e. they believe that they are in control of their life outcomes, as opposed to believing external forces are responsible — tend to be healthier physiologically and more successful.

Now, let’s turn to the second factor mentioned in the University of Texas study: information overload.

According to the study, another reason we prefer hyper-personalised experiences is because they help reduce information overload. Or, more precisely, hyper-personalisation can help reduce our perception of information overload.

For example, when you know that the content being displayed in an email is tailored to you, it provides a more manageable framework for engagement. With hyper-personalisation, you aren’t presented with thousands of resources to sort through and consume. Instead, you are presented with exactly the information you were looking for. Hence, you never feel “overloaded” with information.

Psychology explains why relevance is key

Of course, the notion that hyper-personalisation can satisfy our collective desire for control, as well as our desire to reduce information overload, only applies when we know that personalisation is happening.

Think about it: If there are no overt signals of hyper-personalisation (like seeing the last item you spent time looking at on a site suddenly is the lead item in an email), how can you even tell that something has been personalised?

In those cases — when someone isn’t aware that they’re engaging with personalised content — feelings of control and reduced information overload don’t come into play. And yet, research (including this study) confirms that people prefer personalisation, even if they aren’t aware they’re experiencing it.

So why, psychology speaking, do we still like personalised content better in these cases? Simple: It’s more relevant. And, as human beings, we are naturally more inclined to engage with information that we find relevant and interesting.

Not satisfied with that answer? Us neither. Let’s dive a little deeper.

You see, it all has to do with your brain’s reticular activating system or RAS.

Your RAS is the gateway that information passes through to reach your brain, and it filters that information so you know what you should pay attention to. Ever heard of “selective attention” or “selective hearing”? This ability to focus on one bit of information, while simultaneously ignoring other information, is controlled by your RAS.

As Dr Rachna Jain once noted in a Social Media Examiner article about psychological influence, “Most commonly, the RAS is associated with the concept of selective attention, which means that we naturally orient to information or ideas that we are invested in.”

The cocktail party effect.

One of the most common examples of your RAS in action is known as the “cocktail party effect.” Here’s how it works:

If you’re at a party with dozens of people chatting around you, you’ll likely find that you can easily ignore or tune out of those conversations. They’re just background noise. But, as soon as someone says something that is of particular interest to you, you will magically tune into that specific conversation. The important information will, thanks to your RAS, rise above the noise.

Want to know one of, if not “the” biggest “cocktail party effect” triggers around? We’ll explore that next.

The Sweetest Sound

“Remember that a person’s name is, to that person, the sweetest and most important sound in any language.” – Dale Carnegie, How to Win Friends and Influence People

Carnegie’s point here was that remembering a person’s name — and using it whenever appropriate — is key to winning that person over to your way of thinking. He was so keen on this notion that he came up with his system for remembering names effectively.

Clearly, Carnegie understood that something special occurs when people hear their name. And, as we alluded to in the previous section, the “cocktail party effect” also backs up this idea: Your name, as it turns out, is one of the easiest sounds for your RAS to hone in on.

While you can easily ignore that stranger in the background complaining about their job or talking about their kitchen renovations, as soon as they mention your name, your ears will inevitably perk up.

So, what exactly is going on here? The scientific answer is:

Something. Something is going on. And yes, there is scientific research that backs up this bold claim.

According to a study published in the peer-reviewed journal Brain Research, when people hear their first name (vs. hearing other first names), there is a unique reaction in the brain.

More specifically, hearing your name — as opposed to other names — triggers greater brain activation, particularly in the middle frontal cortex (which is associated with social behaviour), the middle and superior temporal cortex (which are associated with long-term memory and auditory processing, respectively), as well as the cuneus (which is associated with visual processing).

Based on this research, it’s clear that hearing your name causes something special to happen in your brain. But how can you use this information practically to improve your marketing?

Easy! Start using dynamic tags in your lead nurturing emails so you can address recipients by name, and within varying degrees of time for each human being product names apply likewise. You could also present customers with the specific products they have shown interest in most recently, especially if buying signals and buying patterns receptors in your hyper-personalisation software have been triggered.

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